August 8-10, 2018 Summit

FutureFocus January 10, 2018 ACO Savings Not Related To Reduced Hospitalizations

Lisa Remington

In this week’s FutureFocus, we look at an interesting fact about MSSP ACOs and the relationship to hospitalizations. A Harvard study finds ACO preventable hospital admissions didn't decrease, but instead rose. In another article, we look at readmission penalties. Since the onset of the Readmission Reduction Program (HRRP), penalties have continued to rise. The analysis compares FY 2013-2017. In our Washington Report, we examine the Medicare Extenders Package and the impact to post-acute providers.

Lisa Remington, President, Remington Health Strategy Group

Researchers at Harvard Medical School, found hospitalizations overall didn't decline for patients in the Medicare Shared Savings program over a three-year period. In 2012, hospitalizations among ACO patients dropped by 1.6%, but in 2013 hospitalizations fell only by 0.7% and in 2014 hospitalizations actually rose by 0.3%. The study found preventable hospital admissions didn't decrease from 2012 to 2013, and actually rose in 2014. 

 The study also said the savings from the program were mostly concentrated among low-risk patients instead of high-risk patients including those with complex chronic conditions even though the program has focused on that patient population because they account for a large share of healthcare spending. 

"Early savings in the Medicare Shared Savings Program have not accrued in the areas that would be expected if they were driven by care management for high-risk patients and prevention of hospitalizations for ambulatory care–sensitive conditions or hospitalizations in general," the authors wrote. 

"Even though the Medicare Shared Savings program didn't reduce hospitalizations, the authors note it doesn't mean quality of care didn't improve for these patients."

The study's findings didn't highlight where the savings from the Medicare Shared Savings Program were concentrated but previous research suggests ACO savings have been largely focused in reduced use of skilled nursing facilities, outpatient care and home health care. 

Even though the Medicare Shared Savings program didn't reduce hospitalizations, the authors note it doesn't mean quality of care didn't improve for these patients. "Strategies to improve quality may be more distinct from strategies to lower spending than descriptions of the ACO model would suggest," they said. 

The authors suggest the ACO payment policy be retooled to give greater consideration to how the model improves patient experience and clinical outcomes as opposed to utilization measures like number of hospitalizations or readmissions. 

Source: Health Affairs