Assessing Financial Performances in the Medicare Shared Savings Program: Past, Present, and Future

With over 400 participants to date, the Medicare Shared Savings Program (MSSP) is a popular option for many Accountable Care Organizations (ACOs) that seek incentives to reduce expenditures and improve the quality of the care that they deliver. However, there is much uncertainty as to whether ACOs will be able to reduce expenditures sufficiently to experience the rewards associated with the MSSP, continue reducing expenditures so that rewards can be maximized, and prevent increases in expenditures that could otherwise lead to penalties in the future. The objective of this study was to investigate these uncertainties by an evaluation of MSSP participants currently in their first three-year contracts over the range of several time periods: the years prior to, the years during, and the future years of the MSSP. I found that, on average, ACOs should expect to experience a reduction in per capita costs relative to projections made based on the years preceding MSSP participation. Further, they should expect that continuing to reduce expenditures will be a significant challenge. Ultimately, it is projected that about two-thirds of current participants will remain in the MSSP throughout the duration of their second contract period, with approximately one-third dropping out due to the high likelihood of being penalized.Master of Science in Public Healt