(Bloomberg) — An ambitious Patient Protection and Affordable Care Act (PPACA) experiment in cutting health care costs led to a reduction of about 1.2 percent in spending on Medicare patients in its first year, researchers said, calling the savings a promising start.
Still, the government may need to make changes to keep hospitals and doctors in the program, known as Pioneer, Harvard University researchers said in a paper published by the New England Journal of Medicine. Since Pioneer started in 2012, 13 of 32 organizations that initially joined have exited.
Opponents of PPACA often criticize it for focusing on expansions of insurance coverage instead of cost reduction. Managers of the Pioneer program seek to achieve efficiencies by better managing care for patients with chronic diseases. While savings in its first year were modest, it is significant that spending fell at all, said J. Michael McWilliams, an associate professor of health care policy and medicine at the Harvard Medical School who led the study.
“It would be far less promising if we found no effect on Medicare spending,” McWilliams said in a phone interview.
Pioneer is one of PPACA’s experiments in so-called “accountable care,” in which hospitals and doctors are asked to closely monitor their sickest patients and better coordinate their care to reduce wasteful spending. In exchange, the health providers share in any savings.
Joe Antos, a health economist at the American Enterprise Institute who is critical of PPACA, called the first-year savings for the Pioneer accountable care organization (ACO) program unimpressive. “One has every reason to be skeptical about what the future holds if you only get 1.2 percent savings in the first year, when everyone’s paying attention,” he said.
“Is this a model that’s going to improve? If it does improve, can you expect savings on a more continuous basis or are these savings sort of flashes in a pan?”
The 32 Pioneer participants produced a total of $118 million in savings for Medicare, McWilliams and his colleagues found. They claimed about $76 million in bonuses.