With new data from the Medicare Pioneer ACOs, accountable care advocates can be cautiously optimistic, although the pessimistic can also find things to latch onto as well.
The participating organizations in Medicare's Pioneer Accountable Care Organization pilot saved $384 million in Medicare spending in the first two years, according to a study by an independent office at the Centers for Medicare & Medicaid Services.
The CMS Office of the Actuary found that the shared-risk Pioneer ACOs saved $279.9 million in 2012 and $104.5 million in 2013--drops in Medicare's $500 billion bucket, though encouraging to a federal government trying to have 50 percent of Medicare payments in alternative contracts by 2018.
"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," said HHS Secretary Sylvia Burwell.
The Pioneer ACO program launched in 2012 with 32 original participants, and 13 have dropped out, including Sharp HealthCare in San Diego, Physician Health Partners in Denver and the Seton Health Alliance in central Texas.
Among those that continued, New York City's Montefiore ACO saved $47 million over two years and earned $27 million in shared savings. Maine's Beacon Health, an Eastern Maine Health System subsidiary, saved $4 million its first year, but lost $6 million in the second. In greater San Francisco, the Brown & Toland Medical Group saved just under $16 million over the two years and shared $8 million of it. In the second year of the program, only 11 Pioneer ACO's qualified for shared savings, earning a piece of $69 million.
Here's how the remaining Pioneers have fared:
The Pioneer model was the first accountable care model launched by CMS, aimed at working with health systems who could take on risk and set a course away from fee-for-service. Pioneer ACOs can share savings with Medicare for meeting quality benchmarks and spending targets for beneficiary populations, but they also share in losses.
Meanwhile, the less risky ACO program, the Medicare Shared Savings Program, has saved Medicare $417 million to date, with 53 ACOs sharing another $300 million. An additional 89 MSSP participants started this year, bringing the total number of MSSP ACOs to 405.
For both the Pioneers and the MSSP participants, however the results turn out, there is a novel exit and/or commercialization strategy that could be a viable consideration: launching a Medicare Advantage plan.
As one voice behind the idea, consultant John Gorman, wrote: "If you're a Medicare Advantage Plan with a Medicare ACO in your neighborhood, or worse in your network, start sleeping with one eye open. It's now time to keep your friends close and your enemies closer."
Medicare ACOs face common challenges that may be insurmountable, argues Gorman, founder of the eponymous Gorman Health Group. Launching a Medicare Advantage plan, may coincide with the original goals of ACOs and the financial and organizational interests of many health systems.
Between the inability to control beneficiary out-migration, the inability to generate savings in already-efficient markets, like San Diego, and the possibility that patients may opt-out, health systems in ACOs may be "scratching their heads and wondering how to monetize the millions they've invested in population health and complex case management--the 'hard part' of Medicare managed care," Gorman wrote recently.