Pioneer ACOs Reduce Spending by $385 Million in 2 Years

The Pioneer ACO Model successfully reported smaller increases in total Medicare expenditures and reductions in health service utilization, for savings of approximately $385 million during the first 2 years compared with general Medicare fee-for-service, according to a study published in JAMA.

In year 1, the Pioneer ACOs reduced spending by almost $280 million and by approximately $105 million in the second year. Beneficiaries aligned with the Pioneer ACOs reported higher mean scores for timely care and for clinician communication compared with other Medicare beneficiaries, the investigators found.

“This is a crucial milestone in our efforts to build a healthcare system that delivers better care, spends our healthcare dollars more wisely, and results in healthier people,” HHS Secretary Sylvia M. Burwell, said in a statement. “The Affordable Care Act gave us powerful new tools to test better ways to improve patient care and keep communities healthier. The Pioneer ACO Model has demonstrated that patients can get high quality and coordinated care at the right time, and we can generate savings for Medicare and the healthcare system at large.”

The authors attributed a large portion of the smaller increase in spending to decreases in inpatient utilization among ACO-aligned beneficiaries. Physician services, such as procedures, imaging procedures, and tests, were associated with smaller increases for ACOs in both years.

The researchers found significant differences in hospital discharge follow-up visits within 7 days. For beneficiaries aligned with ACOs, these follow-ups increased from 11.3 visits per 1000 discharges in 2012 to 14.8 visits per 1000 discharges in 2013.

“This success demonstrates that CMS can design and test innovative payment and service delivery models that produce better outcomes for the Medicare program and beneficiaries,” Patrick Conway, MD, the acting principal deputy administrator of CMS, said. “This gives CMS greater confidence in scaling elements of the model to benefit people across the nation, and we are working to determine the best strategies for embedding the lessons we have already learned from the Pioneer Model into permanent Medicare programs and our nation’s health system.”