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Considerable Variation Seen for Medicare Cost-Saving Program

Last Updated: September 12, 2012.

There is substantial variation in the savings achieved for practice groups involved in the Medicare Physician Group Practice Demonstration program, designed to improve quality and slow cost growth, according to a study published in the Sept. 12 issue of the Journal of the American Medical Association.

WEDNESDAY, Sept. 12 (HealthDay News) -- There is substantial variation in the savings achieved for practice groups involved in the Medicare Physician Group Practice Demonstration (PGPD) program, designed to improve quality and slow cost growth, according to a study published in the Sept. 12 issue of the Journal of the American Medical Association.

Carrie H. Colla, Ph.D., from the Geisel School of Medicine at Dartmouth in Lebanon, N.H., and colleagues estimated the cost savings associated with PGPD using data from participants in 10 physician groups. The intervention group included 990,177 Medicare beneficiaries receiving primary care from physicians in the participating medical groups, and they were compared with 7,514,453 controls from the same regions who received care from non-PGPD physicians. Fifteen percent of beneficiaries were eligible for both Medicare and Medicaid.

The researchers found that annual savings per beneficiary were modest overall (adjusted mean, $114). The annual savings were significant for dually eligible beneficiaries (adjusted mean, $532), but not for non-dually eligible beneficiaries (adjusted mean, $59). The reductions were concentrated in acute care (overall, $118; dually eligible participants, $381; non-dually eligible participants, $85). Across practice groups there was significant variation in the saving, ranging from a saving of $866 to increased expenditure of $749 per-capita annually.

"The remarkable degree of heterogeneity across participating sites underscores the importance of timely evaluation of current payment reforms and a better understanding of the institutional factors that lead to either success or failure in effecting changes in health care practices," the authors write.

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