Medicare cost reduction programs fail

March 10, 2012

Government test projects aimed at improving outcomes and reducing spendings aren't working.

Medicare test projects aimed at improving outcomes and reducing spending largely have failed, according to the Congressional Budget Office (CBO).

The CBO studied the results of 10 projects-six in disease management/care coordination and four in value-based payment. It found that spending either didn't change or increased relative to what would have been spent without the program, after fees paid to the participating organizations were considered.

Disease-management programs had little or no effect on hospital admissions or regular Medicare spending, although bundled payments were found to achieve some savings.