By Matthew DeCamp, MD, PhD


Are you one of the more than 20 million Americans who receive medical care via an accountable care organization (ACO)? Are you a clinician who provides care within an ACO? Or are you a member of the general public interested in how money is used in public programs, such as Medicare?


If you are in any of these groups, you may be interested in a recent paper I co-authored in the American Journal of Managed Care.


Remember that when hospitals, clinicians and other providers form an ACO and then provide high quality care at lower cost, the ACO receives a portion of the savings generated. ACOs have significant leeway in how these “shared savings” are used. (ACOs cannot give savings back to patients directly.)


In an earlier post, I discussed our paper in JAMAthat laid out some basic ethical principles that could help determine how to fairly distribute shared savings. At that time, we knew little about what ACOs were planning to do with their shared savings.


Now we know more. As a result of public reporting requirements and an emphasis on transparency, ACOs that contract with Medicare in its Shared Savings Program (currently covering over 7 million Medicare beneficiaries) must publicly report their shared savings distribution plans – that is, what they plan to do with their savings if they receive them (not all do). Most of them post their plans online.


We reviewed the websites of 338 Medicare Shared Savings Program ACOs, compiled data on what they planned to do with their shared savings, and did some basic analysis on them. Here are 3 key findings:


  • At the time of our study, 52% of ACOs (176/338) included detailed percentages for how the ACO would distribute its shared savings. These percentages were reported as to ACO infrastructure versus ACO participants (where participants include hospitals, primary care professionals (PCPs), and specialists).
  • Planned uses of shared savings vary widely. The range on the amount of savings planned for the ACO’s infrastructure was 0-100%, and the range on the amount of savings planned for the ACO’s hospitals, PCPs, and specialists was 0-100%.  On average ACOs planned to give about 1/3 to infrastructure and 2/3 to its hospitals, PCPs, and specialists.
  • In our preliminary analysis of early ACOs, those with more participants and ACOs that gave more than half of their savings to their PCPs and specialists were more likely to have succeeded at generating any savings by delivering high quality care at lower cost. While by no means causal, this finding raises a number of interesting questions. Do clinicians within an ACO change behavior more when they perceive shared savings to them rise above this threshold? Or were ACOs that planned to give this to clinicians already well prepared to earn savings?


Do our findings confirm that ACOs are fairly distributing their savings? At this early stage, it is hard to tell. We expect that more ACOs are now reporting detailed percentages, and we also expect that ACO plans for shared savings uses may vary over time as ACO needs and priorities change. It will be interesting to see how ACO shared savings plans develop and change over time.


It would also be very interesting to learn what patients, clinicians, and the general public think about these shared savings uses. Be sure to read more here.



Image: Tax Credits – CC BY 2.0

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Matthew DeCamp

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