The University of Michigan Health System reports that a four-year Medicare physician group demonstration project, similar to an accountable care organization, has saved more than $15 million in the cost of care.
Health system officials said the project demonstrates the benefits of accountable care organizations, an initiative now written into the nation's healthcare reform law.
In the fourth year, the health system reportedly saved more than $6.6 million by reducing costs to Medicare through quality improvement strategies and redesigning care, officials said.
"The U-M Faculty Group Practice invested significant time and resources in this project because it provided the opportunity to develop and test potential interventions that could improve clinical outcomes and reduce costs for patients with chronic disease," said David Spahlinger, MD, senior associate dean for clinical affairs.
"Our investments have enabled better coordination of care and demonstrated to the nation that ACOs are worth pursuing."Caroline Blaum, MD, a professor of internal medicine and geriatrics, said the project is the only proven ACO. "By virtue of our success, U-M already has set up an ACO," she said.
Blaum said U-M's demonstration shows there are plenty of opportunities to squeeze costs out of the system while improving quality of care. "Focusing on how patients transition between care settings and proactively reaching out to ensure they understand the information provided and the next steps can make a substantial impact," she said.
U-M achieved both of the project's goals, according to officials. The goals were to provide the highest quality care and reduce healthcare spending growth for all traditional Medicare patients, including those with costly chronic illnesses. Of the 10 large physician groups participating in the project, U-M and the Marshfield Clinic in Wisconsin were the only two to save money each year of the project, they said.
U-M's performance was better than the CMS targets for 30 of the 32 quality measures tracked in the fourth year of the project. The quality measures focused on diabetes, congestive heart failure, coronary artery disease, hypertension and breast and colorectal cancer screenings, officials said.
This is the fourth year in a row that U-M has achieved both sizable savings and high scores on healthcare quality benchmarks as part of the project. One more year of data remains to be collected and analyzed, officials said.