Commercial ACOs Produce Medicare Savings, Study Finds

When a provider group inks an accountable care organization contract with a commercial payer, the associated benefits can spill over to other insurers' beneficiaries, including Medicare enrollees, according to a recent study published in the Journal of the American Medical Association.


Researchers looked specifically at how Blue Cross Blue Shield of Massachusetts' Alternative Quality Contract, a commercial ACO initiative, affected Medicare beneficiaries not covered by the AQC. The study compared spending and quality measures for Medicare beneficiaries cared for by 11 AQC providers and providers not in the AQC initiative.

Results showed Medicare billing across the AQC providers to be 3.4 percent lower than expected, mostly due to decreased expenditures in areas such as outpatient care, office visits, emergency department visits, minor procedures, imaging and lab tests.

"These findings suggest potential for these payment models to foster systemic change in care delivery," the researchers note. "Evaluations of ACO programs may need to consider spillover effects on other patient populations to assess their full clinical and economic benefits."

Though these results are encouraging, showing ACOs can have a major effect on healthcare costs and further systemic change, they also present a "free-riding" problem. Since insurers can reap the benefits of an ACO without having value-based contracts themselves, they may be less likely to pursue the model on their own. "Additional efforts to foster multipayer participation in global payment systems, such as recent state initiatives and provisions in Pioneer Medicare ACO contracts, may be important," the study states.

More Articles on Accountable Care Organizations:
5 Recent ACO Findings
2 Playbooks for ACOs to Improve Cost Savings
Medicare Outpaces Commercial ACO Growth: Report

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