Group Practice Demo Achieved Modest Savings

CHICAGO — The Medicare Physician Group Practice Demonstration achieved modest cost savings and quality enhancements in the project's first 2 performance years, researchers reported at the annual research meeting of AcademyHealth. Data released in August reinforce that finding.

The project involves 10 large, geographically diverse physician group practices with a total of 5,000 physicians caring for 200,000 Medicare fee-for-service beneficiaries.

During each year of the project, each group was retroactively assigned a population of Medicare beneficiaries, with an average of 20,000 patients per group (range 10,000-37,000). Each group was held accountable for total Part A and Part B expenditures for these patients.

Patients had complete freedom of choice in providers and were not required to receive care through the participating group practice. However, only patients who received most of their outpatient evaluation and management for the year from the group practice were assigned to the group. Groups that kept increases in expenditures below 2 percentage points of their target growth rate shared up to 80% of the savings; Medicare retained 20%.

"Savings are a function of the ability of the group to control growth in Medicare spending as well as changes in [health] status of their assigned population over time relative to their local market," explained John Pilotte, a senior research analyst at the Centers for Medicare and Medicaid Services.

In the first year of the demonstration, two participating group practices earned a total performance payment of $7.3 million and two lost a total of $1.5 million, Gregory Pope of RTI International in Waltham, Mass., a nonprofit research and development firm working with the CMS, reported at the meeting. In the second year, four groups shared a total payment of $13.8 million and one lost $2 million. Savings to Medicare totaled $677,000 and $1.6 million for the first and second years, respectively.

Results for the third year were announced in August; five physician groups will receive performance payments totaling $25.3 million as part of their share of $32.3 million of savings generated for the Medicare Trust Funds in that year, the CMS announced.

Quality was assessed by the groups' adherence to 27 measures as indicated by Medicare claims and clinical records data. Two group practices complied with 10 of the quality markers in performance year one, while five groups complied with all 27 quality markers in the second year, said Musetta Leung of RTI International.

Second-year performance data indicated significant improvements, she said.

In the third year, all 10 groups achieved benchmark performance on at least 28 of the 32 measures reported, according to the CMS. Two groups achieved benchmark performance on all 32 performance measures.

Over the first 3 years of the demonstration, the physician groups increased their quality scores an average of 10 percentage points on 10 diabetes measures, 11 points on 10 heart failure measures, 6 points on 7 coronary artery disease measures, 10 points on 2 cancer screening measures, and 1 percentage point on 3 hypertension measures.

Additional research is needed to determine the keys to success, according to Mr. Pilotte of the CMS. The group practices generally have sophisticated health information management systems and dedicated information technology leadership, but "even that doesn't seem to be enough to control growth in expenditures.

Joyce Frieden contributed to this report.

CHICAGO — The Medicare Physician Group Practice Demonstration achieved modest cost savings and quality enhancements in the project's first 2 performance years, researchers reported at the annual research meeting of AcademyHealth. Data released in August reinforce that finding.

The project involves 10 large, geographically diverse physician group practices with a total of 5,000 physicians caring for 200,000 Medicare fee-for-service beneficiaries.

During each year of the project, each group was retroactively assigned a population of Medicare beneficiaries, with an average of 20,000 patients per group (range 10,000-37,000). Each group was held accountable for total Part A and Part B expenditures for these patients.

Patients had complete freedom of choice in providers and were not required to receive care through the participating group practice. However, only patients who received most of their outpatient evaluation and management for the year from the group practice were assigned to the group. Groups that kept increases in expenditures below 2 percentage points of their target growth rate shared up to 80% of the savings; Medicare retained 20%.

"Savings are a function of the ability of the group to control growth in Medicare spending as well as changes in [health] status of their assigned population over time relative to their local market," explained John Pilotte, a senior research analyst at the Centers for Medicare and Medicaid Services.

In the first year of the demonstration, two participating group practices earned a total performance payment of $7.3 million and two lost a total of $1.5 million, Gregory Pope of RTI International in Waltham, Mass., a nonprofit research and development firm working with the CMS, reported at the meeting. In the second year, four groups shared a total payment of $13.8 million and one lost $2 million. Savings to Medicare totaled $677,000 and $1.6 million for the first and second years, respectively.

