LAUSR

Fee-for-service payment models are moving toward pay-for-performance designs, many of which rely on shared savings for financial sustainability. Shared savings programs divide the cost savings between health care purchaser and provider based on provider performance. Often, these programs measure provider performance as the delivery of agreed-upon clinical practice guidelines that usually are represented as evidence-based medicine (EBM). Multiyear studies show a negative relationship between total cost and EBM, indicating that long-term shared savings can be substantial. This study explores expectations for the rewards in the first year of a shared savings program. It also indicates the effectiveness of using 1 year of claims to assess cost savings from evidence-based care, especially in a patient population with high turnover. This study analyzed 1956 adults with diabetes insured through Medicaid. Results of linear regression showed that the relationship between total cost of care and each element of evidence-based medical care during a 1-year period was positive (higher cost) or insignificant. The results indicate that diabetes EBM programs cannot expect to see significant cost savings if the evaluation lasts only 1 year or less. The study concludes that improvements in EBM incentive programs could come from investigating the length of time needed to realize cost savings from each element of diabetes EBM. Investigating other factors that could affect the expected amount of cost savings also would benefit these programs, especially factors derived from sources external to insurance program information such as the medical record and care management data.