2015 Medicare ACO Results Reflect the Turning of the Deming Wheel

Guest post by Ken Perez, VP of healthcare policy, Omnicell, Inc.

Ken Perez
Ken Perez

Quality expert W. Edwards Deming was famous for many concepts, including the Deming Wheel or Deming Cycle, more formally known as the PDSA (Plan-Do-Study-Act) Cycle. It is a systematic series of steps for gaining valuable learning and knowledge for the continual improvement of a product or process.

The Centers for Medicare and Medicaid Services’ August 25 release of 2015 quality and financial performance results for Medicare accountable care organizations (ACOs) reflected the application of the PDSA Cycle by the participating organizations as well as CMS in its continued development and refining of its ACO programs.

At a high level, in 2015, the 404 reporting ACOs—392 in the Medicare Shared Savings Program (MSSP) and 12 in the Pioneer ACO Model—achieved $466 million in savings. A bit more than half of the ACOs (210 or 52 percent) held costs below their benchmark, and slightly less than a third (125 or 31 percent) generated savings above a minimum savings rate (MSR) and met quality performance standards, thus meriting shared savings.

As is common with most statistics and especially any material news coming out of Washington, D.C. nowadays, there were widely divergent interpretations of these results.

On the cheery side, CMS chief medical officer Patrick Conway, M.D., rhapsodized, “Accountable Care Organization initiatives in Medicare continue to grow and achieve positive results in providing better care and health outcomes while spending taxpayer dollars more wisely.”

In contrast, Clif Gaus, CEO of the National Association of ACOs, in an email message to FierceHealthcare, struck a negative tone in his appraisal of the results, sharing that his organization “was disappointed not to find stronger financial results that reflect the extensive financial and personal contributions invested by ACOs” and he also said that CMS and Congress must “take swift and decisive action to solidify the foundation of the Medicare ACO program.”

Despite these obviously divergent views, certainly neither Conway nor Gaus would disagree with the idea that the ability to learn is a critical success factor in ACO performance.

A deeper analysis of the data bears this out. As noted by CMS, more-experienced ACOs were more likely to generate savings above their MSR. In performance year 2015, 42 percent of ACOs that started in 2012 generated savings above their MSR. This compares with 37 percent for ACOs starting in 2013, 22 percent for 2014 starters, and 21 percent for 2015 starters.

The value of learning from experience was also reflected in the quality results. MSSP ACOs that reported quality measures in both 2014 and 2015 improved on 84 percent of the measures common to both years.

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