HealthDay News — Early accountable care organization (ACO) initiatives correlate with lower spending for elderly Medicare beneficiaries, but not necessarily with improved quality, study results indicate.

Massachusetts providers that participated in the Alternative Quality Contract (AQC), an early commercial accountable care organization initiative backed by Blue Cross Blue Shield, reduced spending on Medicare beneficiaries 3.4% after 2 years compared with enrollee costs at nonparticipating providers, J. Michael McWilliams, MD, PhD, from Harvard Medical School in Boston, and colleagues reported in the Journal of the American Medical Association.

McWilliams and colleagues compared Medicare enrollees served by 11 provider groups in the AQC from 2007 to 2010 with Medicare patients served by non-AQC providers. The study looked at quarterly medical spending and five quality measures, such as avoidable hospitalizations and 30-day readmissions. 

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Before entering the AQC the total quarterly spending per beneficiary was $150 higher for the intervention group than for the control group, with spending in both groups increasing at a similar rate, the researchers found.

Savings in year one were not significant (P=0.18), but in year two they were mainly obtained from lower spending on outpatient services such as office visits, ED visits, minor procedures, imaging and lab tests.

During year two, the difference in spending between the two groups was reduced to $51, constituting a significant 3.4% savings (P=0.02) relative to the expected quarterly mean of $2,895. Savings were greater for beneficiaries with five or more conditions (P=0.002).

Improvements were seen in annual rates of low-density lipoprotein cholesterol testing for beneficiaries with diabetes and for those with cardiovascular disease; however, performance on most quality measures did not change differentially.


  1. McWilliam JM et al. JAMA 2013; 310(8):829-836.