Medicare Spillover Effects from a Commercial ACO

Because there are typically multiple payers for a particular provider’s patient population, there can be spillover effects from the policies of one payer to the others.  An article in the Journal of the American Medical Association explores whether providers who have an accountable care organization arrangement with a commercial payer show any spillover effects to their Medicare beneficiary population.  (JAMA Article)   Spillover effects could be positive or negative.  Better process quality and utilization control in one population might be copied in others, or a loss of revenue might be made up by more utilization in the other populations.  In the research at issue, provider groups in Massachusetts had ACO contracts with the local Blue Cross plan and under those contracts the providers were paid more for hitting quality targets and were at financial risk for global spending.  Early results showed that spending was reduced, particularly in the outpatient categories.  The researchers compared spending and utilization for Medicare beneficiaries served by the 7 provider groups doing the commercial ACO business versus spending and utilization for beneficiaries not served by these providers.  The analysis showed that there was lower spending for the Medicare population served by the providers with ACO contracts, with the savings also concentrated among complex patients and in outpatient categories such as testing, imaging and procedures.  Savings increased in the second year of the study.  There were, however, only minimal improvements in quality of care measures for the Medicare beneficiaries; less so than for the commercial ACO population.  But it is encouraging to see that one large payer who creates incentives for providers to be more cost-conscious can have a broader impact.