In the many conversations I've had this year about the CMS ACO pilot, hospital executives and others invariably compare the initiative to Medicare's Physician Group Practice Demonstration. Beginning in 2005, the PGP demonstration aimed to incentivize the 10 physician group practices — handpicked for their existing care coordination efforts — to improve care for Medicare beneficiaries, with participants receiving performance payments for both generating savings and achieving performance on 32 quality measures. I get the sense that most providers seriously considering ACO participation are keeping a close eye on the PGP demonstration.

Earlier this week, CMS announced results for the fifth full year of the program, highlighting the news that all 10 participating physician groups reached benchmark performance on 30 of the 32 quality measures. Seven of the providers achieved benchmark performance on all 32 measures.

Perhaps of most interest to hospitals, four of the 10 providers received incentive payments based on savings in Medicare expenditures. All told, the four practices received $29.4 million, or roughly 81 percent of the $36.2 million in savings generated for the Medicare Trust Funds for the fifth year of the program.

In a statement, CMS Administrator Donald Berwick, M.D., explicitly made the connection between the program and the upcoming ACO effort, noting that lessons from the demonstration will be incorporated into the new initiative. He also emphasized the importance of the growth that the program's participants have made year-to-year, in what seemed to be a response to criticism that the cost of participating in the ACO program may be too steep for many providers.

"We have learned to invest in sustained improvement over time, and that short-term comparisons between start-up costs and measureable results may fail to realize the long-term value of these efforts," Berwick said.

Given the considerable costs to prepare for the ACO program, though, any provider considering participation is going to have to make short-term comparisons about the value proposition. And I doubt that this report in and of itself will be enough to sway all the ACO fence-sitters who are still waiting on CMS to tweak its proposed regulations before jumping in. As I've written before, the last few months have witnessed a shift away from participation in the formal ACO pilot and toward adopting a broader accountable care philosophy.

But regardless of whether the ongoing results of the PGP demonstration are enough to convince any would-be ACO players to jump in, the program's recently updated Fact Sheet, which includes detailed analysis of the latest results, is worth a read for its exploration of the varied strategies the participants — who include Geisinger Clinic, Billings Clinic and the Everett Clinic, among others — used to coordinate care for Medicare beneficiaries. On their own, many of the organizations the participants come from are considered models for accountable care, so their journeys to meet the standards are worth a look.