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Pioneer ACOs Reduced Low-Value Services in Year One of Medicare Program

Reductions cut spending nearly 5%, JAMA Internal Medicine study finds

Medicare's Pioneer accountable care organizations (ACOs) achieved a slight drop in "low-value" services in their first year, according to a study published in JAMA Internal Medicine and reported by FierceHealthcare.

Researchers, led by Aaron Schwartz, PhD, of the Department of Health Care Policy at Harvard Medical School, analyzed claims for 31 services associated with minimal clinical benefit, such as cancer screening, imaging, and cardiovascular testing, incorporating data from 2009 to 2011 as well as 2012. They found that Pioneer ACOs reduced low-value service volume 1.9% in the program's first year, leading to a 4.5% drop in spending on such services. The reduction was more pronounced among ACOs that provided an above-average amount of low-value services.

The biggest reductions were among the most frequently delivered services, such as cancer screening, according to the study. "These results are consistent with the hypothesis that alternative payment models with global budgets can discourage overuse even while preserving broad provider discretion in determining which services are of low value," Schwartz and his team wrote.

The research, Schwartz and his team noted, is limited by the fact that many organizations that volunteered for the Pioneer program were likely ahead of the curve on targeting and cutting wasteful practices. Despite these limitations, they said, the research combined with earlier studies suggests that alternative payment models contribute to greater value in care delivery.

The study also highlights one of the foremost challenges associated with the ACO model in general — the question of getting physicians on board with slowing spending growth, Arnold Milstein, MD, of the Clinical Excellence Research Center at Stanford University, wrote in a related commentary. Health care organizations can improve on this front by presenting waste reduction as an ethical issue, Milstein wrote. "Although adjusting practice to lower costs is a stretch from physicians' traditional role, the well-being of their patients and their communities now depend on it."

The Department of Health and Human Services has bet heavily on the success of the Pioneer program, announcing in May that it will expand the program after it saved nearly $400 million in its first two years in addition to reducing utilization rates for tests, hospitalizations, and procedures. Despite these successes, numerous participants have left the program since it began, and two of its top-quality performers recently announced they may leave due to financial pressures, FierceHealthcare has reported.

Source: FierceHealthcare; September 24, 2015; JAMA Internal Medicine; September 21, 2015.

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