CMS’s vast shared savings experiment for Medicare has
disappointed again in its second year. The plan was to encourage providers to
assemble into health care systems, called Accountable Care Organizations (ACOs),
to coordinate care and keep people well. The incentive was that the systems
share half (or more) of the resulting savings. The only problem is that the
savings aren’t there. An analysis
by Kasier Health News found that last year, the second year of the program,
the costs of care for patients in 45% of those groups nationally cost more than
they would otherwise have. After paying bonuses, the entire program lost almost
$3 million while it was expected to save
$10 – 320 million in 2014. Pundits are spinning hypotheses for the
disappointing results and Medicare officials say it will eventually work.
Unfortunately CT’s ACOs performed even worse than the
national average. Among the ten ACOs serving CT Medicare beneficiaries, only
WESTMED Medical Group in Purchase NY earned a savings bonus from Medicare last
year. Collectively those ten ACOs spent $12.5 million over what care would have
cost without the program. Among the four ACOs that serve only CT residents
(Hartford Healthcare, MPS, ProHealth and St. Francis together covering 82,027
people) none earned a bonus and they collectively spent $14 million over
targets.
CT’s administration, through their SIM plan, has encountered
serious challenges with plans to put every state resident into this same
shared savings payment model. Advocates are especially concerned about a rush
to put 200,000 Medicaid members into the untested model by July 1, 2016. Details
of Medicaid’s ACO program must be set in two weeks to meet that deadline and
dozens of critical decisions haven’t been explored. CT’s budget could be hit
hard if this program doesn’t perform. If CT’s Medicaid ACOs perform as they
have for the Medicare program, the program would cost an extra $93.7
million/year.
