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Gainsharing and Shared Savings Continue to Spark Interest

Karen Minich-Pourshadi, for HealthLeaders Media, June 11, 2012

Congress included a provision in PPACA authorizing the Secretary of Health and Human Services to waive shared savings laws "as may be necessary" to implement the program. Otherwise, accountable care organizations could be considered to violate federal anti-kickback laws.

When PPACA passed—and accountable care organizations, shared savings, and bundled payment models with it—financial leaders definitely were interested. Hackensack University Medical Center, for instance, launched a shared savings program in its oncology service line three months ago.

Even so, the legal ground for shared savings is tricky, says Marcotte Stamer. "There is still tremendous cost involved and liability risk [with shared savings models]. You're building a very complex organization and asking providers to sign on and consent to rules that could change."

However, hospitals and health systems that have taken the risk to launch a shared savings programs are finding cost reduction results. For instance, in April 2012, Advocate Health Care System, based in the Chicago area, released its Value Report. containing data from its first full year of running an accountable care organization and a shared savings program. The results show major savings: Advocate set a generic prescribing target rate of 73% or better for its physicians and reached 74%, resulting in savings of $12.4 million. Its asthma outcomes initiative resulted in a control rate of 17% above the national average for its patients, saving $8.9 million annually in both direct and indirect medical costs. The report also shows other savings.

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1 comments on "Gainsharing and Shared Savings Continue to Spark Interest"


Michael Cylkowski (6/11/2012 at 8:14 PM)
Gainsharing has a one or two year life before physicians lose interest, depending on how aggressive the first year savings were. By the third year, the physicians have no benefit, monetary or otherwise. They are then using the supplies they would never have opted for if they hadn't fallen for the scam in the first year. Gainsharing is a misnomer; the gain from year three on is entirely for the healthcare institution. And, by the way, outcomes is not a metric in gainsharing.