Farmington, Conn.-based ProHealth Physicians accountable care organization reduced emergency room visits and hospitalizations in its first year, but did not achieve shared savings with Medicare due to the increasing cost of care, according to the New Haven Register.
ProHealth Physicians joined the Medicare Shared Savings Program in January 2013 with the incentive to split savings 50-50 with Medicare. The ACO's benchmark cost per patient, based on expenditures from three previous years, was set at $9, 955. The physician group, which includes 400 practitioners across 90 clinics in Connecticut, instead generated costs of $10,514 per patient in 2013.
This was a 5.6 percent increase in cost, despite price drops between 2012 and 2013 at the three most expensive affiliated hospitals, according to the report.
The higher costs were due in part to more ProHealth patients attending facilities with increased rates, John Lynch, ProHealth's vice president for research and government affairs, told the Register. For example, 26 percent of ProHealth patients used Hartford Hospital, up from 22 percent, while the hospital increased its price per admission by 10 percent in 2013.
The additional responsibilities to coordinate care and operate as an ACO will go unreimbursed until the ACO can share in savings. Lynch believes the lack of reimbursement could lead to a drop in care coordination, according to the report.
He said price transparency can help patients seek care at facilities with lower fees in 2014. The ACO plans to cut costs further by tracking discharged patients in a more timely matter and reducing nursing home stays.
Only one in 11 Connecticut Medicare ACOs earned a shared savings bonus, according to the report.
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