One-fourth of ACOs Save Enough $$ to Earn Bonuses. This is the title of an article by Jordan Rau that appeared in Kaiser Health News on Sept. 17, 2014. ACO is an acronym for Accountable Care Organizations. These organizations are voluntary and considered an important part of meeting the objectives of the Affordable Care Act (ACA) to reduce health costs. They commit to reducing the costs of patient care while improving quality of care. If they succeed, they get bonuses. If they fail, they pay penalties back to the Medicare system.
Quoting Rau’s article, the objective of setting up the ACOs is to have doctors focus on preventative care and early intervention before patients require major surgeries or extended treatment programs.
ACOS are voluntary affiliations in which doctors and hospitals join together to coordinate care with the lure of earning extra money if they save Medicare money while maintaining the health of their patients. The program aims to encourage doctors to focus on keeping patients healthy and to intervene quickly if they are struggling, rather than waiting until they need complex — and for doctors in the old pay model, lucrative — operations or other kinds of care.
The Centers for Medicare and Medicaid Services (CMS) reported the performance for the ACOs providing Medicare services. There are several categories of ACO programs, with the Pioneer ACO program assuming the highest risks and the highest rewards for documented savings and patient results from the programs. The Pioneer ACO program saved Medicare $96 million and received $68 million in bonuses.
The Pioneer ACOs had about 20% lower increases in costs versus fee-for-service providers, while improving quality of service and patient satisfaction. Some of the key areas of focus were predicting fall risk in seniors, reducing high blood pressure, and risk assessment and smoking cessation programs.
The Medicare Shared Savings program reported first year results. 53 ACOs saved $652 million below expected costs and received $300 million in performance bonuses. Another 52 ACOs showed some savings, but not enough to receive any performance bonuses. ACO organizations that reported their performance improvements received bonuses, and will have fewer restrictions on payment adjustments in 2015 because of their Performance Quality Reporting System (PQRS) participation.
Like the ACA itself, success for the ACOs requires additional participation by these organizations, as well as continued growth in those participating in the ACA programs. The emphasis on prevention and early intervention is the key element in the cost reduction in health care. About $500 billion is spent in the US each year for treatments provided by Medicare and Medicaid. These initial improvements in reducing Medicare spending are very small versus the total cost. The improvements are showing documented savings from the Affordable Care Act and a lowering of costs among ACO providers that meets stated goals for the program.
In addition to getting insurance coverage for millions of uninsured Americans, the ACA is helping generate savings to patients by focusing on prevention and better lifestyle choices. Physicians and health care organizations are increasing participation in ACOs because it makes them more money while saving the Medicare system current and future expenditures.