Long-Term Spending of Accountable Care Organizations in the Medicare Shared Savings Program

Evidence from initial cohorts of accountable care organizations (ACOs) participating in the Medicare Shared Savings Program (MSSP) found modest reductions in health care spending. Little is known about whether these effects have changed over time.

To determine long-term changes in spending for MSSP ACO participants.

Using 2010 to 2019 traditional Medicare data, difference-in-differences analyses were performed to compare spending changes for patients attributed to ACOs relative to changes for patients at non-ACO organizations. Outcomes included total Medicare spending and spending by category. Three- and 6-year effects and estimated differential changes overall and by ACO characteristics were calculated, including size (small defined as <10 000 patients), rurality, and whether an ACO included a hospital (hospital-associated ACO) or not (physician-group ACO).

Attribution to a medical group or clinic in an ACO during the first 2 years of ACO tenure.

Total annual per-patient Medicare spending.

The sample included 41 973 272 Medicare patient-years. Baseline characteristics for 2 719 406 ACO patients and 5 523 652 control patients were similar (average age, 72 years; 58% female; and 82% to 84% White) prior to ACO formation in 2010 and 2011, and unadjusted annual per-patient spending was slightly lower in the ACO group vs control group ($12 147 vs $12 318; difference, -$171 [95% CI, -$223 to -$118]) in the 2 years prior to ACO formation. ACO formation was associated with a mean differential reduction of $142 (95% CI, -$193 to -$92) in annual per-patient spending over 3 years and $294 (95% CI, -$347 to -$241) over 6 years. Spending reductions associated with ACO formation increased over time: compared with control patients, ACO patients experienced a mean reduction of $234 (95% CI, -$298 to -$171) in year 3 and $584 (95% CI, -$680 to -$489) in year 6. Physician-group and small ACOs generated larger spending reductions. Spending changes resulted in $4.1 billion to $8.1 billion in savings to Medicare between 2012 and 2019.

During the MSSP's first decade, ACOs generated meaningful reductions in spending, with larger effects over time.