Regional cost and experience, not size or hospital inclusion, helps predict ACO success

Abstract

The Medicare Shared Savings Program (MSSP) continues to expand and now includes 434 accountable care organizations (ACOs) serving more than 7 million beneficiaries. During 2014, 86 of these ACOs earned over $300 million in shared savings payments by promoting higher-quality patient care at a lower cost.Whether organizational characteristics, regional cost of care, or experience in the MSSP are associated with the ability to achieve shared savings remains uncertain.Using financial results from 2013 and 2014, we examined all 339 MSSP ACOs with a 2012, 2013, or 2014 start-date. We used a cross-sectional analysis to examine all ACOs and used a multivariate logistic model to predict probability of achieving shared savings.Experience, as measured by years in the MSSP program, was associated with success and the ability to earn shared savings varied regionally. This variation was strongly associated with differences in regional Medicare fee-for-service per capita costs: ACOs in high cost regions were more likely to earn savings. In the multivariate model, the number of ACO beneficiaries, inclusion of a hospital or involvement of an academic medical center, was not associated with likelihood of earning shared savings, after accounting for regional baseline cost variation.These results suggest ACOs are learning and improving from their experience. Additionally, the results highlight regional differences in ACO success and the strong association with variation in regional per capita costs, which can inform CMS policy to help promote ACO success nationwide.

Figure 1

Performance of accountable care organizations (ACOs) after achieving shared savings or not achieving shared savings. All results shown are from ACOs that initiated operations in 2012 or 2013. ACOs initiating operations in 2014 are not included as they have only completed one performance year.

Figure 2

Percent of ACOs earning shared savings in 2014 by CMS region. This figure shows the regional variation in the percent of ACOs earning shared savings. ACOs operating in more than 1 region were included in the count for each region where their beneficiaries reside. ACO = accountable care organization, CMS = centers for medicare & medicaid services.

Figure 3

Predicted probability of an ACO earning shared savings by FFS per capita cost in geographical area. Predicted probabilities are calculated from a multivariate regression in which the dependent variable is the ability to earn shared savings and the independent variables were FFS per capita cost in the ACO geographical area, number of beneficiaries per ACO, inclusion of a hospital and inclusion of an AMC. Covariates in the model were held at their means. All probabilities shown were statistically significant (P < .01). All 333 ACOs completing performance year 2 were included in the analysis. ACO = accountable care organization, AMC = academic medical center, FFS = fee-for-service.