Medicare Accountable Care Organizations Reduce Spending on Surgery

Area of Science:

• Healthcare Economics
• Surgical Care Management
• Medicare Policy

Background:

• Surgical care for older adults represents a significant healthcare expenditure.
• Medicare Accountable Care Organizations (ACOs), primarily focused on primary care, may influence surgical spending.
• The study investigates the effect of Medicare ACO participation on surgical care costs.

Purpose of the Study:

• To examine the impact of Medicare ACO alignment on spending for inpatient and outpatient surgical services.
• To quantify the association between ACO participation and surgical care expenditures in fee-for-service Medicare beneficiaries aged 65 and older.

Main Methods:

• Retrospective cohort study utilizing national Medicare claims data from 2008-2015.
• Analysis of a 20% random sample of fee-for-service Medicare beneficiaries aged 65+.
• Multivariable regression models assessed the relationship between ACO alignment and surgical spending.

Main Results:

• ACO alignment was associated with a $181 reduction in annual spending per beneficiary.
• Inpatient surgical episodes decreased by 2.9%, while outpatient episodes increased by 2.3%.
• Average payments for inpatient surgical episodes were $956 lower among ACO-aligned beneficiaries.

Conclusions:

• Medicare ACO alignment is linked to significant savings in surgical care costs.
• Savings are driven by a strategic shift towards outpatient procedures and reduced inpatient utilization and costs.
• Increased focus on surgical care within ACOs can enhance their capacity for healthcare cost containment.