Accountable care organizations (ACOs) appear to lower medical spending, but there is little information on how they do so. We examined the impact of patient participation in a Pioneer ACO and its care management program on rates of emergency department (ED) visits and hospitalizations and on Medicare spending. We used data for the period 2009-14, exploiting naturally staggered program entry to create concurrent controls to help isolate the program effects. The care management program (the ACO's primary intervention) targeted beneficiaries with elevated but modifiable risks for future spending. ACO participation had a modest effect on spending, in line with previous estimates. Participation in the care management program was associated with substantial reductions in rates for hospitalizations and both all and nonemergency ED visits, as well as Medicare spending, when compared to preparticipation levels and to rates and spending for a concurrent sample of beneficiaries who were eligible for but had not yet started the program. Rates of ED visits and hospitalizations were reduced by 6 percent and 8 percent, respectively, and Medicare spending was reduced by 6 percent. Targeting beneficiaries with modifiable high risks and shifting care away from the ED represent viable mechanisms for altering spending within ACOs.
Project HOPE—The People-to-People Health Foundation, Inc.
Accountable Care Organizations; Medicare care management programs; medical spending