Note: Pratyusha Katikaneni and Carmen Diaz also contributed to this post. They are both research assistants at the Engelberg Center for Health Care Reform, The Brookings Institution.
January 23 update comparing this analysis to one by Scott Heiser, Carrie Colla, and Elliott Fisher: Yesterday, Health Affairs Blog published two analyses of Medicare ACO results, one by Scott Heiser and colleagues and one by us (below). These analyses should be viewed as complementary.
In their post, Heiser and colleagues note a greater likelihood of early financial success (i.e., qualifying for shared savings) in relatively high-cost areas of the country. They reach this conclusion by linking each ACO to their hospital referral region (HRR) and finding a significant relationship with early shared savings. They conclude that ACOs in higher cost regions are more likely to begin the program with a higher benchmark relative to costs, making it easier to attain shared savings.
Our analysis focuses on the specific benchmark for each ACO (not the regional cost) and also concludes that there is a statistically significant correlation between ACOs with higher financial benchmarks and their total savings. However, we note that the beginning financial benchmark explains less than 10 percent of the variation in early financial performance, and note that there are many successful ACOs in lower-cost areas as well.
The results of the two analyses are not contradictory, but rather reflect that while historical spending matters in early success, many other factors matter as well.
Original post: On December 1, CMS released a Notice of Proposed Rulemaking (NPRM) for the Medicare Shared Savings Program (MSSP), which requests feedback for changes CMS is considering for the Medicare accountable care organization (ACO) programs in 2016 and beyond. The proposal suggests significant potential alterations to the program, many of which we recently reviewed, that would address major issues that ACOs and others have raised: uncertainty and inexperience at transitioning to increasing levels of risk, lack of timely and accurate data, changes in attributed patient populations from year-to-year, and financial benchmarks that fail to account for regional variations and continue to reward high ACO performance over time. Read the rest of this entry »