Today’s Managing Health Care Costs Number is 4.5%
Researchers from Harvard Medical School reported in JAMA Internal Medicine yesterday that Medicare Pioneer Accountable Care Organizations (ACOs), which accept the largest amount of financial risk for caing for their designated populations, decreased the use of low value services compared to colleagues in their geography who were not in Pioneer ACOs. The 31 low value services were from the American College of Physicians “Choosing Wisely” campaign, from US Preventive Services Task Force “D” recommendations, Canadian health technology assessments, and the published literature. All were by definition determinable by claims.
The researchers found that on average the Pioneer ACO patients received these services about 5% less than patients attributed to the non-ACO patients during the first year of the Pioneer ACOs (compared to just 4% a year earlier). The research included 700,000 ACO member years and 17 million non ACO member years – and the researchers used a “diff in diff” approach to compare the ACO and control groups. They adjusted for sociodemographics and illness.
This is good news – although by no means definitive proof that ACOs will add value. The researchers did not evaluate the use of high value services, so we don’t know if the total value of care increased. The cost decrease in the Pioneer ACO was lower in year two, but that data was not yet available to the researchers. The big issue is that the actual change was pretty small. I’ve recalculated from the provided data the use of low value services in the ACO and nonACO group for the graphic above. The researchers note that the cost of low value services was $256 per beneficiary – so a 1.9% difference in decline in low value care would yield under $5 bucks per beneficiary. This could be a signal of high value care throughout other categories, in which case ACOs will prove hugely beneficial. These claims codes are also somewhat “gamable,” so that if a low value care index was in widespread use, it’s likely that providers would choose to do claims coding to maximize adjustments and gain the best “score.”
In an accompanying editorial, Arnie Milstein of Stanford notes:
Comparisons of US health care spending with spending in other wealthy countries suggest that lowering population-wide health care spending and then perpetually slowing its growth without impairing quality of care will require more than decreasing low-value services. Decreasing spending will also require economically preventing costly health crises and lowering the cost of producing each unit of service.
We need efforts to lower the use of low value services – and this research shows that Pioneer ACOs appear to have done that in year one. However, we’ll need to address unit cost and prevention of health care crises to obtain the kind of health care cost savings that we need.
