Medicare's independent actuary has certified that an Obamacare program, the Pioneer Accountable Care Organization (ACO), has saved $384 million over the past two years. The Pioneer ACO rewards hospitals that deliver high-quality care at lower-than-expected costs — and punishes high spenders. The Obama administration is now eying how to make this program bigger — and, ideally, generate even more savings.
In a historic announcement, the Department of Health and Human Services (HHS) has set a goal of tying 30 percent of traditional, or fee-for-service, Medicare payments to quality or value through alternative payment models, such as Accountable Care Organizations (ACOs) or bundled payment arrangements by the end of 2016, and tying 50 percent of payments to these models by the end of 2018. This is the first time in the history of the Medicare program that HHS has set explicit goals for alternative payment models and value-based payments.
The Center for Medicare and Medicaid Services (CMS) recently announced The ACO Investment Model, a new initiative for rural and underserved communities across the country participating in the ACO program. CMS will invests $114 million to encourage quality improvement and care coordination through the use of health information technology, helping to move our healthcare system to one that values quality over quantity and preventing illness over treating people after they get sick.
Early success in the Pioneer model suggests that in the long term, accountable care will offer patients the improved outcomes they deserve and ACOs the sustainable business model they need to stay focused on delivering high-value care.