Medicare shared savings programs: Higher cost accountable care organizations are more likely to achieve savings

ABSTRACT

In the United States, Medicare’s flagship Accountable Care Organization (ACO) program, the Medicare Shared Savings Program (MSSP), is under close scrutiny to improve healthcare quality and decrease costs. First-year measures, released in November 2014, reveal a wide range of financial and quality performance across MSSP participants. In this observational study, we used 2013 results for 220 participating ACOs to assess key characteristics associated with generating savings. ACOs with higher baseline expenditures were significantly more likely to generate savings than lower cost ACOs. Average quality scores for ACOs that successfully reported on quality were not different between organizations that did and did not generate savings. These findings suggest ACOs that had lower utilization prior to program enrollment are less likely to be rewarded in the current program. This has important policy implications for the MSSP's ability to attract and retain efficient ACOs and incent efforts to reduce waste and improve quality.

KEYWORDS:

• Medicare accountable care organizations
• cost of healthcare
• financing healthcare
• health reform
• healthcare quality

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Stephanie Berkson is Vice President, Business Planning and Development, at UW Health.

Sarah Davis is Clinical Associate Professor of Law and Associated Director of the Center for Patient Partnerships.

Zaher Karp is a Healthcare Analytics Specialist at Healthfinch.

Jonathan Jaffery is Senior Vice President, Chief Population Health Officer, UW Health President, UW Health ACO.

Grace Flood is Medical Director of Clinical Analytics and Reporting at UW Health.

Nancy Pandhi is an Assistant Professor of Family Medicine and Community Health and Co-directs the Primary Care Academics Transforming Healthcare (PATH) collaborative.

Additional information

Funding

This work was supported by National Center for Advancing Translational Sciences: [Grant Number UL1TR000427].