Medicare's Pioneer ACOs See Modest Drop in Low-Value Care

Marcia Frellick

September 22, 2015

One year after contracts began for the Medicare Pioneer ACO program, a study has found a modest reduction in use of low-value services, which one expert calls “promising.”

The Pioneer program places spending for all services under a global budget, with incentives to stay within the budget while improving performance on quality measures. In 2012, 32 healthcare provider organizations volunteered to participate in the program.

Aaron L. Schwartz, PhD, from the Department of Health Care Policy, Harvard Medical School, Boston, Massachusetts, and colleagues constructed 31 claims-based measures of low-value services, or services that provide minimal clinical benefit on average.

They found that after 1 year, compared with a non-ACO control group, the ACO group had a differential reduction of 0.8 low-value services per 100 beneficiaries (95% confidence interval [CI], −1.2 to −0.4; P < .001), corresponding to a 1.9% differential reduction in service quantity (95% CI, −2.9% to −0.9%) and a 4.5% differential reduction in spending on low-value services (95% CI, −7.5% to −1.4%; P = .004).

The greatest absolute reductions came with the most frequently delivered services: cancer screening and imaging. Cardiovascular testing and procedures underwent the greatest differential reduction in relative terms (−6.3% for the ACO group; P = .05). Results were published online September 21 in JAMA Internal Medicine.

"These results are consistent with the hypothesis that alternative payment models with global budgets can discourage overuse even while preserving broad provider discretion in determining which services are of low value," the authors write.

Services selected for being classified low-value had to meet three criteria: the service was relevant to the Medicare population, evidence of minimal benefit came before the study period, and there were enough enrollment data to distinguish high-value use from low-value use with reasonable accuracy.

The authors acknowledge a limitation of the study, in that that organizations volunteering for the Pioneer program may have been well positioned to identify and reduce wasteful practices.

Positive Results

Arnold Milstein, MD, MPH, from the Clinical Excellence Research Center in Stanford, California, says in an invited commentary that, "The study adds to a preponderance of positive early ACO results."

He notes, however, that a sustainable reduction in healthcare costs without compromising quality will take more than decreasing low-value services.

"Decreasing spending will also require economically preventing costly health crises and lowering the cost of producing each unit of service," he writes. "For example, Swiss health care professionals have learned to survive on payment for magnetic resonance imaging that is less than one-quarter of what is paid to their US peers."

Although physicians will no doubt rally around preventing costly healthcare crises and cutting down on low-value services, "collaborating with professional managers and systems engineers to lower the cost of producing each unit of service may be an acquired taste," he writes.

The study was supported by the National Institute on Aging, the Laura and John Arnold Foundation, and the National Institute of Mental Health. Dr Schwartz and a coauthor report consulting for the Medicare Payment Advisory Commission on the use of measures of low-value care. Another coauthor reports that he is a partner in VBID Health, LLC, which has a contract with Milliman to develop and market a tool to help insurers and employers quantify spending on low-value services. Dr Milstein has disclosed no relevant financial relationships.

JAMA Internal Medicine. Published online September 21, 2015. Article abstract, Commentary extract


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