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New Analysis in Health Affairs Article Finds ACO Savings Difficult to Achieve Without IT

October 4, 2012
by Mark Hagland
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A new study finds that, without strategic IT and care coordination, ACOs might not save much money

A study by David M. Eddy, M.D. and Roshan Shah that was published online in Health Affairs on Oct. 3 found that the strategic use of information technology and the use of care coordination will be necessary in order to achieve sustained performance gains in accountable care organizations.

Indeed, Eddy and Shah state in “A Simulation Shows Limited Savings From Meeting Quality Targets Under The Medicare Shared Savings Program,” which also appears in the October print issue of Health Affairs, that “We found that a ten-percentage-point improvement in performance on diabetes quality measures would reduce Medicare costs only by up to about 1 percent.” What’s more, the authors say in the abstract to their study, “After the costs of performance improvement, such as additional tests or visits, are accounted for, the savings would decrease or become cost increases. To achieve greater savings, accountable care organizations will have to lower costs by other means, such as through improved use of information technology and care coordination.”

Eddy and Shah used a simulation model to analyze the effects of the Medicare Shared Savings Program quality measures and performance targets on Medicare costs in a simulated population of patients aged 65 to 75 with type 2 diabetes.

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