The Congressional Budget Office’s issue brief, Lessons from Medicare’s Demonstration Projects on Disease Management, Care Coordination, and Value-Based Payment, provides details on the outcome of 10 major Medicare demonstrations following independent researcher evaluation.

Demonstrations were conducted during a 20-year span within two categories. Demonstrations were aimed at improving health care quality and delivery efficiency in Medicare’s fee-for-service program. The first broad category of demonstrations, disease management and care coordination, focused on improvements to care quality for beneficiaries with chronic illness and for beneficiaries faced with costly care demands. The second demonstration category, value-based payment, provided financial incentives to health care providers based not on volume or service delivery intensity but instead on care quality and efficiency.

Evaluations indicated that:

  • Most programs did not reduce Medicare spending.
  • Medicare spending decreased most when care managers interacted signficiantly with physicians and in-person with patients; however, on average, savings attained did not compensate for program cost.
  • Value-based payment system demonstration results varied, with some resulting in approximately 10 percent spending reduction and others producing little to no savings whatsoever.
  • Substantial payment and delivery system changes were likely required to notably reduce Medicare spending while also increasing or maintaining care quality due to challenges in overcoming inherent incentives within the fee-for-service payment system.

To read or download the full report, click here  (PDF).