ACO savings aren’t driven by better care coordination of high-risk patients

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 - J. Michael McWilliams, MD, PhD
J. Michael McWilliams, MD, PhD

The goal of accountable care organizations (ACOs), according to CMS, is to better coordinate care for chronically ill patients, avoiding unnecessary services and preventing errors. For ACOs in the Medicare Shared Savings Program (MSSP), however, those weren’t the reasons they saved money, according to a study published in the Dec. 2017 issue of Health Affairs.

Led by Harvard Medical School health policy professor J. Michael McWilliams, MD, PhD, the study sought to examine the preconceived notions of how ACOs would achieve savings, particularly whether they reduced hospitalizations of patients with chronic conditions like diabetes or cardiovascular disease through care coordination. McWilliams and his coauthors analyzed Medicare claims and enrollment data from a random 20 percent sample of beneficiaries for each year between 2009 and 2014, comparing changes in spending and utilization for MSSP ACO-attributed beneficiaries from before and after the start of ACO contracts with changes from the control group of non-ACO patients.

Participation beginning in 2012 was associated with “significant reductions” in the total Medicare fee-for-service beneficiaries for ACO patients. Hospitalizations for ambulatory care-sensitive conditions, however, didn’t decrease across all categories. While there was a 4.8 percent decline in the proportion of patients hospitalized for chronic obstructive pulmonary disease or asthma, there were increases in two other categories: patients hospitalized for congestive heart failure and cardiovascular disease or diabetes.

For the cohort of the ACOs which entered MSSP in 2013 and 2014, there were no significant differences in the proportion of patients hospitalized for those conditions.

“These findings are consistent with care coordination and management efforts, on average, either having minimal effects on the risk of hospitalization or acting to increase the use of inpatient care by improving access and filling gaps in care for high-needs patients—at least enough to offset any reductions in hospitalizations achieved for these patients through the prevention of complications and exacerbations,” McWilliams and his coauthors wrote.

Care coordination by ACOs may have saved money by curbing excessive use of skilled nursing facilities or diverting high-risk patients to outpatient care rather than emergency rooms, McWilliams and his coauthors wrote, but “such strategies may be more accurately described as utilization management.”

The findings of the study suggested what improves quality is distinct from what lowers spending. While care coordination may have benefitted patients in terms of access and satisfaction with their care, the rewards for ACOs are tied more to savings, not improving quality—which McWilliams and his coauthors concluded may need to change.

“Thus, in assessing ACO performance in the MSSP, a greater focus on patients’ experiences and outcomes that are not based on utilization could better reward physicians’ efforts or better support the implementation of practice models that improve care without placing additional demands on primary care physicians’ time,” they wrote.