title: Financial and quality impacts of the Medicare physician group practice demonstration.
abstract: OBJECTIVE
  To examine the impact of the Medicare Physician Group Practice (PGP) demonstration on expenditure, utilization, and quality outcomes.
  
  
  METHODS
  Secondary data analysis of 2001-2010 Medicare claims for 1,776,387 person years assigned to the ten participating provider organizations and 1,579,080 person years in the corresponding local comparison groups.
  
  
  METHODS
  We used a pre-post comparison group observational design consisting of four pre-demonstration years (1/01-12/04) and five demonstration years (4/05-3/10). We employed a propensity-weighted difference-in-differences regression model to estimate demonstration effects, adjusting for demographics, health status, geographic area, and secular trends.
  
  
  RESULTS
  The ten demonstration sites combined saved $171 (2.0%) per assigned beneficiary person year (p<0.001) during the five-year demonstration period. Medicare paid performance bonuses to the participating PGPs that averaged $102 per person year. The net savings to the Medicare program were $69 (0.8%) per person year. Demonstration savings were achieved primarily from the inpatient setting. The demonstration improved quality of care as measured by six of seven claims-based process quality indicators.
  
  
  CONCLUSIONS
  The PGP demonstration, which used a payment model similar to the Medicare Accountable Care Organization (ACO) program, resulted in small reductions in Medicare expenditures and inpatient utilization, and improvements in process quality indicators. Judging from this demonstration experience, it is unlikely that Medicare ACOs will initially achieve large savings. Nevertheless, ACOs paid through shared savings may be an important first step toward greater efficiency and quality in the Medicare fee-for-service program.
authors.affiliation: RTI International.
authors.forename: Gregory
authors.initials: G
authors.lastname: Pope
authors.affiliation: RTI International.
authors.forename: John
authors.initials: J
authors.lastname: Kautter
authors.affiliation: RTI International.
authors.forename: Musetta
authors.initials: M
authors.lastname: Leung
authors.affiliation: RTI International.
authors.forename: Michael
authors.initials: M
authors.lastname: Trisolini
authors.affiliation: RTI International.
authors.forename: Walter
authors.initials: W
authors.lastname: Adamache
authors.affiliation: RTI International.
authors.forename: Kevin
authors.initials: K
authors.lastname: Smith
mesh_terms: D060866:Accountable Care Organizations / Q000191:economics*; D017046:Cost Savings / Q000191:economics*; D018588:Fee-for-Service Plans / Q000191:economics*; D006801:Humans; D006278:Medicare / Q000191:economics*; D010820:Physicians / Q000191:economics*; D019984:Quality Indicators, Health Care / Q000191:economics*; D014481:United States
keywords: Medicare Physician Group Practice demonstration; accountable care organization; cost efficiency; quality of care; shared savings