Obamacare-like groups may produce 'spillover' savings

NEW YORK Wed Aug 28, 2013 1:55am IST

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NEW YORK (Reuters Health) - A program focused on primary care and coordination of services between groups of doctors and hospitals reduced costs for patients who were not even covered by the plan, according to a new study.

Previous research has found that the Massachusetts accountable care organization, or ACO, saved money and improved quality of care for people it covered directly.

ACOs are a critical component of President Barack Obama's 2010 Affordable Care Act. The organizations are typically paid based on the quality rather than quantity of care they provide, and the hope is that they will coordinate services and prevent excess spending.

In the new study, researchers found that Medicare spent less money on services for older patients after their health providers became part of the ACO, and that there was no change in the quality of care after the switch.

"We found fairly substantial spillover effects in terms of savings for Medicare beneficiaries," Dr. J. Michael McWilliams, who led the research at Harvard Medical School in Boston, said.

"The spillover effects suggest those responses (to new incentives) have been very encouraging, and that the provider groups are responding with really structural or fundamental or systemic changes in the ways they're providing care to patients," he told Reuters Health.

He gave the example of a computer reminder that keeps doctors from ordering unnecessary and expensive tests, such as MRIs for people with low back pain. Once set up, that type of alert would show up whether a given patient was covered by the ACO or by Medicare.

The new data come from Medicare beneficiaries covered in 2007 through 2010. In 2009 and 2010, some of their provider organizations joined an early commercial ACO run by Blue Cross Blue Shield of Massachusetts.

The researchers compared spending for the approximately 104,000 patients per year whose providers switched with the 336,000 whose providers did not join the ACO. Care for all patients in the study was paid for under fee-for-service Medicare plans.

The average quarterly spending per beneficiary at the start of the study was just under $3,000. Compared to people treated in a health system that did not join the ACO, Medicare spending dropped by $99 the second year after a switch for those in the ACO-affiliated group - about a 3 percent savings.

Reductions largely came from outpatient care, with relative decreases in spending on office visits, minor procedures and imaging tests, the researchers reported Tuesday in the Journal of the American Medical Association.

"Their results are, I would say, somewhat encouraging," Dr. Lawrence Casalino, head of outcomes and effectiveness research at Weill Cornell Medical College in New York, said.

"They didn't find huge savings."

Stephen Shortell, who studies ACOs at the University of California, Berkeley School of Public Health, said that if enough of a doctor's or hospital's patients are covered by an ACO, the provider tends to change behaviors for all patients.

"It's too much of an investment to do it just for a subpopulation," Shortell, who wasn't involved in the new research, told Reuters Health. "They're going to do it for everyone. That's I think a key part of the story here."

Shortell said whether the findings will generalize to elsewhere in the country depends in part on how many patients choose to become part of an ACO.

"If that's a relatively small percent, there's unlikely to be the same spillover effects," he said.

Casalino, who also wasn't involved in the new study, agreed that with more ACOs on the way, there are many unknowns.

"I don't think you can go far drawing strong conclusions from this, other than there might be some spillover that saves some money," he told Reuters Health.

"Going forward, the more health plans that get involved in this in any geographic area, the better for everybody."

SOURCE: bit.ly/MvXYT6 Journal of the American Medical Association, online August 27, 2013.

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