Cost saving and quality of care in a pediatric accountable care organization

Abstract

Background and objectives: Accountable care organizations (ACOs) are responsible for costs and quality across a defined population. To succeed, the ACO must improve value by reducing costs while either maintaining or improving the quality of care. We examined changes from 2008 through 2013 in the cost and quality of care for Partners for Kids (PFK), a pediatric ACO serving an Ohio Medicaid population.

Methods: We measured the historical cost of care for PFK and gathered comparison statewide Ohio Medicaid fee-for-service (FFS) and managed care (MC) cost histories. Changes in quality of care measures were assessed by using 15 Agency for Healthcare Research and Quality Pediatric Quality Indicators and 4 indicators targeted by PFK.

Results: PFK per-member-per-month costs were lower in 2008 than either FFS or MC (P < .001) costs and grew at a rate of $2.40 per year compared with FFS increases of $16.15 per year (P < .001) and MC increases of $6.47 per year (P < .121) with ∼3.5 million member-months each year. The quality of care of children in PFK improved significantly (P < .05) in 2011-2013 versus 2008-2010 on 5 quality measures (including 2 composite measures) and declined significantly on 3 measures. Other measures did not change or were rare events with no measureable change.

Conclusions: PFK reduced the growth in costs compared with FFS Medicaid and averages less than MC Medicaid. This slowing in cost growth was achieved without diminishing the overall quality or outcomes of care. PFK thus improved the value of care for Medicaid children.

Keywords: accountable care organizations; health care reform; physician hospital organizations.