Accountable Care Organizations (ACOs) have received a lot of buzz lately as the nation grapples with ways to reign in health care costs. But I think that there’s still a lot of confusion about how they would work. A couple of very informative posts on the topic were included in this week’s Grand Rounds, and I wanted to share them with our readers.
First the Healthcare Economist gives us a good overview of what ACOs are, how they might work, and problems they may face. The widely used fee-for-service model doesn’t place any responsibility on doctors and hospitals to reduce costs – in fact, it mostly does the opposite, since the more procedures, tests, office visits, etc. a patient has, the more the doctors get paid. Efficient ACOs could be a way to solve this problem, but a lot will depend on public perception of the plans, and how well they actually do in terms of providing quality care. For patients who have health insurance, quality and convenience of care are likely to be more important than cost, since health insurance tends to insulate people from the actual cost of healthcare. While it’s true that the cost of healthcare is the driving factor behind the cost of health insurance, the true cost of care is still an unknown factor for a lot of insured patients. I think that ACOs will have to place an emphasis on customer service and quality healthcare in order to win over patients. If they can do that and also lower costs, they will be successful. If they lower costs but patients aren’t convinced that they’re getting good service, it will be an uphill battle to win public support.
HealthBlawg’s David Harlow has analyzed a proposal by Jeff Goldsmith regarding how private health insurance could most efficiently reimburse providers, using a multi-pronged approach that involves fee-for-service, risk-adjusted capitation payments, and severity-adjusted bundled payments. Although David sees value and benefits in the proposed reimbursement system, he points out a number of reasons why it might be easier said than done. Both Goldsmith’s proposal and Harlow’s thoughts on the matter make for good reading for anyone interested in the specifics of how we can reimburse medical providers in order to maximize the bang for our buck and the quality of care patients receive.