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Accountable Care: Should You Care?

Quinn Phillips

February 8, 2011

Last year’s landmark health-care reform law — the Patient Protection and Affordable Care Act — has gotten renewed attention in recent weeks, as the House of Representatives voted to repeal it and the Senate is expected to vote on (but reject) its repeal as well. One provision of the law that has recently come under focus is its establishment of Accountable Care Organizations (ACO’s), which are set to come into existence in early 2012 and have been hailed by some as way to reduce health-care costs while improving patient outcomes.

As a recent article from NPR explains, under the framework set forth in the health-care law, ACO’s will consist of doctors and hospitals that voluntarily form a network to take responsibility for the care of Medicare patients. Patients would not, however, be forced to stay within this network for their health-care needs. The ACO would then be given financial incentives, through Medicare, to keep the cost of care down, as well as to keep the quality of care high as measured by medical outcomes. (Medicare will publish regulations for ACO’s later this year.) The purpose of this setup is to foster efficient, cooperative care focused on results — unlike, in the view of many, the current fee-for-service Medicare reimbursement scheme, which simply pays doctors for each visit, test, or procedure that a patient receives.

A potential pitfall of this system is that patients could seek out care outside of their ACO, thus possibly generating extra expenses that undermine the ACO’s overall cost-effectiveness. Each ACO would most likely come up with incentives for patients to see its own providers, since its own incentives from Medicare will depend, in part, on limiting the overall cost of care for a patient — even if that care comes from outside the ACO. As Dr. Pauline W. Chen points out in The New York Times, the success of ACO’s could therefore depend very much on whether patients buy into the concept, or at least whether they follow the incentives that their ACO offers.

And, of course, ACO’s have to expect some degree of success in limiting patients’ expenses in order to exist in the first place. The future of ACO’s could thus depend on the early performance of the first ones: If they are successful at keeping costs down, more would surely spring up, and the payment model could spread through Medicare and to private insurers. If early ACO’s falter, the new system could quickly dissolve.

Do ACO’s sound promising to you, or potentially unworkable? Would the prospect of cost savings within the broader health-care system be enough to motivate you to cooperate with an ACO? Would you be likely to respond to its financial incentives, or would even these be unlikely to stop you from seeing an outside doctor or hospital if you wanted to? Leave a comment below!



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