On July 16, 2013, CMS announced the first year outcomes from the Pioneer ACO Model.
While CMS lauded the positive results, financial details were not disclosed on all of the participating organizations, and CMS’ initial press release alluded to the results of just 15 of the 32 Pioneer ACOs.
In recent weeks, TripleTree has analyzed over 100 media reports and press releases in an effort to construct a more comprehensive view of the Pioneer ACO results. This analysis complements our recent research publication on the ACO opportunity and identifies themes not covered in that report. The following highlights some of our new findings:
Shared Savings: Eighteen (56%) of the Pioneer ACOs delivered savings, and thirteen reportedly had enough savings (>1% of the CMS benchmark) to make them eligible for shared savings. We were able to identify 12 of the 13 organizations that achieved shared savings.
- Banner Health Network (1)
- Bellin Thedacare Partners (1)
- Beth Israel Physician Org (1)
- Brown & Toland Physicians (1)
- Dartmouth Hitchcock ACO (1)
- Franciscan Alliance (1)
- Heritage California ACO
- Michigan Pioneer ACO (1)
- Monarch Healthcare
- Montefiore ACO (1)
- Mount Auburn Cambridge (1)
- OSF Healthcare System (1)
- Partners Healthcare (1)
- Renaissance Health Network
- Steward Healthcare System (1)
- Trinity Pioneer ACO
- University of Michigan (3)
No Shared Savings: Fourteen (44%) of the Pioneer ACOs did not deliver savings, and one ACO sustained losses exceeding the 1% CMS benchmark, thereby requiring them to return dollars to CMS.
- Allina Hospitals and Clinics
- Atrius Health
- Fairview Health Services
- Genesys PHO
- Healthcare Partners of Nevada (3)
- Healthcare Partners Medical Group (3)
- JSA Care Partners (3)
- Park Nicollet Health Services
- Physician Health Partners (3)
- Plus (2),(4)
- Presbyterian Healthcare Services (4)
- Primecare Medical Network
- Seton Health Alliance (3)
- Sharp Healthcare ACO
(1) Shared savings
(2) Shared losses
(3) Transitioning to MSSP
(4) Exiting ACO program
Eight of the 14 Pioneer ACOs (57%) that did not achieve savings are transitioning out of the Pioneer ACO program. This includes six organizations transitioning to the Medicare Shared Savings program (MSSP) which is designed to improve outcomes and increase value of care but with somewhat less financial risk, and two that are exiting from all CMS ACO arrangements. It bears noting that while the University of Michigan ACO did achieve savings, they have elected to transition to MSSP, citing a need to have simpler administrative requirements and IT interoperability in order to sustain the financial risk required by the Pioneer program.
As shown in Figure 1 below:
- Fourteen (78%) of the 18 ACOs that achieved savings were located in the Northeast or Midwest.
- Nine (64%) of the 14 ACOs that had losses were located in the West and Southeast.
- Additional Insights: Many industry sources have opined that the Pioneer ACOs in locations with a lower CMS cost benchmark had less of an opportunity to achieve savings because they had less low hanging fruit. However, our analysis using 2010 total Medicare reimbursements as reported by the Dartmouth Atlas (as our proxy for the CMS cost benchmarks) refutes this sentiment. Our findings were that the average CMS reimbursements per Medicare enrollee among Pioneer ACOs that didn’t achieve savings was $9,577 – or $259 higher than the $9,318 average reimbursements per enrollee among the Pioneer ACOs that achieved savings. One possibility for this is that providers in lower cost markets have established the necessary infrastructure to deliver care efficiently, and therefore are better positioned to achieve further cost reductions without sacrificing quality.
Electronic Medical Record Systems
(Click image for a larger view)
As shown in Figure 2, we were able to identify the EMR systems used by 28 of the 32 Pioneer ACOs (16/18 with savings; 12/14 with losses):
- Among ACOs with savings, there was not a predominant system being utilized.
- Epic is being used by 31% (five of the 16).
- NextGen by 19% (three of the 16).
- Allscripts, athenahealth, GE Centricity, and Cerner are each used in one organization.
- Among the 12 ACOs with losses where we were able to identify the EMR platform, five are using Epic and five are using Allscripts (or 42% each).
- Additional Insights: Beyond noting the EMR systems implemented across the Pioneer ACOs, our team has now started gathering information on the data and analytics tools being used to manage the cost and clinical care of their populations.
Organizational Models(Click image for a larger view)
As shown in Figure 3, among the 18 ACOs with savings:
- Ten (56%) function as Integrated Delivery Networks (IDN).
- Three (17%) are organized as Hospital System/Physician Group Partnerships.
- Five (28%) are Physician Groups.
- Among the 14 ACOs without savings
- Three (21%) function as Integrated Delivery Networks.
- Four (29%) are organized as Hospital System/Physician Group Partnerships. (This includes Texas-based Plus ACO, the single entity reporting a shared loss)
- Seven (50%) are Physician Groups.
- Additional Insights: The organizational structure of IDNs and Physician Groups may be an inherently easier model around which to align incentives. Whereas Hospital System / Physician Group partnerships can function cohesively, they typically need to mature their models to get beyond competing incentives.
(Click image for a larger view)
By our assessment, all bets are off on the ability for ACOs to achieve financial success within the schemes developed by CMS. Year 2 results for the Pioneers and the financial results for organizations participating in the MSSP model will be telling.
On October 16, TripleTree will facilitate a webcast to further discuss some of the nuances behind these numbers. Please click here to register, or contact us with questions.
Until then, let us know what you think.