Obamacare Experiment May Expand After $384 Million in Savings

An Obamacare experiment to lower health-care costs may expand after recording more than $384 million in savings in its first two years, Health & Human Services Secretary Sylvia Mathews Burwell said Monday.

The department is now considering how to broaden the program to other parts of Medicare. The efforts saved about $300 per Medicare beneficiary per year, Burwell said. Known as Pioneer Accountable Care Organizations, the program seeks to reduce spending by better managing care for Medicare patients with chronic diseases such as diabetes.

“An innovative payment model created as a pilot project by the Affordable Care Act generated substantial savings to Medicare,” Burwell said in a speech at the American Hospital Association conference in Washington. “The model has delivered high-quality patient care without limiting coverage or benefits.”

Pioneer is one of the Patient Protection and Affordable Care Act’s experiments in so-called “accountable care,” in which hospitals and doctors are asked to closely monitor their sickest patients and better coordinate their care to reduce wasteful spending. In exchange, the health providers split the financial savings with the government.

The health systems in the Pioneer program agreed to a three-year plan to move from traditional fee-for-service payments, where hospitals charge for every procedure, to a fixed monthly stipend for individual patients.

While the program has been a success for some, since the Pioneer program started in 2012, 13 of 32 organizations that initially joined have exited.

Medicare is the U.S. health program for the elderly and disabled. It covers more than 50 million Americans, according to the Kaiser Family Foundation, and spent $512 billion last year. The Pioneer program manages care for more than 600,000 people.

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