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Insights

Sep 03, 2013

Pioneer ACOs First Year Results: Better Success in Improving Quality than Lowering Costs

Published

Sep 03, 2013

The Centers for Medicare and Medicaid Services (CMS) released long-awaited data about the first-year of the Pioneer ACO program.

The results showed that all 32 participating health systems improved patient care on quality measures such as cancer screenings and controlling blood pressure. However, not all Pioneer ACOs were successful in reducing costs for their covered Medicare beneficiaries. The results indicated that while 18 ACOs were able to reduce their costs and achieve savings, only 13 of these 18 were able to save enough money to be able to share their savings with Medicare (CMMI requires ACOs to achieve at least one percent  savings to be eligible to share savings). Overall, the Pioneer ACO program achieved gross savings of $87.6 million in 2012 for Medicare fee-for-service beneficiaries.  Although not all of the Pioneer ACO participants were able to reduce their costs, they were able to hold growth to an average of 0.3 percent in 2012 compared to an average of 0.8 percent growth for non-Pioneer ACO Medicare beneficiaries.  

CMS reported that seven Pioneer ACOs that did not generate savings are planning to apply to the Medicare Shared Savings Program (MSSP), and two additional ACOs are planning to leave the Pioneer ACO program altogether. The nine organizations that will be leaving the Pioneer ACO program are:  Prime Care Medical Network, the University of Michigan health system, Physician Partners, LLC, Seton Health Alliance, Plus ACO, Healthcare Partners Nevada ACO, Healthcare Partners California ACO, JSA Care Partners, and Presbyterian Healthcare Services. CMS has not indicated which of these organizations will be applying to the MSSP and which organizations will leave the Pioneer ACO program altogether.  

These results convey the challenges even the most advanced and integrated health systems face in controlling costs for Medicare beneficiaries across the continuum of care, especially while operating under a fee-for-service payment system.  Additionally, the lack of transparency of cost and quality data makes it difficult for organizations to compare what services offered by other organizations may have higher comparative values. We expect the interest level in participating in ACOs to continue, but these results will help providers have a greater understanding of time, effort, and resource required to achieve savings while improving quality. 

For more information on our work with ACOs, please contact Erik Johnson.

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