• Some perspective on the savings, please

    Look, I like to save money in health care as much as the next guy. But this was a bit misleading. First the headline:

    Headline

    Then some text:

    A pilot program created under ObamaCare to change Medicare’s payment system saved almost $400 million and will be expanded, the administration announced Monday.

    An independent report released by the Department of Health and Human Services on Monday finds that the pilot program saved Medicare more than $384 million across 2012 and 2013.

    The pilot program, called Pioneer Accountable Care Organizations, is part of an effort to shift Medicare to paying for quality instead of quantity of care.

    So many of my targets here. ACOs, Medicare, spending, pay for performance. I was ready to eat some crow. Looks like it all works!

    But then I noticed that it saved $400 million. Not billion. MILLION. It was over two years, with diminishing returns. Evidently, they saved $280 million in year one and $105 million in year two. 13 of the 32 participating programs dropped out!

    I hope all of this stuff works. And I’m not saying that $400 million isn’t a lot of money. But let’s have some perspective, please. Saving a couple hundred million out of the Medicare program is a decimal point. These are pilot programs, and they may turn out to work. But there’s a long way to go before it’s time to celebrate.

    @aaronecarroll

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