May 8, 2015

People expecting ObamaCare’s Accountable Care Organization (ACO) model to solve North Carolina’s Medicaid overspending better reconsider.

Wake Forest University’s study reports Medicare ACOs operating in North Carolina actually raise costs instead of lowering them. According to the data, ”So far, Medicare ACOs in North Carolina have not generated substantial savings. Instead, the eight North Carolina ACOs participating in Medicare in 2012 or 2013 spent an average of $677,272 more than what the federal government estimated that traditional Medicare would have cost. In total, only three of the eight ACOs saved money, but those savings were fairly substantial. While Medicare ACOs have done better in other states, the current North Carolina participants are having trouble hitting their savings stride.” (WFU)

In contrast, Ohio’s Medicaid program uses fixed payment managed care to save taxpayers $1 billion a year over three years with a positive trend in quality indicators.

ACOs haven’t saved money in Medicare. We’ll get a better deal if for profit managed care companies are allowed to compete with the medical industry’s ACOs. Competition ought to be the North Carolina Medicaid reform plan.