Joseph Rugg's Health Law Blog

In 2005, Park Nicollet Health Services started participating in a pilot project that was the first to test the idea of “accountable care organizations” in the federal Medicare program.

Called the Physician Group Practice Demonstration Program, Park Nicollet was one of 10 large multi-specialty groups across the country that agreed to adopt a new payment relationship from Medicare for a portion of its patients.

The premise was straightforward: If Park Nicollet and other groups could provide care at a lower cost while meeting quality standards for patients, the groups would share the savings with Medicare.

But as a study published this month in the Journal of the American Medical Association shows, results from the Physician Group Practice, or PGP, project have been mixed. Overall, researchers found that the five-year pilot delivered only modest savings, although savings were larger for a subset of patients, many of whom have complex health problems.

“(Park Nicollet) received a bonus payment in only one year of the PGP,” said Carrie Colla, a researcher with the Dartmouth Institute for Health Policy and Clinical Practice. “But in the (subset), they saved quite a bit of money.”

Improving care while lowering costs for complex patients is one of the key challenges facing the nation’s health care system, said Dr. David Abelson, the chief executive officer at St. Louis Park-based Park Nicollet, during an August 2011 interview about the pilot project.

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