Spending Differences Associated With the Medicare Physician Group Practice Demonstration

Dartmouth Institute for Health Policy and Clinical Practice, Geisel School of Medicine at Dartmouth, 35 Centerra Pkwy, Lebanon, NH 03766, USA.
JAMA The Journal of the American Medical Association (Impact Factor: 35.29). 09/2012; 308(10):1015-23. DOI: 10.1001/2012.jama.10812
Source: PubMed


The Centers for Medicare & Medicaid Services (CMS) recently launched accountable care organization (ACO) programs designed to improve quality and slow cost growth. The ACOs resemble an earlier pilot, the Medicare Physician Group Practice Demonstration (PGPD), in which participating physician groups received bonus payments if they achieved lower cost growth than local controls and met quality targets. Although evidence indicates the PGPD improved quality, uncertainty remains about its effect on costs.
To estimate cost savings associated with the PGPD overall and for beneficiaries dually eligible for Medicare and Medicaid.
Quasi-experimental analyses comparing preintervention (2001-2004) and postintervention (2005-2009) trends in spending of PGPD participants to local control groups. We compared estimates using several alternative approaches to adjust for case mix.
Ten physician groups from across the United States.
The intervention group was composed of fee-for-service Medicare beneficiaries (n = 990,177) receiving care primarily from the physicians in the participating medical groups. Controls were Medicare beneficiaries (n = 7,514,453) from the same regions who received care largely from non-PGPD physicians. Overall, 15% of beneficiaries were dually eligible for Medicare and Medicaid.
Annual spending per Medicare fee-for-service beneficiary.
Annual savings per beneficiary were modest overall (adjusted mean $114, 95% CI, $12-$216). Annual savings were significant in dually eligible beneficiaries (adjusted mean $532, 95% CI, $277-$786), but were not significant among nondually eligible beneficiaries (adjusted mean $59, 95% CI, $166 in savings to $47 in additional spending). The adjusted mean spending reductions were concentrated in acute care (overall, $118, 95% CI, $65-$170; dually eligible: $381, 95% CI, $247-$515; nondually eligible: $85, 95% CI, $32-$138). There was significant variation in savings across practice groups, ranging from an overall mean per-capita annual saving of $866 (95% CI, $815-$918) to an increase in expenditures of $749 (95% CI, $698-$799). Thirty-day medical readmissions decreased overall (-0.67%, 95% CI, -1.11% to -0.23%) and in the dually eligible (-1.07%, 95% CI, -1.73% to -0.41%), while surgical readmissions decreased only for the dually eligible (-2.21%, 95% CI, -3.07% to -1.34%). Estimates were sensitive to the risk-adjustment method.
Substantial PGPD savings achieved by some participating institutions were offset by a lack of saving at other participating institutions. Most of the savings were concentrated among dually eligible beneficiaries.

