Medicare Experiment Fails to Save Money Expected

An experiment designed to lower costs and coordinate care for those on Medicare has failed to save the amounts of money expected. The experiment forms the base of a plan the Obama administration hoped to take nationwide as part of Obamacare, The Washington Post reported.

The five-year test offered financial bonuses to 10 healthcare systems if they could save money in treating the elderly while still proving a high level of care. In the final year of the study, only four of the 10 saved enough money to qualify for a bonus, two sites cut cost enough to get bonuses all five years, and three never qualified for a bonus, the Post reported.

The experiment involved accountable care organizations (ACO), which is a key part of Obamacare. Under the year-old healthcare law, Medicare must start approving such groups in January. Although there are differences between the groups in the experiment and ACOs, the theory is the same: If healthcare groups can save money in treatment and retain quality, Medicare shares any savings, the Post reported.

The experiment began in 2005 under the George W. Bush administration and ended in 2010. The bonuses came if spending could be cut by at least 2 percent and retain quality as judged by 32 measures. All 10 medical groups met the quality requirements.

Innovations created under the program include round-the-clock telephone access to nurses that cut down on doctor visits and a call-line for heart patients, the Post reported.

Gail Wilensky, who was President George H.W. Bush’s head of Medicare and Medicaid, told the Post that the experiment’s results suggest that the idea may not be ready to go nationwide, adding, “If it was this tough for this group that I had just assumed would be hands-down winners, what does it say for groups that don’t have a long history of coming together?”