October 9, 2014 |

Pioneer ACOs: Will positive effects last?

The Pioneer model of the accountable care organization (ACO) has resulted in overall savings and quality improvements in the health system, according to new information released by the Centers for Medicare & Medicaid Services (CMS), but their effect going forward may be muted as participants have dwindled from an original 32 to the current 19.

ACOs create incentives for healthcare providers to work together across all settings—doctors' offices, hospitals and long-term care facilities, notes CMS [PDF], motivating senior living housing and services providers to pursue partnerships with others along the continuum of care. Those ACOs that attain cost savings and quality goals are able to hold on to some of what they save. But ACOs also face risks because they must make up for spending when it exceeds planned amounts—thus the departures, nine in the first year of the program, and four in the second year.

First-year results released by CMS show that the entities reduced spending growth as much as seven percent, whereas others saw growth speed up as much as five percent. Collectively, CMS says, the ACOs saved Medicare about $147 million, or about $20 per beneficiary, on average. Growth in savings, however, seems to have approximated the local markets where the ACOs are located.

In the second year, the Pioneer ACOs saw healthcare spending slow as much as 5.4 percent, but others saw costs accelerate as much a 5.6 percent. Pioneer ACOs qualified for shared savings payments of $68 million out of a total program savings of $96 million, according to CMS. Mean quality scores increased 19 percent, and performance on 28 of 33 quality measures improved from the first year to the second year of the program.

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