Download full-text


Available from: Daniel J Gottlieb, Aug 28, 2014
  • Source
    • "Several publicly funded (Medicare and Medicaid) programs have been started, and these have been the focus of the current research.49 Research shows the new programs have reduced costs in some participating institutions and, more generally, for patients eligible for Medicare and Medicaid,50 and has improved quality of care chronic conditions and pediatric care.51 "
    [Show abstract] [Hide abstract]
    ABSTRACT: Increasingly, financial incentives are being used in health care as a result of increasing demand for health care coupled with fiscal pressures. Financial incentive schemes are one approach by which the system may incentivize providers of health care to improve productivity and/or adapt to better quality provision. Pay for performance (P4P) is an example of a financial incentive which seeks to link providers' payments to some measure of performance. This paper provides a discussion of the theoretical underpinnings of P4P, gives an overview of the health P4P evidence base, and provide a detailed case study of a particularly large scheme from the English National Health Service. Lessons are then drawn from the evidence base. Overall, we find that the evidence for the effectiveness of P4P for improving quality of care in primary care is mixed. This is to some extent due to the fact that the P4P schemes used in primary care are also mixed. There are many different schemes that incentivize different aspects of care in different ways and in different settings, making evaluation problematic. The Quality and Outcomes Framework in the United Kingdom is the largest example of P4P in primary care. Evidence suggests incentivized quality initially improved following the introduction of the Quality and Outcomes Framework, but this was short-lived. If P4P in primary care is to have a long-term future, the question about scheme effectiveness (perhaps incorporating the identification and assessment of potential risk factors) needs to be answered robustly. This would require that new schemes be designed from the onset to support their evaluation: control and treatment groups, coupled with before and after data.
    Risk Management and Healthcare Policy 07/2014; 7. DOI:10.2147/RMHP.S46423
  • Source
    • "Indisputable is the fact that, while some of the PGPs achieved substantial savings, other PGPs did not. Most of the savings achieved was found in dual-eligible patients (i.e., patients receiving both Medicare and Medicaid benefits) rather than Medicare-only patients (Colla et al. 2012). All 10 participants in the original PGP Demonstration Project participated in a two-year Transition Demonstration Project, which concluded in December 2012 (Physician Group Practice Transition Demonstration 2012). "
    [Show abstract] [Hide abstract]
    ABSTRACT: Abstract The Physician Group Practice (PGP) Demonstr-ation Project was designed to try to establish whether high-quality healthcare can be delivered to Medicare patients, while simultaneously lowering overall Medicare costs. In this project, participating healthcare organizations were provided a portion of any savings achieved, provided that certain quality goals were also achieved. The results of this project were used to provide evidence as to the feasibility of Accountable Care Organizations (ACOs), a healthcare delivery approach, which is rapidly becoming more prevalent. While the quality measures achieved by the vast majority of participants in the PGP Demonstration Project were widespread, the financial performance of these organizations was quite mixed. Many participating organizations received no shared savings whatsoever, while one received more "shared savings" payment that the others combined. Problems with the evidence supporting PGPs' cost savings are discussed, and, based on these concerns, the future success of ACOs is questioned.
    Hospital Topics 03/2014; 92(1):7-13. DOI:10.1080/00185868.2014.875313
  • Source
    • "25–29 In order to control for this, the number of outpatient visits (primary, secondary, or tertiary care) for the 6 months prior to enrollment also was measured. The presence of high-risk clinical comorbidities also was recorded , as defined by Colla et al in 2012. 30 A diagnosis of diabetes, cancer, chronic obstructive lung disease, dementia , or coronary artery disease was determined by screening of the electronic medical record. "
    [Show abstract] [Hide abstract]
    ABSTRACT: Abstract Depression symptoms contribute to significant morbidity and health care utilization. The aim of this study was to determine the impact of symptom improvement (to remission) on outpatient clinical visits by depressed primary care patients. This study was a retrospective chart review analysis of 1733 primary care patients enrolled into collaborative care management (CCM) or usual care (UC) with 6-month follow-up data. Baseline data (including demographic information, clinical diagnosis, and depression severity) and 6-month follow-up data (Patient Health Questionnaire scores and the number of outpatient visits utilized) were included in the data set. To control for individual patient complexity and pattern of usage, the number of outpatient visits for 6 months prior to enrollment also was measured as was the presence of medical comorbidities. Multiple logistic regression analysis demonstrated that clinical remission at 6 months was an independent predictor of outpatient visit outlier status (>8 visits) (odds ratio [OR] 0.609, confidence interval (CI) 0.460-0.805, P<0.01) when controlling for all other independent variables including enrollment into CCM or UC. The OR of those patients not in remission at 6 months having outpatient visit outlier status was the inverse of this at 1.643 (CI 1.243-2.173). The most predictive variable for determining increased outpatient visit counts after diagnosis of depression was increased outpatient visits prior to diagnosis (OR 4.892, CI 3.655-6.548, P<0.01). In primary care patients treated for depression, successful treatment to remission at 6 months decreased the likelihood of the patient having more than 8 visits during the 6 months after diagnosis. (Population Health Management 2014;17:xxx-xxx).
    Population Health Management 02/2014; 17(3). DOI:10.1089/pop.2013.0057 · 1.51 Impact Factor
Show more