How Do Medicare Beneficiaries With Cancer Fare in ACOs?

The use of accountable care organizations (ACOs) among the Medicare population is growing in use. How well beneficiaries with high-risk, high cost conditions such as cancer, will fare under an ACO have not been determined, but a new study from the Dartmouth Institute for Health Policy and Clinical Practice suggests the possibility of significant reduction in Medicare spending.

Carrie H. Colla, PhD, an assistant Professor at the Dartmouth Institute for Health Policy and Clinical Practice of Dartmouth University, and colleagues examined the Medicare Physician Group Practice Demonstration (PGPD) that took place from 2005 to 2010 with 10 participating physician groups. The researchers compared beneficiaries at sites before and during the demonstration period. They also compared local control groups receiving care from non-demonstration providers. Overall payments were compared and payments were broken down into separate categories. Some patient experience outcomes were also reviewed, such as mortality and use of hospice services.

The researchers conducted a regression analysis and determined that Medicare spending was reduced by $721 annually per cancer patient across the sites, or an annual 3.9% reduction in payments per beneficiary.

The reduction in spending was most concentrated in acute care payments. The researchers note that this reduction was also seen in another study among dual eligible beneficiaries—another high-risk, high-cost population. Utilization patterns were also affected by the demonstration project, with significant decreases in hospital discharges. The project did not reduce the number of deaths occurring in the acute care hospital, did not increase referral to hospice, and did not increase the number of days in hospice care. Researchers also identified a small decrease in the number of ICU days and a reduction in the hospitalization rate, and an improvement in mortality.

The researchers noted that the demonstration project is only comprised of 10 participating sites. It is unclear how the sites differ from others on other characteristics not examined in this study. They note, however, that their results “are likely relevant for understanding how Medicare ACO programs may impact cancer care.”

The findings have implications on how policymakers and insurers design ACO programs and how ACO provider organizations respond to payment reform. The success of these reforms depends on how well high-cost, high-risk patients—such as patients with cancer—respond to and adjust within ACOs. Oncologists will play a vital role in decisions affecting spending and should be considered partners in ACO programs, said the researchers.