Pediatric ACO Cuts Cost Growth, but Not Quality

Marcia Frellick

February 09, 2015

Partners for Kids (PFK) in Ohio, the oldest pediatric accountable care organization (ACO) in the United States, increased value for Medicaid children in 34 counties in the state between 2008 and 2013, according to a new analysis. The gains came primarily through cost savings, and quality remained steady.

Kelly Kelleher, MD, MPH, from Nationwide Children's Hospital and The Ohio State University in Columbus, and colleagues compared the historic cost of care for PFK compared with statewide Ohio Medicaid fee-for-service and managed care (MC) cost histories.

They found that PFK per member monthly costs were lower in 2008 than either fee-for-service or MC costs (P < .001). During the study period, PFK costs grew at a rate of $2.40 per year compared with fee-for-service increases of $16.15 per year (P < .001) and MC increases of $6.47 per year (P < .121).

Quality Remained Steady

Overall, quality indicators were steady between 2008 to 2010 and 2011 to 2013. There were modest improvements in gastroenteritis admission rate, pediatric quality acute composite, and pediatric quality overall composite. Minor declines came in diabetes short-term admission rates and perioperative hemorrhage or hematoma rates. There were no significant differences on 10 other measures studied, the researchers report in an article published online February 9 in Pediatrics.

Pediatric ACOs have some additional challenges compared with adult ACOs: They have fewer complex, high-cost patients, so there are fewer targets for cost saving, and most children are as healthy as they will ever be in their lives, so there are fewer opportunities to improve outcomes. However, the potential benefits have longer-lasting effects.

The question of value in pediatric ACOs is largely untested, Dr Kelleher and colleagues note. Yet, at least 10 children's hospitals have partnered with physician networks in recent years in risk-sharing models for pediatrics.

PFK is a physician/hospital organization in central and southeast Ohio that has embraced population health and integration strategies for the last 6 years.

The authors acknowledge that PFK had support other organizations may not have that contributed to its success, including "institutional emphasis on quality and safety outcomes, strong partner Medicaid MC plans, a highly integrated network of pediatricians with strong market share, state Medicaid support, second- and third-generation technology, and a 120-year hospital history in the community."

Commentary: ACOs Need Bold Leadership

In a related commentary published in the same issue, Stephen Berman, MD, praises the researchers' work and notes that their results were similar to those of previous studies on adult ACOs. He says, however, that ACOs need to go beyond restraining costs and improving quality. He outlined four challenge areas for pediatric ACOs: developing public–private partnerships (schools, Medicaid, civic organizations) that target prevention, developing mobile apps to influence lifestyle changes, restructuring processes away from traditional physician face-to-face encounters to team models, and targeting child poverty, which is at the root of many child health problems.

"Now is the time for bold leadership at all levels if pediatric ACOs are to become a transformative approach to better child health as well as better care," he writes.

The study is supported in part by the Centers for Medicare & Medicaid Services, Centers for Medicare & Medicaid Innovation. Dr Kelleher is an unremunerated board member for PFK. A coauthor is the executive director of PFK and has a possible conflict of interest. The other authors and Dr Berman have disclosed no relevant financial relationships.

Pediatrics. Published online February 9, 2015.

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