Medicare Shared Savings Program: Outcomes from the First Four Years

February 21, 2018

In two original articles published in the American Journal of Accountable Care, the Duke-Margolis Center for Health Policy and Leavitt Partners examine quality improvements and cost savings in the first four years of the Medicare Shared Savings Program (MSSP), and suggest opportunities for system-wide improvement.

The authors examined outcomes for ACOs over time using the first four years of MSSP performance data (2013 through 2016) linked to ACO data from Leavitt Partners with the goal of answering two questions: what are patterns and causes of ACO quality measure change over time? And how did ACOs change their spending patterns across different sites of care over time, and did those changes improve their savings rate?

The first study, which focuses on MSSP quality improvement, found that:

  • ACO quality is broadly improving (on average)
  • ACOs rapidly grew in the first three years before plateauing. While larger ACOs demonstrated higher average quality, small decreases in quality, particularly related to caring for at-risk populations, occurred as ACOs grew
  • Expenditures for post-acute care increased in year 1 but then decreased thereafter, on average. Decreased post-acute care expenditure was associated with improved quality in preventable admissions and re-admissions

The findings above varied by key organizational and market traits. For example, physician-led ACOs were more sensitive to quality dips when growing in size, but hospital-led ACOs were more sensitive to quality change due to changing post-acute care expenditure.

“The findings from this study highlight three opportunities to maximize quality improvement in the MSSP ACO model: we need continued infrastructure development funding for ACOs to grow and overcome startup costs without risk of quality dips and consolidation, ACOs need to develop more coordinated relationships with post-acute care facilities, and there are opportunities for diverse ACOs to share their experiences and learnings,” said lead author William K. Bleser, PhD, MSPH of the Duke-Margolis Center for Health Policy.

The second study, which focused on MSSP spending patterns and savings, found that:

  • Financial savings in ACOs were associated with less spending on inpatient and skilled nursing facility care and more spending on outpatient physician services
  • Expenditures on physician services increased each year
  • Inpatient spending among ACOs decreased as a percentage of total spending from 2013 to 2016

“Our findings show that MSSP ACOs increased their savings rate by reapportioning money to different, lower-cost sites of care.” Remarked David Muhlestein, PhD, JD, chief research officer of Leavitt Partners. “Sustainable changes to our health care system require more than just paying differently for care, but also delivering care in a different way, including prioritizing lower-acuity, lower-cost settings."

The collaborators discuss how additional quality improvement and cost savings may be attainable and are important for ACOs’ continued efforts to meet the stated goals of the MSSP:

“The potential for success we’re seeing is particularly encouraging given that the Medicare population is primarily older and with more chronic conditions, and that many MSSP ACOs were in one-sided risk arrangements. This suggests more success could be generated in other populations and settings – public and private – and by moving ACOs into more advanced risk-sharing,” said co-author Mark B. McClellan, MD, PhD, director of the Duke-Margolis Center for Health Policy.