skip to main content
Washington State Institute for Public Policy
Back Button

Accountable Care Organizations: (c) Medicare Pioneer ACOs

Healthcare: Healthcare System Efficiency
  Literature review updated November 2015.

Evaluations of health care policies and programs often measure two broad types of outcomes: (1) those that reflect the health status of people (e.g., disease incidence) and (2) those that reflect health care system costs and utilization. Cost and utilization measures may or may not be an indication of health status or well-being.

An Accountable Care Organization (ACO) is a provider group that is responsible for the cost and quality of medical care for a patient population. ACO contracts provide financial incentives for providers to reduce costs and improve the quality of care. In contracts with "upside and downside" financial risk, providers are able to share in savings relative to a spending target but they are required to absorb some of the costs if spending exceeds the target. In contracts with "upside" risk only, providers are not responsible for costs above target. The Centers for Medicare and Medicaid Services have established both types of ACO contracts.

The Medicare Pioneer ACO program was implemented for providers willing to assume both upside and downside financial risk. Pioneer ACOs can receive up to 60% of estimated savings relative to a spending benchmark, contingent upon performance on quality measures.

Thirty-two organizations entered the Pioneer ACO program in 2012, though 13 subsequently withdrew from the program. Studies have examined performance over the first two contract years. The cost reductions presented below do not represent actual savings to Medicare. The estimates do not reflect cost-sharing payments made to providers.
 
ALL
META-ANALYSIS
CITATIONS

*The effect size for this outcome indicates percentage change, not a standardized mean difference effect size.

Meta-analysis is a statistical method to combine the results from separate studies on a program, policy, or topic to estimate its effect on an outcome. WSIPP systematically evaluates all credible evaluations we can locate on each topic. The outcomes measured are the program impacts measured in the research literature (for example, impacts on crime or educational attainment). Treatment N represents the total number of individuals or units in the treatment group across the included studies.

An effect size (ES) is a standard metric that summarizes the degree to which a program or policy affects a measured outcome. If the effect size is positive, the outcome increases. If the effect size is negative, the outcome decreases. See Estimating Program Effects Using Effect Sizes for additional information on how we estimate effect sizes.

The effect size may be adjusted from the unadjusted effect size estimated in the meta-analysis. Historically, WSIPP adjusted effect sizes to some programs based on the methodological characteristics of the study. For programs reviewed in 2024 or later, we do not make additional adjustments, and we use the unadjusted effect size whenever we run a benefit-cost analysis.

Research shows the magnitude of effects may change over time. For those effect sizes, we estimate outcome-based adjustments, which we apply between the first time ES is estimated and the second time ES is estimated. More details about these adjustments can be found in our Technical Documentation.

Meta-Analysis of Program Effects
Outcomes measured No. of effect sizes Treatment N Effect sizes (ES) and standard errors (SE) Unadjusted effect size (random effects model)
ES SE Age ES p-value
Healthcare costs*
Percent change in total medical costs.
0 3 1683614 -0.021 0.010 71 -0.021 0.030
Hospital costs (inpatient)*
Percent change in inpatient hospital costs.
0 3 1683614 -0.025 0.009 71 -0.025 0.004
Hospital costs (outpatient)*
Percent change in outpatient hospital costs.
0 3 1683614 -0.027 0.016 71 -0.027 0.092
Skilled nursing facility costs*
Percent change in total costs accrued during a stay in a skilled nursing facility.
0 3 1683614 -0.019 0.004 71 -0.019 0.001

Citations Used in the Meta-Analysis

McWilliams, J.M., Chernew, M.E., Landon, B.E., & Schwartz, A.L. (2015). Performance differences in year 1 of pioneer accountable care organizations. The New England Journal of Medicine, 372(20), 1927-36.

Nyweide, D.J., Lee, W., Cuerdon, T.T., Pham, H.H., Cox, M., Rajkumar, R., & Conway, P.H. (2015). Association of Pioneer Accountable Care Organizations vs traditional Medicare fee for service with spending, utilization, and patient experience. Jama, 313(21), 2152-61.