As part of President Barack Obama's healthcare
reform law, the efforts center around more than 360 accountable care
organizations (ACOs), which are networks of doctors, hospitals and
other providers specially organized to help move Medicare away from
traditional fee-for-service medicine.
The U.S. Centers for Medicare and Medicaid Services (CMS) said
preliminary data show that the ACOs produced $380 million in savings
vis-a-vis traditional Medicare in 2012 by giving doctors and other
healthcare providers the incentive to focus on improved outcomes for
patients instead of fees from tests and services.
Medicare, the $575 billion government healthcare system for 51
million elderly and disabled beneficiaries, faces growing financial
pressures as a result of America's aging population. A mainstay, the
trust fund that pays for hospitalization, is expected to be
exhausted in 2026.
Deficit hawks view Medicare as a future driver of the federal debt
and have called for major systemic reforms. But the Obama
administration has pursued gradual changes including the reform of
care delivery systems.
So-called fee-for-service medicine is widely viewed as a cause of
rising healthcare costs, because it calls for paying healthcare
providers for tests and services that are sometimes unnecessary.
Obamacare seeks to tackle costs by exploring ACOs and other new
healthcare business models intended to find savings that do not
jeopardize care. A main goal is to generate savings large enough to
be shared between Medicare and providers. But some experts are
skeptical, saying significant cost reductions could be hard to
maintain over time.
But CMS, an agency within the U.S. Department of Health and Human
Services, runs two different ACO programs. In its largest, 54 of 114
ACO networks achieved lower than expected expenditures. But only 29
saw savings big enough to share with providers. All told, the
program produced $128 million in net savings for Medicare's trust
"Overall, the ACO program's a net saver to the
Medicare program," CMS principal deputy administrator Jon Blum told
reporters in a conference call.
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"It's giving us great confidence that this is the right course
for the Medicare program and we are confident that it will continue
to show quality improvement and cost savings."
Officials said the ACOs also achieved a wide range of quality goals.
But CMS released no quality statistics.
Thursday's government release drew some cautious optimism from
the healthcare industry.
"Today's report reflects important steps. More work is needed to
modernize our antiquated Medicare payment system and base payment on
evidence-based quality measures and proven patient outcomes," said
Dr. John Noseworthy, chief executive of the Mayo Clinic in
Rochester, Minnesota, which is not part of the government's program.
"As results of the team-based care models are analyzed, those most
effective in driving down health care costs without compromising
safety and quality should become part of the healthcare system," he
(Reporting by David Morgan; editing by Chizu Nomiyama)
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