Medicare Shared Savings Programs: Higher Cost Accountable Care Organizations are More Likely to Achieve Savings

Abstract

In the United States, Medicare's flagship Accountable Care Organization (ACO) program, the Medicare Shared Savings Program (MSSP), is under close scrutiny to improve health care quality and decrease costs. First year measures, released in November 2014, reveal a wide range of financial and quality performance across MSSP participants. In this observational study we used 2013 results for 220 participating ACOs to assess key characteristics associated with generating savings. ACOs with higher baseline expenditures were significantly more likely to generate savings than lower cost ACOs. Average quality scores for ACOs that successfully reported on quality were not different between organizations that did and did not generate savings. These findings suggest ACOs that had lower utilization prior to program enrollment are less likely to be rewarded in the current program. This has important policy implications for the MSSP's ability to attract and retain efficient ACOs and incent efforts to reduce waste and improve quality.

Keywords: Cost of health care; Financing health care; Health care quality; Health reform; Medicare accountable care organizations.

Figure 1.

Per Capita Savings Achieved for Each MSSP Organization, by 2013 per Capita Benchmark Expenditures Note. Source: Medicare Shared Savings Program Accountable Care Organizations Performance Year 1 Results [20] and variables calculated from this dataset.