Thursday, August 30, 2018

Was the Medicare Shared Savings Program Successful in 2017?

CMS released the 2017 results for the Medicare Shared Savings Program (MSSP) on August 30, 2018. Here is what they show:

The 472 Accountable Care Organizations (ACOs) in the MSSP spent nearly $1.1 billion less than their “benchmark” spending levels (the amounts CMS projected that it would spend on the ACOs’ patients in the absence of ACO actions).
CMS gave $799 million of the savings back to 162 of the ACOs in shared savings bonuses. 16 Track 2 & 3 ACOs paid penalties to CMS totaling $57 million.
The net result was that CMS saved $313.7 million on the MSSP.

Is $313.7 million a lot of savings? Hardly:

The savings amounted to only $36 for each of the nearly 9 million beneficiaries in the ACO program – that’s what the ACOs would save if half of their patients made one fewer visit to the doctor each year.
The savings amounted to only 0.33% of the total spending of $95 billion in the 472 ACOs – one-third of one percent.
The $314 million in net savings combined with the total of $384 in net losses in the first four years of the program means that CMS has yet to generate a net benefit for the Medicare program after five years of trying.

Did the ACOs that took downside risk produce more savings? No, they actually saved less:

The 39 “downside risk” ACOs only saved an average of $27 per beneficiary (0.24%).
The 433 “upside-only” ACOs saved $37 per beneficiary (0.34%).
The upside only ACOs saved 36% more per beneficiary than the two-sided risk ACOs.
Only 59% of the downside risk ACOs reduced Medicare spending, and 60% of the upside-only ACOs reduced Medicare spending. 41% of the downside risk ACOs actually increased Medicare spending.
The downside risk ACOs spent $254 more in total per beneficiary ($10,933) than the upside-only ACOs did ($10,679) even after they “saved” money for Medicare.
Although the MSSP program didn’t save very much overall, 93% of the savings came from the upside only Track 1 ACOs.

The experience in 2017 indicates that forcing all ACOs to take downside risk would likely produce even less Medicare savings, not more. The path to savings isn’t more risk, but a completely different approach. How to Fix the Medicare Shared Savings Program explains why shared savings, shared risk, and other risk-based population payment systems are unlikely to ever result in significant savings for the Medicare program, and it describes the kind of patient-centered payment system that CMS and other payers should be pursuing instead.