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Informing Policy. Advancing Health.

New Savings from the Accountable Care Collaborative: A Drop in the Bucket, But a Drop Nonetheless

Amid the recent clamor around Obamacare’s malfunctioning website and dropped insurance plans, it’s easy to lose sight of the Colorado health initiatives that predate national health reform.

On November 4, the State of Colorado announced that one of these initiatives – the Medicaid Accountable Care Collaborative (ACC) – grossed $44 million in savings or avoided cost during the 2012-13 fiscal year. The net savings after accounting for program costs were a more modest $6 million.

The state said that the net savings from the ACC more than doubled from the $3 million posted during the first year. The number of Coloradans enrolled in June 2013 was 352,236, up 166 percent from 132,227 as of June 2012.

The report also indicated that three closely monitored metrics – emergency department use, hospital readmissions and the use of imaging services such as MRIs – were trending downward, or at least not growing as fast as traditional Medicaid. The changes observed for Coloradans enrolled in the ACC were:

  • A 1.9 percent increase in use of the emergency department compared to a 2.8 percent increase among those enrolled in traditional Medicaid.
  • A 25 percent reduction in high-cost imaging.
  • At least 15 percent fewer hospital readmissions than expected each month.

Although the report received little fanfare and was short on detail, the fact that the ACC achieved savings is critical to its success.

The idea behind the program is that costs can be contained and the health of Medicaid enrollees improved by ensuring that they have access to coordinated care. In other words, care is coordinated between providers, which cuts down on unnecessary and duplicative services. Also the patient has a place where he or she usually goes for basic and preventive care called a “medical home.” Having this usual source of care allows the patient to build a relationship with the provider, with the goal of keeping people healthier and reducing the need for more expensive care down the road.

On the other side of the balance sheet, primary care practices, clinics and regional entities called Regional Care Collaborative Organizations (RCCOs) receive incentive payments for decreasing emergency department use, hospital readmissions and use of imaging services. The report indicates that $27 million was paid to RCCOs, with $689,000 of that in incentive payments. Primary care providers received $489,000 in incentive payments out of a total of $6 million in payments. Three million dollars of funding was allocated for the program’s data requirements.

The net $6 million in savings is a drop in the bucket compared to Colorado Medicaid’s $7.5 billion budget, although it is a step in the right direction. The Colorado Health Institute will continue to monitor this program closely through our series of learning labs focused on the ACC.