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To evaluate whether hospital participation in accountable care organizations (ACOs) is associated with reduced Medicare spending for inpatient surgery.ACOs have proliferated rapidly and now cover more than 32 million Americans. Medicare Shared Savings Program (MSSP) ACOs have shown modest success in reducing medical spending. Whether they have reduced surgical spending remains unknown.We used 100% Medicare claims from 2010 to 2014 for patients aged 65 to 99 years undergoing 6 common elective surgical procedures [abdominal aortic aneurysm (AAA) repair, colectomy, coronary artery bypass grafting (CABG), hip or knee replacement, or lung resection]. We compared total Medicare payments for 30-day surgical episodes, payments for individual components of care (index hospitalization, readmissions, physician services, and postacute care), and clinical outcomes for patients treated at MSSP ACO hospitals versus matched controls at non-ACO hospitals. We accounted for preexisting trends independent of ACO participation using a difference-in-differences approach.Among 341,675 patients at 427 ACO hospitals and 1,024,090 matched controls at 1531 non-ACO hospitals, patient and hospital characteristics were well-balanced. Average baseline payments were similar at ACO versus non-ACO hospitals. ACO participation was not associated with reductions in total Medicare payments [difference-in-differences estimate=-$72, confidence interval (CI95%): -$228 to +$84] or individual components of payments. ACO participation was also not associated with clinical outcomes. Duration of ACO participation did not affect our estimates.Although Medicare ACOs have had success reducing spending for medical care, they have not had similar success with surgical spending. Given that surgical care accounts for 30% of total health care costs, ACOs and policymakers must pay greater attention to reducing surgical expenditures.

OBJECTIVE To examine the financial impact of quality improvement using Medicare payment data. BACKGROUND Demonstrating a business case for quality improvement--that is, that fewer complications translates into lower costs--is essential to justify investment in quality improvement. Prior research is limited to cross-sectional studies showing that patients with complications have higher costs. We designed a study to better evaluate the relationship between payments and complications by using quality improvement itself as a measured outcome. METHODS We used national Medicare data for patients undergoing general (n = 1,485,667) and vascular (n = 531,951) procedures. We calculated hospitals' rates of serious complications in 2 time periods: 2003-2004 and 2009-2010. We sorted hospitals into quintiles by the change in complication rates across these time periods. Costs were assessed using price-standardized Medicare payments, and regression analyses used to determine the average change in payments over time. RESULTS There was significant change in serious complication rates across the 2 time periods. The top 20% of hospitals demonstrated a 38% decrease (14.3% vs 11.6%, P < 0.001) in complications; in contrast the bottom 20% demonstrated a 25% increase (11.1% vs 16.5%, P < 0.001). There was a strong relationship between quality improvement and payments. The top hospitals reduced their payments by $1544 per patient (95% confidence interval: $1334-1755), whereas the bottom of hospitals had no significant change (average $67 increase, 95% confidence interval: -$123 to $258). CONCLUSIONS Hospitals that reduced their complications over time had significant reductions in Medicare payments. This demonstrates that payers are clearly incentivized to invest in quality improvement.

Importance Payments around episodes of inpatient surgery vary widely among hospitals. As payers move toward bundled payments, understanding sources of variation, including use of medical consultants, is important. Objective To describe the use of medical consultations for hospitalized surgical patients, factors associated with use, and practice variation across hospitals. Design, Setting, and Participants Observational retrospective cohort study of fee-for-service Medicare patients undergoing colectomy or total hip replacement (THR) between January 1, 2007, and December 31, 2010, at US acute care hospitals. Main Outcomes and Measures Number of inpatient medical consultations. Results More than half of patients undergoing colectomy (91 684) or THR (339 319) received at least 1 medical consultation while hospitalized (69% and 63%, respectively). Median consultant visits from a medicine physician were 9 (interquartile range [IQR], 4-19) for colectomy and 3 for THR (IQR, 2-5). The likelihood of having at least 1 medical consultation varied widely among hospitals (interquartile range [IQR], 50%-91% for colectomy and 36%-90% for THR). For colectomy, settings associated with greater use included nonteaching (adjusted risk ratio [ARR], 1.14 [95% CI, 1.04-1.26]) and for-profit (ARR, 1.10 [95% CI, 1.01-1.20]). Variation in use of medical consultations was greater for colectomy patients without complications (IQR, 47%-79%) compared with those with complications (IQR, 90%-95%). Results stratified by complications were similar for THR. Conclusions and Relevance The use of medical consultations varied widely across hospitals, particularly for surgical patients without complications. Understanding the value of medical consultations will be important as hospitals prepare for bundled payments and strive to enhance efficiency.

Objective: We sought to determine whether the changes in incentive design in phase 2 of Medicare's flagship pay-for-performance program, the Premier Hospital Quality Incentive Demonstration (HQID), reduced surgical mortality or complication rates at participating hospitals. Background: The Premier HQID was initiated in 2003 to reward high-performing hospitals. The program redesigned its incentive structure in 2006 to also reward hospitals that achieved significant improvement. The impact of the change in incentive structure on outcomes in surgical populations is unknown. Methods: We examined discharge data for patients who underwent coronary artery bypass (CABG), hip replacement, and knee replacement at Premier hospitals and non-Premier hospitals in Hospital Compare from 2003 to 2009 in 12 states (n = 861,411). We assessed the impact of incentive structural changes in 2006 on serious complications and 30-day mortality. In these analyses, we adjusted for patient characteristics using multiple logistic regression models. To account for improvement in outcomes over time, we used difference-in-difference techniques that compare trends in Premier versus non-Premier hospitals. We repeated our analyses after stratifying hospitals into quintiles according to risk-adjusted mortality and serious complication rates. Results: After restructuring incentives in 2006 in Premier hospitals, there were lower risk-adjusted mortality and complication rates for both cardiac and orthopedic patients. However, after accounting for temporal trends in non-Premier hospitals, there were no significant improvements in mortality for CABG [odds ratio (OR) = 1.09; 95% confidence interval (CI), 0.92–1.28] or joint replacement (OR = 0.81; 95% CI, 0.58–1.12). Similarly, there were no significant improvements in serious complications for CABG (OR = 1.05; 95% CI, 0.97–1.14) or joint replacement (OR = 1.12; 95% CI, 1.01–1.23). Analysis of the “worst” quintile hospitals that were targeted in the incentive structural changes also did not reveal a change in mortality [(OR = 1.01; 95% CI, 0.78–1.32) for CABG and (OR = 0.96; 95% CI, 0.22–4.26) for joint replacement] or serious complication rates [(OR = 1.08; 95% CI, 0.88–1.34) for CABG and (OR = 0.92; 95% CI, 0.67–1.28) for joint replacement]. Conclusions: Despite recent enhancements to incentive structures, the Premier HQID did not improve surgical outcomes at participating hospitals. Unless significantly redesigned, pay-for-performance may not be a successful strategy to improve outcomes in surgery.