What does Dartmouth dropout mean for the future of ACOs?

Dartmouth College in Hanover, N.H., has dropped out of the accountable care organization program it helped develop, reports The New York Times.

Dartmouth attributed the decision to mounting financial losses in the federal program.

Dartmouth's ACO cut Medicare spending on hospital stays, medical procedures, imaging and tests, an evaluation for the federal government showed, according to the article. However, the report states, the ACO faced possible financial penalties because it failed to meet federal officials' money-saving benchmarks.

"We were cutting costs and saving money and then paying a penalty on top of that," Robert A. Greene, MD, an executive vice president of the Lebanon, N.H.-based Dartmouth-Hitchcock health system, told The New York Times. "We would have loved to stay in the federal program, but it was just not sustainable."

The report points out that the dropout of Dartmouth raises questions about the future of ACOs.

ACOs overall saw mixed financial results in 2015. Across the board, 2015 was a great year for quality improvement among Pioneer ACOs, but not all participants did as well financially, according to CMS data. Together, the Pioneer ACOs generated net savings of $37 million for Medicare in 2015, and every organization improved in overall quality.

Eight of the 12 Pioneer ACOs were able to generate savings for Medicare, but just six shared in savings. Four generated shared losses, but just one had to pay back those losses to CMS.

In the fourth performance year of the Medicare Shared Savings Program — 2015 — ACOs generated net savings of $429 million for Medicare and improved quality performance on several different measures, according to CMS data. About 30 percent of the 393 ACOs participating in 2015 earned shared savings.

CMS Acting Administrator Andy Slavitt said the advantages of ACOs were starting to be felt, the report states. The version right now is an early version "like the iPhone 2," he said on Twitter.

Elliott S. Fisher, MD, the director of the Dartmouth Institute for Health Policy and Clinical Practice, said he was cautiously optimistic about the future of ACOs, according to the report. "Evidence on spending suggests modest savings over all," he said, according to The New York Times, though he acknowledged that in Medicare "the model has yet to achieve the benefits many advocates hoped for."


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