In the alternative-payment evaluations summarized by Penn LDI (Table 3 and surrounding text), measured savings are modest and concentrate in two places: short surgical episodes with clear attribution, such as lower-extremity joint replacement, and reduced hospitalization and post-acute utilization among people who are already ill, as in physician-led population-based ACOs. The summary reports no model that saved money by reducing the incidence of disease, and says the largest savings, in high-cost populations such as end-stage renal disease, may be attributable to risk selection and regression to the mean.

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Bundled payment models have produced modest per-episode savings for surgical procedures, most notably lower extremity joint replacements. Bundled payments have produced smaller savings for select medical conditions, such as congestive heart failure, and no savings for other conditions, such as cancer and acute myocardial infarctions.

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Population-based ACOs have generated modest per-beneficiary savings, with improvements along several quality dimensions. Evaluations suggest that physician-led ACOs have produced greater savings than hospitalled ACOs by reducing hospitalizations, and these savings increase the longer participants remain in the program. Hospital-led ACOs face conflicting incentives: lost admission revenues wipe out the shared savings earned through reducing hospitalizations. Therefore, hospital-led ACOs have focused on reducing post-acute care spending. While models targeting high-cost populations (e.g., those with end-stage renal disease) have generated the most savings, some evidence suggests that this is attributable to risk selection and regression to the mean.

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Successful value-based payment transitions take time; the savings and practice transformations from APMs take years of experience and investment to pay off.