After accounting for selective dropping of high-cost physicians and patients, savings in ACOs were little to none, according to a recent study.
High-cost patients and high-cost doctors were much more likely to exit accountable care organizations (ACO) than low-cost patients and doctors, according to a study published in the Annals of Internal Medicine Monday evening.
Researchers from the University of Michigan analyzed data from more than 6 million Medicare beneficiaries between 2008 to 2014 and measured total spending, four quality indicators, and hospitalization for a broken hip.
The study concluded that ACOs in the Medicare Shared Savings Program (MSSP) did not show improvement in spending or quality after selective dropping of clinicians and their patients from the program.
Adam Markovitz, a PhD candidate at the University of Michigan and first author on the study, told HealthLeaders that the study's conclusions indicate ACOs have a certain risk-aversion around high-cost patients and doctors, adding that organizations considering participation in the program have to answer the issue that Medicare hasn't fully resolved yet.
Markovitz said that the highest cost doctors were twice as likely to exit MSSP ACOs than average-cost doctors, and that when doctors do leave, their patients are more likely to leave as well.
"However, even among patients whose doctors stayed in ACOs, higher cost beneficiaries are more likely to exit ACOs as compared to low-cost patients, suggesting there's some other mechanism by which high-cost patients leave ACOs," Markovitz said. "After accounting for this non-random exit of high cost patients and high-cost doctors, we found that participation in ACOs are associated with little to no savings."
While the data doesn't directly explain the motives behind high-cost patients leaving ACOs, Markovitz said there are multiple possibilities for the trend.
One suggestion is that patients would follow their doctors out of an ACO due to the trust and loyalty built through that clinical relationship, while another would be that executives at hospitals or physician practices are voluntarily submitting which doctors are participating in their ACO, even though the doctors remain with the hospital.
The University of Michigan study comes six months after the Centers for Medicare & Medicaid Services (CMS) released a final rule MSSP ACOs entitled "Pathways for Success."
The regulatory change included a reduction in the time an ACO could participate in MSSP without "taking accountability for healthcare spending," while seeking to increase the flexibility for performance-based risk ACOs to innovate.
Prior to announcement of the final rule, MSSP stakeholders like the American Hospital Association warned CMS that tinkering with the program could negatively impact participation.
The study has received criticism in the days following its release, including pushback from the National Association of ACOs (NAACOS).
According to a statement sent to HealthLeaders by NAACOS spokesperson David Pittman, the organization stated that there should "be no debate on whether or not ACOs save money," instead urging Congress and CMS to work on promoting participation to build on savings that have already been achieved through the program.
NAACOS also cited a review of the study by The Incidental Economist blog, which "identified multiple sources of bias" in the study's methodology that ultimately led to "erroneous conclusions."
In a tweet to HealthLeaders Monday, Michael McWilliams, MD, PhD, a professor of healthcare policy at Harvard Medical School and a coauthor of the blog post, said the study had "major problems."
For hospital and health system executives, Markovitz advised them to fully examine the study's data to achieve a better understand of the actual improvements and savings from MSSP before deciding to join an ACO.
Markovitz acknowledged the widespread popularity of ACOs during the past decade but stressed the importance of evaluating the program for its effectiveness.
"Evaluating [ACOs] is difficult because in order to make these programs more palatable to both lawmakers and physician groups, Medicare often makes participation voluntary and gives these organizations tremendous latitude on how they specifically choose to participate, including which physicians in their organization they choose to include in their ACOs," Markovitz said.
He added that the research team anticipated that the MSSP ACO savings witnessed in other studies might be driven by preferential participation of motivated hospitals or organizations already trying to save money.
"Somewhat to our surprise, we found that instead some of the apparent savings were driven by non-random exit from the program of high-cost patients and doctors," Markovitz said.
Editor's note: This story has been updated to include commentary from the National Association of ACOs.
Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.
Highest cost doctors were twice as likely to exit MSSP ACOs than average-cost doctors.
"After accounting for this non-random exit of high cost patients and high-cost doctors, we found that participation in ACOs are associated with little to no savings," Adam Markovitz, a PhD candidate at the University of Michigan and first author on the study, said.