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Jury Still Out on the Medicare Experiment

The introduction of President Barack Obama’s healthcare reform was met with much debate and has resulted in many heated exchanges between proponents and critics. Now the law has been passed, experts have been analyzing the effectiveness of all aspects of the system to determine how effective and efficient the healthcare program has been. So far early analyses have produced highly mixed results.

The theory is that Accountable Care Organizations (ACOs) – groups of doctors/hospitals and health care providers that give their time to Medicare voluntarily – will be able to offer coordinated care for patients and by doing so make savings in operation costs, prevent unnecessary treatments from being performed and ensure that patients do not experience a fall in the standard of care provided.

It has not all been plain sailing as some medical institutions refused to join the Center for Medicare & Medicaid Services’ Pioneer ACO program and many who did agree have already pulled out. There are just 19 of the 32 participants still in the program. The Mayo Clinic and Cleveland Clinic were two important hospital systems that did not participate.

The system offered bonus payments for participants, but while 28 out of the 33 different quality measures showed an improvement – saving Medicare $41 million – the bonus payments were only issued to 11 organizations; approximately a third of the participants. Two thirds failed to save sufficient dollars in running costs to qualify for the bonus. The Medicare Shared Savings Program was more successful in another program with fewer restrictions and showed an improvement on 30 of the 33 quality measures and operated with 220 participants.

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One issue raised is whether participants would have raised standards anyway, even if they were not operating under the ACO model and that it is difficult to accurately assess how well the system is working. The restrictions placed on organizations to follow the ACO model in order to participate in the program has also come under criticism, with calls for experiments to be conducted on private health care companies to determine if the system really does stand a chance of succeeding.

Author: Steve Alder is the editor-in-chief of HIPAA Journal. Steve is responsible for editorial policy regarding the topics covered on HIPAA Journal. He is a specialist on healthcare industry legal and regulatory affairs, and has several years of experience writing about HIPAA and other related legal topics. Steve has developed a deep understanding of regulatory issues surrounding the use of information technology in the healthcare industry and has written hundreds of articles on HIPAA-related topics.