Affordable Care Act hospital initiative reduces Medicare spending

The Medicare Pioneer Accountable Care Organization program has helped reduce spending on low-value medical services by nearly 5 percent.

By Stephen Feller

BOSTON, Sept. 21 (UPI) -- Researchers found that goals to lower the cost of Medicare by reducing the use of low-value or low-benefit medical services have been successful, while not decreasing the level of service patients receive.

The Medicare Pioneer Accountable Care Organization, the creation of which was required by the Affordable Care Act, financially rewards health care providers that keep spending below a specified budget while also achieving high performance measures for quality of care.


Cutting the rate of unnecessary services is one of the key ways the Affordable Care Act is expected to lower costs of healthcare nationally.

"In previous work we found that the ACO model can reduce total Medicare spending while improving quality in some key areas, or at least without causing quality to deteriorate," said Dr. Michael McWilliams, a researcher at Brigham and Women's Hospital, in a press release. "Our findings from this study suggest that Pioneer ACOs are responding to broad incentives to lower spending by cutting back on wasteful services in particular-an important and encouraging response."

Researchers compared Medicare data from between 2009 and 2012, before and after the Pioneer program took effect, specifically measuring a list of 31 services -- such as unnecessary imaging for back pain, headaches, and sinusitis, and preoperative testing before low-risk surgeries that do not require preoperative testing -- that are often used at doctors' discretion but not always necessary.


To determine whether services were needed, researchers combined information from Medicare claims data with information about patient age, diagnosis and clinical setting.

After a 1.2 percent reduction in total spending by ACOs in the first year of the program, researchers reported a 4.5 percent drop in spending on low-value services with little effect on the overall quality of care. McWilliams said the results of the data review show that healthcare providers are targeting the services and procedures they need the least.

"Doctors are in the best position to know what care is wasteful," said Dr. Aaron Schwartz, a medical student at Brigham and Women's Hospital. "The ACO program provides broad incentives to reduce spending rather than targeted incentives to cut any specific treatments,and doctors appear to have responded by delivering less wasteful care."

The study is published in JAMA Internal Medicine.

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