A precursor program similar to the ACO shows some cost savings

A precursor program similar to the ACO model generated some Medicare savings, especially among dual-eligible beneficiaries, according to a study in the Journal of the American Medical Association. 

For the study, researchers examined data for 10 physician groups who participated in the Medicare Physician Group Practice Demonstration (PGPD), in which participating physician groups received bonus payments if they achieved lower cost growth than targeted, and met quality targets.  The program has many similarities to the current ACO model. 

Key findings include:

  • Savings per patient was approximately $114 per year.
  • For dual-eligible beneficiaries, savings were significantly higher, at $532 per patient.
  • There was variation in savings across practice groups, ranging from an overall mean per-capita annual saving of $866 to an increase in expenditures of $749.
  • Thirty-day medical readmissions decreased overall, and for dually-eligible beneficiaries, surgical readmissions also decreased.

(Sources: The Advisory Board Daily Briefing, www.advisory.com, September 12, 2012; Journal of the American Medical Association, http://jama.jamanetwork.com, September 12, 2012)