This week in the New England Journal of Medicine, researchers reported a new retrospective analysis of Pioneer ACO performance in year one. Researchers compared total quarterly Medicare spending and certain quality measures from the pre-ACO period (2008-2011) to the first year of Pioneer operations. A control group of non-participating Medicare recipients was used in their model. Researchers found that spending was $29.20 lower per member per quarter in the Pioneer group compared with controls, or about a 1.2 percent savings.

ACOs that had higher baseline spending had greater reductions in spending than did those with lower baseline spending (as one would expect). However, savings were unrelated to withdrawal from the Pioneer program, and savings were similar among ACOs that were financially integrated between hospital and physician groups and those that were not. There was little to no change on quality measures.

Our Take: Last week CMS published its estimated savings for the first two years of Pioneer operations, which we compared to its previously published estimate. CMS said the Pioneer pilot program saved $279.7 million in year one and $104.5 million in year two, for a total of $284.2 million. In the NEJM article, the authors extrapolated that Medicare spending was about $118 million, or $161 million less than last week’s estimate. These researchers came closer to CMS’ estimate published in October last year, which as we reported last week was calculated at $147 million in savings.

The authors point out that Medicare still came out ahead: their calculated savings exceeded $72 million in bonuses to Pioneer ACOs in 2012 by $42 million.

A more detailed and thorough treatment on the issue of performance will be included in our updated ACO market intelligence report in June.

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