Medicare’s delivery system reform initiatives achieve significant savings and quality improvements – off to a strong start

HHS.gov: January 30, 2014

Today, the Centers for Medicare & Medicaid Services (CMS) released findings on a number of its initiatives to reform the health care delivery system.  These include interim financial results for select Medicare Accountable Care Organization (ACO) initiatives, an in-depth savings analysis for Pioneer ACOs, results from the Physician Group Practice demonstration, and expanded participation in the Bundled Payments for Care Improvement Initiative.  Savings from both the Medicare ACOs and Pioneer ACOs exceed $380 million.

“These innovative programs are showing encouraging initial results, while providing valuable lessons as we strive to improve our nation’s health care delivery system,” HHS Secretary Kathleen Sebelius said. “Today’s findings demonstrate that organizations of various sizes and structures across the country are working with their physicians and engaging with patients to better coordinate and deliver high quality care while reducing expenditure growth.”

While ACOs are designed to achieve savings over several years, not always on an annual basis, the interim financial results released today for the Medicare Shared Savings Program ACOs show that, in their first 12 months, nearly half (54 out of 114) of the ACOs that started program operations in 2012 already had lower expenditures than projected. Of the 54 ACOs that exceeded their benchmarks in the first 12 months, 29 generated shared savings totaling more than $126 million – a strong start this early in the program. In addition, these ACOs generated a total of $128 million in net savings for the Medicare Trust Funds. ACOs share with Medicare any savings generated from lowering the growth in health care costs while meeting standards for high quality care.  Final performance year-one results will be released later this year.    Read More