For Immediate Release
September 11, 2012

New Medical Care Networks Show Savings

A new model for delivering medical care, one promoted by the federal health care law, holds promise for slowing the cost of treating the sickest, most expensive patients, according to a new study.

The sweeping law, enacted in 2010 and upheld by the Supreme Court this summer, encourages the creation of “accountable care organizations” — networks of hospitals, doctors groups and other health care providers that collaborate to keep a defined group of patients healthier. The groups share in the savings if they meet quality and cost targets.

The study, which is being published Wednesday in The Journal of the American Medical Association, found that a predecessor to accountable care organizations achieved particular savings in caring for patients eligible for both Medicare and Medicaid.

Many of those patients have multiple, severe health conditions and are especially expensive: The nation’s nine million “dual eligibles,” as they are known, make up 15 percent of the Medicaid population but account for 39 percent of the program’s spending.

In the predecessor program, a Medicare experiment that ran from 2005 to 2010, 10 doctors groups from around the country received bonus payments if they met quality targets and achieved lower cost growth compared with Medicare spending on other patients in their region.

The study, conducted by researchers from the Dartmouth Institute for Health Policy and Clinical Practice, found that the growth in spending per “dual eligible” patient slowed by $532 a year, or 5 percent, after doctors groups joined the demonstration program.

Over all, spending on dual eligibles in the program grew at only 60 percent of the rate of the control group.

“The fact that they saved any money at all is a pretty significant finding,” said Carrie H. Colla, the study’s lead author. “It shows promise in that they did significantly improve quality while modestly improving spending.”

The study found that for dual eligibles, the savings came largely from reducing hospital stays.

Savings for the overall patient population in the experiment was more modest: Spending per patient slowed by $114 a year after the 10 doctors groups joined the demonstration program.

The groups varied significantly in how much they spent per patient and how much they slowed the growth of spending over time. The doctors group that spent the most before joining the program — the University of Michigan Faculty Group Practice, based in Ann Arbor — also saved the most, an average of $2,499 per dual eligible patient annually.

But the group that spent the least on such patients before entering the program — Marshfield Clinic, in Wisconsin — also achieved notable savings, the study found, slowing the growth of spending per dual eligible patient by an average of $987 per year.

The findings come as accountable care organizations are forming around the country. According to the Department of Health and Human Services, more than 150 such groups now serve about 2.4 million Medicare patients.

In the predecessor program, the Medicare Physician Group Practice Demonstration, participating doctor groups were eligible for up to 80 percent of any savings they generated if they could also show improvement on 32 quality measures.

View article here.