TY - JOUR
T1 - VALUE AND PERFORMANCE OF ACCOUNTABLE CARE ORGANIZATIONS
T2 - A COST-MINIMIZATION ANALYSIS
AU - Parasrampuria, Sonal
AU - Oakes, Allison H.
AU - Wu, Shannon S.
AU - Parikh, Megha A.
AU - Padula, William
PY - 2018/7/11
Y1 - 2018/7/11
N2 - Objectives:: Determine the relationship between quality of an accountable care organization (ACO) and its long-term reduction in healthcare costs. Methods:: We conducted a cost minimization analysis. Using Centers for Medicare and Medicaid cost and quality data, we calculated weighted composite quality scores for each ACO and organization-level cost savings. We used Markov modeling to compute the probability that an ACO transitioned between different quality levels in successive years. Considering a health-systems perspective with costs discounted at 3 percent, we conducted 10,000 Monte Carlo simulations to project long-term cost savings by quality level over a 10-year period. We compared the change in per-member expenditures of Pioneer (early-adopters) ACOs versus Medicare Shared Savings Program (MSSP) ACOs to assess the impact of coordination of care, the main mechanism for cost savings. Results:: Overall, Pioneer ACOs saved USD 641.24 per beneficiary and MSSP ACOs saved USD 535.59 per beneficiary. By quality level: (a) high quality organizations saved the most money (Pioneer: USD 459; MSSP: USD 816); (b) medium quality saved some money (Pioneer: USD 222; MSSP: USD 105); and (c) low quality suffered financial losses (Pioneer: USD -40; MSSP: USD -386). Conclusions:: Within the existing fee-for-service healthcare model, ACOs are a mechanism for decreasing costs by improving quality of care. Higher quality organizations incorporate greater levels of coordination of care, which is associated with greater cost savings. Pioneer ACOs have the highest level of integration of services; hence, they save the most money.
AB - Objectives:: Determine the relationship between quality of an accountable care organization (ACO) and its long-term reduction in healthcare costs. Methods:: We conducted a cost minimization analysis. Using Centers for Medicare and Medicaid cost and quality data, we calculated weighted composite quality scores for each ACO and organization-level cost savings. We used Markov modeling to compute the probability that an ACO transitioned between different quality levels in successive years. Considering a health-systems perspective with costs discounted at 3 percent, we conducted 10,000 Monte Carlo simulations to project long-term cost savings by quality level over a 10-year period. We compared the change in per-member expenditures of Pioneer (early-adopters) ACOs versus Medicare Shared Savings Program (MSSP) ACOs to assess the impact of coordination of care, the main mechanism for cost savings. Results:: Overall, Pioneer ACOs saved USD 641.24 per beneficiary and MSSP ACOs saved USD 535.59 per beneficiary. By quality level: (a) high quality organizations saved the most money (Pioneer: USD 459; MSSP: USD 816); (b) medium quality saved some money (Pioneer: USD 222; MSSP: USD 105); and (c) low quality suffered financial losses (Pioneer: USD -40; MSSP: USD -386). Conclusions:: Within the existing fee-for-service healthcare model, ACOs are a mechanism for decreasing costs by improving quality of care. Higher quality organizations incorporate greater levels of coordination of care, which is associated with greater cost savings. Pioneer ACOs have the highest level of integration of services; hence, they save the most money.
KW - Accountable care organization
KW - Cost-benefit
KW - Fee-for-service
KW - Performance
KW - Quality
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U2 - 10.1017/S0266462318000399
DO - 10.1017/S0266462318000399
M3 - Article
C2 - 29991357
AN - SCOPUS:85049866820
SP - 1
EP - 5
JO - International Journal of Technology Assessment in Health Care
JF - International Journal of Technology Assessment in Health Care
SN - 0266-4623
ER -