New Study: Original ACOs Decreased Post-Acute Care Spending, Savings Increase Over Time

Accountable care organizations (ACOs) that started in 2012 – the first year of the Medicare Shared Savings Program (MSSP) – decreased their post-acute care spending by a 9 percent differential reduction in two years without compromising care quality. In dollars, that 9 percent comes to $106 per beneficiary.

That’s the finding of a recent JAMA Internal Medicine report. Researchers reviewed Medicare claims from 2009 to 2014 and found that the overall lower post-acute care spending was due to decreases in length of stay at skilled nursing facilities (SNF).

“Post acute is the fastest growing segment of healthcare services, so clearly a focus there is essential in controlling cost. It also accounts for around 70 percent of Medicare’s variability. So, given that, ensuring that patients are getting the right post-acute care in the right amount of time is critically important to making sure that patients have the best outcome and are given care under appropriate costs,” said Saqib Akhter, CEO of Post Acute Analytics, a company that helps health systems and providers monitor their patients in real time outside their four walls

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The JAMA report results indicated that ACO financial incentives motivated providers to improve care delivery while reducing costs. It also found that organizations that participated in ACOs for a longer period of time experienced substantially greater post-acute care savings each year.

Compared to the non-MSSP ACO control group, the 2012 MSSPs saw:

  • A 0.6 percentage point decrease in the proportion of patients discharged to skilled nursing facilities by 2014
  • A decrease in the length of skilled nursing facility stays by 0.60 days per stay from 2012 to 2014
  • Home health spending in the outpatient setting lowered by $16 per beneficiary by 2014
  • Total annual inpatient spending reductions of $77 per beneficiary

“We are seeing very similar and, in many cases, stronger outcomes across our clients that include not only ACOs but also bundles, managed care companies, and capitated arrangements,” said Akhter.

“Real time monitoring of patients has been a key catalyst to enabling our clients to proactively manage total cost of care and patient outcomes.”

This JAMA study further showed that skilled nursing facilities adapted to the requirements of the ACOs. The majority of the SNF savings resulted from care changes for ACO patients as opposed to ACOs changing the SNFs within their network. The organizations reported a $393 reduction per stay in the same period.

Perhaps most interesting is that researchers found that the savings in the first year of the program were significantly lower than in the second year, and that the post-acute care savings increased the longer an organization participates in MSSP. For example, in 2014:

  • A 2013 MSSP entry ACO reduced skilled nursing facility spending by an average of $27 per beneficiary
  • Whereas a 2014 MSSP entry ACO only lowered SNF spending by $4 per beneficiary

For inpatient spending, in 2014:

  • 2012 MSSP entry ACOs realized inpatient savings of $77 per beneficiary
  • 2013 MSSP saw $33 savings per beneficiary
  • 2014 MSSP saw $8 savings per beneficiary

According to the report, “Consistent with changes in total Medicare spending associated with participation in the MSSP, reductions in SNF spending grew with longer ACO participation, and later entrants required more time to achieve reductions than did early entrants.”

“Post Acute Analytics can accelerate the change by putting in the infrastructure to manage post acute costs,” said Akhter. “We can stand up a solution in less than 90 days and give health systems the tools to start monitoring their patients in real time and placing them in the appropriate care setting for the right amount of time. We have modules that can be phased in and be added overtime to ensure that the implementation is smooth and fits into their workflow. Most importantly, we start to add value on day one.”

The research also found that MSSP participation did not result in significant changes in mortality and 30-day readmissions rates. This means that participation did not have a negative impact on care quality.

Study results also indicate that healthcare organizations do not need to make acquisitions of post-acute facilities to achieve care savings.

“Our findings also challenge claims by leaders of health care provider organizations that mergers and acquisitions involving acute care or post-acute care facilities are necessary for achieving more efficient post-acute care under new payment models,” according to the report.

“More generally, the ability of ACOs to curb post-acute care spending exemplifies the potential for healthcare professionals to influence care across multiple settings without necessarily establishing common ownership over the full continuum of care, as few ACOs own SNFs.”

“We agree with this statement,” said Akhter. “The majority of health systems and payers don’t own substantial post-acute assets to create a vertically integrated system. Nor do we think it is efficient use of capital.  We have demonstrated that insights providing real-time transparency on patient progress, cost of care, and network performance can achieve the intended impact of succeeding in risk base contracts.”

To be truly successful, ACOs will always need a deep understanding of their patients across the entire healthcare continuum and real-time insights to impact patient quality over the entire healthcare episode.

“The first thing a provider needs to know is if and when a patient lands in a post-acute setting,” said Akhter. “You need to know that immediately. Second, you want to be able to track their progress in the post-acute setting – and be able to intervene in real time. Third, you want to know where they are going from that post-acute setting. Because you want to make sure they are going to the most appropriate setting and being discharged safely.

“Additionally, all of this information has to be completely automated. No one in healthcare has time for manual data entry. It also needs to be intuitive and actionable, so providers know within seconds which patients need attention. These are services that Post Acute Analytics provides, and our solution is inobtrusive and will not interfere with the care that is provided to patients.”

Learn more about how Post Acute Analytics can help you manage outcomes while controlling costs.

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