31 Aug ACOs Reduce Spending by Nearly $1 Billion

One of the intended effects of the Patient Protection and Affordable Care Act, also known as Obamacare (ACA) was to improve the physician payment landscape and the quality of care provided to patients.  Accountable Care Organizations (ACOs) are one of the mechanisms that was enacted to achieve these goals.  The intention of ACOs has been to foster a more collaborative care environment resulting in better patient care outcomes provided with better cost efficiency.  ACOs stand to gain (or lose) depending on the cost savings they are able to achieve via this model.

On Tuesday, Health and Human Services’ Office of Inspector General (OIG) reported that ACOs participating in the Centers for Medicare and Medicaid Services’ (CMS) shared savings program reduced spending by roughly $1 billion over three years’ time.  Modern Healthcare wrote an excellent summary of the OIG’s report.  Initially it was not known how these new payment methodologies would fare, but based on the evidence put forth in the OIG’s report, ACOs “show promise in reducing spending and improving quality”.  Modern Healthcare cited that 82% of the ACOs improved the quality of care they provided in addition to reducing costs, outperforming fee-for-service providers in 81% of 33 quality measures.

The Trump administration has signaled that they may be moving away from payment methodologies facilitated by the ACA as they have canceled some alternative payment model experiments and stepped back on two bundled-payment programs, intended to provide a single reimbursement for an episode of care, with the greatest value being achieved by providers facilitating quality outcomes efficiently.  Time will tell what new policies are enacted, but it is great to see positive results from a program that has become an integral element of the healthcare delivery fabric.

 

 

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