A high-profile Medicare project pushing doctors and hospitals to join together to operate more efficiently has yet to save the government money. Nearly half of the groups’ care was more costly than the government estimated it would be based on historical data, federal records show.
The Centers for Medicare Medicaid Services offers bonuses to health care practitioners who band together as accountable care organizations, or ACOs, to take care of patients. The financial incentives are intended to encourage these doctors, hospitals, nursing homes and other institutions to keep patients healthy rather than primarily treat illnesses, which is what Medicare payments traditionally have rewarded. ACOs that save a substantial amount get to keep a share of the savings as a bonus.
The Obama administration touts ACOs as one of the most promising reforms in the 2010 federal health care law. The administration set a goal that by the end of 2018, half of Medicare spending currently based on the volume of procedures a doctor or hospital performs will instead be linked to quality and frugality. But so far the ACO program generally has been a one-way street. Most doctors and hospitals have been happy to accept bonuses while declining to be on the hook for a share of excessive costs run up by their patients.
Last year, Medicare paid $60 billion to 353 ACOs to take care of nearly 6 million Medicare beneficiaries. Some ACOs made significant strides in reducing use of hospitals and other costly resources. But patients at 45 percent of groups cost Medicare more than the government had projected based on historic trends, records show. After paying bonuses to the strong performers, the ACO program resulted in a net loss of nearly $3 million to the Medicare trust fund, government records show.
“It’s turning out to be tougher to transform care and realign delivery than people had expected,” said Eric Cragun, an analyst with The Advisory Board Company, a consulting group based in Washington.
Medicare officials said most ACOs are still in their infancy, and that performance and savings will improve with experience. “In
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