Regional cost and experience, not size or hospital inclusion, helps predict ACO success

The Medicare Shared Savings Program (MSSP) continues to expand and now includes 434 accountable care organizations (ACOs) serving more than 7 million beneficiaries. During 2014, 86 of these ACOs earned over $300 million in shared savings payments by promoting higher-quality patient care at a lower cost. Whether organizational characteristics, regional cost of care, or experience in the MSSP are associated with the ability to achieve shared savings remains uncertain. Using financial results from 2013 and 2014, we examined all 339 MSSP ACOs with a 2012, 2013, or 2014 start-date. We used a cross-sectional analysis to examine all ACOs and used a multivariate logistic model to predict probability of achieving shared savings. Experience, as measured by years in the MSSP program, was associated with success and the ability to earn shared savings varied regionally. This variation was strongly associated with differences in regional Medicare fee-for-service per capita costs: ACOs in high cost regions were more likely to earn savings. In the multivariate model, the number of ACO beneficiaries, inclusion of a hospital or involvement of an academic medical center, was not associated with likelihood of earning shared savings, after accounting for regional baseline cost variation. These results suggest ACOs are learning and improving from their experience. Additionally, the results highlight regional differences in ACO success and the strong association with variation in regional per capita costs, which can inform CMS policy to help promote ACO success nationwide.