A key government experiment that set out to lower costs and coordinate care for Medicare patients — now the blueprint for an innovation the Obama administration is trying to move to a national scale — has failed to save a substantial amount of money.
The five-year test enlisted 10 leading health systems around the country and offered financial bonuses if they could save enough by treating older patients more efficiently while providing high-quality care.
In 2010, the final year, just four of the 10 sites, all long-established groups run by doctors, slowed their Medicare spending enough to qualify for a bonus, according to an official evaluation not yet made public. Two sites saved enough to get bonuses in all five years, the evaluation shows, but three did not succeed even once.
The uneven progress is significant because the experiment involves “accountable care organizations,” one of the hottest trends in health policy and an idea included in the year-old federal law intended to overhaul the nation’s health-care system.
The law calls for the Medicare program to approve teams of doctors or hospitals to run such organizations — a new twist on the old idea of managed care — starting in January. Although important details differ, the basic contours of the experiment and new ACOs are the same: Medicare shares savings with health organizations if they can treat older Americans for less money and attain specific hallmarks of quality.
What can — and cannot — be accomplished by changing the way Medicare pays for and delivers care is particularly relevant now because the Obama administration proposed rules this spring for groups that want to become ACOs under Medicare. Many health-care providers, including the leaders of all 10 sites in the experiment, are complaining that the rules would to too burdensome.
The experiment began in 2005 under the George W. Bush administration. It offered “performance payments” to participants that met most of 32 measures of quality — half as many as in the proposed rule — and spent at least 2 percent less for Medicare patients, compared with a group of similar Medicare patients outside the experiment who lived nearby.
Despite their spotty financial progress, all 10 medical groups in the experiment met the quality requirements. And the program fostered innovations in care, according to administration officials, outside health policy experts and leaders of the groups.
One of the participants, Wisconsin’s Marshfield Clinic, was by far the biggest winner of bonus payments. According to Theodore A. Paxel, Marshfield’s medical director, the experiment prompted the 95-year-old organization to create a telephone line with nurses available day and night, and half of the people who called last year received enough advice that they did not need to visit a doctor. Marshfield also set up a program for patients with congestive heart failure. Every day, the patients are in touch by telephone with an interactive device that asks them to punch in their weight and answer a few questions. If any of their responses are medically suspicious, someone from the clinic calls right away.
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