Health Affairs

The Medicare Shared Savings Program, created under the Affordable Care Act, provides bonus payments to participating accountable care organizations (ACOs) that are successful in both lowering health costs in Medicare Parts A and B while meeting specified quality measures. The authors of an October 3 Health Affairs Web First study analyzed the effect of the program on health and costs outcomes in patients with diabetes—the patient population most likely to show benefits and savings.

David Eddy and Roshan Shah used the Archimedes model to create a representative Medicare population and simulate the quality-improvement measures specified by the Centers for Medicare and Medicaid Services (CMS). They found that a ten-percentage-point improvement in performance on the measures resulted in Medicare cost savings of only 1.22 percent or less. Eddy is the founder and chief medical officer emeritus at Archimedes and Shah is an associate scientist there.

Eddy and Shah note that CMS has projected that in the first three years of the Shared Savings Program, ACOs will receive estimated median shared savings of $800 million, spread among all participating organizations. “The savings needed to generate these payments will have to come from activities other than improvements in the clinical quality measures,” they conclude. “CMS will need to be very careful in setting the threshold and benchmark levels because they could profoundly affect the outcomes of the Shared Savings Program. Over time, CMS should consider an incentive based on the overall effect on health outcomes, not just on individual performance measures.”

This entry was posted on Friday, October 5th, 2012 at 9:41 am and is filed under All Categories, Medicare, Policy, Quality, Spending. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.