In the News: Sept 27–Oct 4
Physician Group ACOs Produced Savings for Medicare
A recent study in The New England Journal of Medicine examined Medicare spending 3 years after the Medicare Shared Savings Program (MSSP) had been active, comparing fee-for-service Medicare claims between 2009 and 2015 for patients in accountable care organizations (ACOs) prior to and after joining MSSP, with the control group being providers not in the MSSP.
The study looked at hospital-integrated ACOs and physician group ACOs that joined the MSSP in 2012, 2013 and 2014, finding that physician group ACOs produced savings for Medicare (approximately $256.4 million in 2015), while hospital-integrated ACOs did not. Additionally, for physician group ACOs, the savings per Medicare patient only increased throughout the time of the study, with spending per Medicare beneficiary at –$156 for those entering in 2014, –$342 for those entering in 2013 and –$474 for those entering in 2012, which suggests waiting 1 or more years to join the MSSP as a physician group ACO can mean hundreds of dollars in savings per Medicare patient.
While MSSP participation has grown from 2012 to 2018, only 18% of ACOs are currently taking on risk. Recently proposed MSSP changes released on August 9 have implications for how much risk ACOs may take going forward. To learn more about these proposed changes, watch the Sg2 on-demand webinar MSSP Proposed Rule Update: ACOs Anticipated to Take on More Risk.
Medicaid Spending Reached $592.2 Billion in 2017
According to a recent CMS actuarial report, Medicaid enrollment reached 73 million in 2017, with Medicaid spending reaching $592.2 billion—an increase from $580.9 billion in 2016. Most of the spending was on traditional Medicaid beneficiaries, with the Medicaid expansion population costing the federal and state governments $70.8 billion. Enrollment in Medicaid is projected to reach approximately 82 million by 2026, with Medicaid spending projected to reach $1 trillion.
As Medicaid becomes a growing share of health systems’ payer-mix, competing for a diminishing share of commercial patients will be increasingly difficult. Sg2 believes that some health systems may be able to maintain their commercial revenue through a direct-to-employer strategy. To learn about this type of strategy, read the Sg2 report Employer Contracting: Strategies for Netting Commercial Revenue.
Population Health Collaborative Reduced AMI Hospitalizations
A recent Health Affairs article shared the results of a multistakeholder population health collaborative, established to decrease cardiovascular events like heart attacks by spreading best practices to improve hypertension, lipid levels and blood sugar control in San Diego County. After the project’s implementation, acute myocardial infarction (AMI) hospitalization rates decreased by 22% in San Diego County compared to a decrease of 8% across the rest of California. 3,826 AMI hospitalizations were avoided, with an estimated savings of $86 million in San Diego, suggesting multistakeholder population health collaboratives have the potential to improve health care outcomes and lower costs.
Sg2’s forecast projects a 1% increase in cardiovascular inpatient discharges by 2028, including a projected 5% increase in IP discharges for myocardial infarctions. We believe the myocardial infarction growth will push organizations to improve prehospital triage, care coordination and staffing to provide optimum outcomes for patients. To learn action steps for meeting changing CV demand, read the Sg2 Expert Insight Have We Reached the Floor for Inpatient Declines in Cardiovascular Services?
Tags: 2017 Medicaid spending, AMI hospitalization rate decline, commercial revenue, employer contracting, inpatient declines in CV, MSSP proposed rule update, physician group ACOs, population health collaborative