Study Says Medicare’s ACO Test Program Saved Hundreds of Millions of Dollars

A U.S. government test program with doctors and hospitals slowed health care spending in Medicare coverage for the elderly and disabled by hundreds of millions of dollars in 2012 and 2013 but savings were less in the second year, a study released Monday said. The Journal of the American Medical Association (JAMA) study looked at beneficiaries in 32 pioneer Accountable Care Organizations (ACOs), in which hospitals and doctors follow 33 quality and care standards for Medicare fee-for-service patients. In return, they can receive a portion of any health care savings back from the government. The rate of savings was 4 percent in the first year, or a total of $212 million, and less than 1.5 percent, or $105 million in the second year. The savings are based on a comparison against spending on beneficiaries in the traditional Medicare fee-for-service program. The program is part of the national health care reform law, or the Affordable Care Act, which aims to cut national health care spending through a variety of measures including more preventive health services and the extension of insurance to most people. The program’s decline in savings between the first and second year could be due to the organizations grasping “the low-hanging fruit,” Dr. Lawrence Casalino of Weill Cornell Medical College said in a JAMA editorial that accompanied the study. It suggests that either savings will always be smaller in subsequent years or that it will take time for the organizations to develop better processes that will lower costs in future years, Casalino wrote.

Source/more: Reuters

David Wingate is an elder law attorney practicing in Frederick and Montgomery Counties, Maryland. The elder law practice concentrates on wills, powers of attorney, trusts, asset protection and Medicaid.