Results for the third year were announced in August; five physician groups will receive performance payments totaling $25.3 million as part of their share of $32.3 million of savings generated for the Medicare Trust Funds in that year, the CMS announced.

Quality was assessed by the groups' adherence to 27 measures as indicated by Medicare claims and clinical records data. Two group practices complied with 10 of the quality markers in performance year one, while five groups complied with all 27 quality markers in the second year, said Musetta Leung of RTI International.

Second-year performance data indicated significant improvements, she said.

In the third year, all 10 groups achieved benchmark performance on at least 28 of the 32 measures reported, according to the CMS. Two groups achieved benchmark performance on all 32 performance measures.

Over the first 3 years of the demonstration, the physician groups increased their quality scores an average of 10 percentage points on 10 diabetes measures, 11 points on 10 heart failure measures, 6 points on 7 coronary artery disease measures, 10 points on 2 cancer screening measures, and 1 percentage point on 3 hypertension measures.

Additional research is needed to determine the keys to success, according to Mr. Pilotte of the CMS. The group practices generally have sophisticated health information management systems and dedicated information technology leadership, but "even that doesn't seem to be enough to control growth in expenditures.

Joyce Frieden contributed to this report.

CHICAGO — The Medicare Physician Group Practice Demonstration achieved modest cost savings and quality enhancements in the project's first 2 performance years, researchers reported at the annual research meeting of AcademyHealth. Data released in August reinforce that finding.

The project involves 10 large, geographically diverse physician group practices with a total of 5,000 physicians caring for 200,000 Medicare fee-for-service beneficiaries.

During each year of the project, each group was retroactively assigned a population of Medicare beneficiaries, with an average of 20,000 patients per group (range 10,000-37,000). Each group was held accountable for total Part A and Part B expenditures for these patients.

Patients had complete freedom of choice in providers and were not required to receive care through the participating group practice. However, only patients who received most of their outpatient evaluation and management for the year from the group practice were assigned to the group. Groups that kept increases in expenditures below 2 percentage points of their target growth rate shared up to 80% of the savings; Medicare retained 20%.

"Savings are a function of the ability of the group to control growth in Medicare spending as well as changes in [health] status of their assigned population over time relative to their local market," explained John Pilotte, a senior research analyst at the Centers for Medicare and Medicaid Services.

In the first year of the demonstration, two participating group practices earned a total performance payment of $7.3 million and two lost a total of $1.5 million, Gregory Pope of RTI International in Waltham, Mass., a nonprofit research and development firm working with the CMS, reported at the meeting. In the second year, four groups shared a total payment of $13.8 million and one lost $2 million. Savings to Medicare totaled $677,000 and $1.6 million for the first and second years, respectively.

Results for the third year were announced in August; five physician groups will receive performance payments totaling $25.3 million as part of their share of $32.3 million of savings generated for the Medicare Trust Funds in that year, the CMS announced.

Quality was assessed by the groups' adherence to 27 measures as indicated by Medicare claims and clinical records data. Two group practices complied with 10 of the quality markers in performance year one, while five groups complied with all 27 quality markers in the second year, said Musetta Leung of RTI International.

Second-year performance data indicated significant improvements, she said.

In the third year, all 10 groups achieved benchmark performance on at least 28 of the 32 measures reported, according to the CMS. Two groups achieved benchmark performance on all 32 performance measures.

Over the first 3 years of the demonstration, the physician groups increased their quality scores an average of 10 percentage points on 10 diabetes measures, 11 points on 10 heart failure measures, 6 points on 7 coronary artery disease measures, 10 points on 2 cancer screening measures, and 1 percentage point on 3 hypertension measures.

Additional research is needed to determine the keys to success, according to Mr. Pilotte of the CMS. The group practices generally have sophisticated health information management systems and dedicated information technology leadership, but "even that doesn't seem to be enough to control growth in expenditures.

Joyce Frieden contributed to this report.