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New results: Michigan-wide effort saved Medicare money while taking better care of patients

Initial results show potential of POM ACO's physician-led model

ANN ARBOR, Mich. — Two years ago, more than 1,800 doctors from around Michigan joined together to improve the care of 80,000 people who rely on Medicare, while also slowing the growth of their health costs.

Data released yesterday show they achieved much of their aim in just the first year, though more opportunities remain to improve care and contain costs further.

The data, from the federal agency that oversees the Medicare system, shows that the Michigan initiative saved the traditional Medicare system $4.7 million in calendar year 2013, while simultaneously improving patients’ ratings of their care and their doctor, control of conditions such as high blood pressure and diabetes.

The initiative, called POM ACO or the Physician Organization of Michigan ACO, LLC, was founded as a joint venture of the University of Michigan Health System and six physicians groups around the Lower Peninsula of the state.

POM ACO gained steam earlier this year, as 2,900 other health care providers joined – including more than 1,700 U-M Medical School faculty physicians. Now, POM ACO is responsible for improving the care of more than 120,000 Michiganders with traditional Medicare coverage.

POM ACO is an accountable care organization, or ACO, under the Medicare Shared Savings Program of the Centers for Medicare and Medicaid Services. CMS released results from all 220 MSSP ACOs in the country simultaneously. Of them, 53 saved enough money to qualify to share in the savings; POM ACO did not achieve this goal but was one of 52 ACOs that did save Medicare money through better care coordination and quality.

One of the largest ACOs in the country, POM ACO focuses on the triple aim of better care for patients, better health for entire populations, and lower health care costs.

The new results show it that in a year when national spending on traditional Medicare increased by one-half of a percentage point, POM ACO was able to save money – specifically, 0.7 percentage points on total spending of $685 million.

POM ACO did not reach the 2 percent cost savings threshold for sharing in savings. The effort’s leaders note that POM ACO is already working to do more to achieve the triple aim for participating patients, and will focus improvement efforts in coming months.

In 2013, POM ACO’s participating providers were drawn from the U-M Health System, Advantage Health/Saint Mary's Care Network, Crawford Mercy Physician Hospital Organization, Lakeshore Health Network, Oakland Southfield Physicians, Olympia Medical Services, Physicians’ Organization of Western Michigan (POWM), United Physicians and Wexford Physician Hospital Organization.

In 2014, they were joined by the rest of U-M’s faculty physicians and other U-M providers, and physicians from the Huron Valley Physicians Association (HVPA), the IHA physician group, and the MidMichigan Collaborative Care Organization.

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