Study Finds ACOs Cut Medical Costs Without Increasing Drug Costs

According to a study by researchers at the University of Pittsburgh Graduate School of Public Health, accountable care organizations (ACOs) helped reduce Medicare medical costs without increasing prescription drug spending.  This analysis was the first to look at how the ACO model affected Medicare Part D drug spending in 2012, which was the first year that ACOs were in place. The study was a comparison of Medicare Part D beneficiaries participating in an ACO in 2012 with a random sample of those who were not participating in an ACO.

The study focused on the per person total annual Part D spending, total 30-day prescription drug counts, the percentage of brand-name drugs, and total annual hospital and medical spending through Medicare Parts A and B, including all non-drug claims. For the purposes of the study, there were 316,366 Medicare Part D beneficiaries using an ACO, and 559,241 Medicare Part D beneficiaries not using an ACO.

On average, ACOs helped save about $345 per person in Medicare costs during the first year. Those who participated in an ACO saw no major changes in their drug spending, the total number of prescriptions filled, or the percentage of Medicare claims for brand-name drugs. The beneficiaries with Medicare Part D prescription drug coverage and who had six or more chronic medical conditions saw the most savings on medical costs, or $966 per patient in 2012. Given this information, researchers now plan to look at the outcomes of beneficiaries in ACOs and those who are not in ACOs, in terms of prescribed medications and adherence to those prescriptions.

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