Amidst the national discussion over the implementation of the Patient Protection and Affordable Care Act (PPACA), the Centers for Medicare and Medicaid Services (CMS) recently reported early results of the Pioneer accountable care organization (ACO) model. Separate from but complementary to the Medicare Shared Savings Program (SSP) and other ACO initiatives, the Pioneer ACO model was specifically designed by CMS for organizations experienced in coordinated care and risk-sharing. As a result, the 32 health systems participating in the Pioneer ACO program were selected by CMS for their potential to demonstrate and prove the ACO concept.

The ACO concept garners controversy in healthcare circles, depending, it seems, upon one's perspective. Some argue that any savings and improvements achieved by ACOs will be short-lived, while others contend that ACOs will go the way of the dodo bird -- likening it to the unrealized promise of managed care from the 1990s. At the same time, since the passage of PPACA in early 2010, 425 public and private market ACOs reportedly exist in operation nationally. So the broad spectrum of shared savings approaches central to the ACO model were adopted within a short three years in a manner that has penetrated far beyond the Medicare program initiatives found within PPACA.

Highlights of the results from the first performance year of the Pioneer ACO model include the following:

  • All 32 participating health systems were able to show improved patient care related to quality and patient satisfaction benchmarks, specifically with respect to cancer screenings and controlling blood pressure.
  • Only 18 of the 32 health systems lowered costs for the Medicare patients they treated.
  • Thirteen systems saved enough to share savings with the Medicare program.
  • Two systems cost Medicare more and reportedly may owe $4 million back to the program.
  • Savings totaled $140 million, $76 million of which will be returned to the Pioneer ACOs as their portion of the shared savings. A net savings of $33 million will be returned to the Medicare trust funds.
  • Nine Pioneer ACOs -- Prime Care Medical Network, Inc.; University of Michigan Health System; Physician Health Partners LLC; Seton Health Alliance; Plus ACO (North Texas Specialty Physicians and Texas Health Resources); Healthcare Partners Nevada ACO LLC; Healthcare Partners California ACO LLC; JSA Care Partners LLC; and Presbyterian Healthcare Services -- will be leaving the program. Seven have opted to participate in the SSP while two will leave the program altogether.

The early results from the Pioneer ACO program show that a majority of participating health systems indicated improvement in care delivery and promise in the area of cost savings, including the ability to participate in those cost savings. Although the jury is out as to whether ACOs will be able to secure lasting improvements in cost, quality and population health objectives, the early results are a cause for optimism. At a minimum, the ability of providers to attain some level of budget certainty and positive improvement in the benchmarks required suggests that movement in this general direction should be sustained. Ensuring that this effort does not adversely impact provider long-term viability in the process is the challenge that confronts us.