Liberals’ Main Medicare Cost-Reduction Strategy Already Proves Ineffective

Kathryn Nix / June 02, 2011

Typically, demonstration programs exist to prove the effectiveness of a reform proposal before implementing it nationwide. This was apparently forgotten in the drafting of Obamacare, which relies heavily on accountable care organizations (ACOs) to curb runaway spending in Medicare and the health care system at large.

Supporters claim ACOs, a form of managed care run by hospitals and physicians, will reduce health care spending and improve quality of care by encouraging better coordination and communication among providers. But the results of a five-year demonstration program show this won’t necessarily be the case.

The demonstration included 10 leading health care systems, which were offered financial incentives to meet quality measures and reduce the cost of treating Medicare patients. Writing for The Washington Post, Amy Goldstein reports:

In 2010, the final year, just four of the 10 sites, all long-established groups run by doctors, slowed their Medicare spending enough to qualify for a bonus, according to an official evaluation not yet made public. Two sites saved enough to get bonuses in all five years, the evaluation shows, but three did not succeed even once. (more…)