Physician Participation in Medicare Accountable Care Organizations and Spillovers in Commercial Spending

Importance: The benefits of public payment policy may extend to private populations through "spillover" effects. If cost-saving efforts in Medicare also reduce costs among commercially insured patients, Medicare payment systems could be a versatile policy tool in future reform efforts. Objectives: To determine whether physicians who participated in a Medicare Accountable Care Organization (ACO) reduced spending among their commercial patients. Design: This was a retrospective, longitudinal study which was conducted using Blue Cross Blue Shield of Michigan (BCBSM) claims data from 2010 to 2015. We compared patients seen by physicians who participated in a Medicare ACO to patients whose physicians were not part of an ACO. We used a difference-in-differences (DIDs) design to test whether physician participation in an ACO was associated with reduced spending among their commercially insured patients. We also tested for heterogeneous effects: we assessed whether spillovers were larger among patients with clinical conditions (acute myocardial infarction, pneumonia, congestive heart failure) that have previously been targeted by Medicare payment programs. Setting: This was a population-based study of commercially insured patients in Michigan. Participants: Patients who experienced a significant clinical episode (eg, labor and delivery, acute myocardial infarction) between 2010 and 2015. Exposure: Our patient-level exposure is treatment by a Medicare ACO-affiliated physician. Main Outcomes and Measures: Medical spending of 0-90 days and 91-365 days after a clinical episode. Results: Patients in the exposure group (n=54,750) and in the control group (n=137,883) were similar in demographic characteristics of age, sex, and type of clinical episodes. Adjusted mean 90-day spending in the preexposure period was $21,292 among the exposure group and $21,157 among the comparison group; these means declined to $21,250 and $20,995 in the postperiod, yielding a DIDs estimate of $119 [95% confidence interval (CI), -$170 to $408]. Adjusted means for 91-365 days spending in the preperiod were $4258 among the exposure group and $4251 among the comparison group; these means rose to $4338 and $4421 in the postperiod, yielding a DIDs estimate of -$90 (95% CI, -$312 to $132). We also separately examined patients with conditions that have been targeted by other Medicare payment programs. Among these patients, 90-day spending did not differ between exposure and comparison groups (DIDs, -$223; 95% CI, -$2037 to $1591), although 91-365 days spending decreased among the exposure group with marginal statistical significance (DIDs, -$1160; 95% CI, -$2459 to $140). Conclusions and Relevance: Physicians who participated in Medicare ACOs did not reduce spending among most of their commercially insured patients. Medicare policy is unlikely to confer significant spillover benefits to the commercially insured population.