Medicare pays on average more than $10,000 per patient per year. Another flavor of the ACO program, designed to make hospitals share more risk for patient outcomes, saw 13 of 32 participants exit.
The bundled-payments experiment started in early 2013. It has even more limited results than the ACO approach. The first analysis of Medicare’s bundled payment program, published last month, was based on just 15 providers. The review found that “the small sample sizes and early experience preclude drawing conclusions,” though the preliminary results suggest that the model may affect the way doctors and hospitals deliver care.
For example, patients spent less time in nursing homes after a hospital stay and more time with home-health aides, a lower-cost way to care for convalescents.
The consulting firm Lewin Group, which evaluated the policy for the administration, noted that next year it will have more data on how bundled payments work, allowing for “more statistically powerful results.”
The White House doesn’t have time to wait. Medicare's commitment to payment reform was meant to signal to hospitals and private health insurers that the days of the old system were numbered, said Farzad Mostashari, chief executive officer of Aledade, a company that helps independent doctors create and manage ACOs. (He also worked in the Obama administration, leading the effort to digitize patient records.)
The administration had to turn to the new models at hand to demonstrate a commitment to change. “Look, the cupboard’s kind of bare,” Mostashari said. "It’s not like there’s 25 different programs poised to grow by millions of patients a year.”
While the evidence to support the new payment models may not yet be clear, and their effect won't be clear for years, the problems with the existing system are, he said.
"What we have abundant evidence of is that fee-for-service is horrible," Mostashari said, "and having a really toxic effect on cost and quality and safety."