What is an ACO and why should I care? An introduction

ACO: Accountable Care Organization

The 2010 law promotes the use of these medical practice groups in order to cut costs and hopefully deliver better healthcare. But what is it and what makes it different that what we’ve had before in America?

An ACO is a group of various doctors and practices and hospitals who work together to provide care. Your primary care physician (PCP) is the leader for you in this model. If you need a referral to a specialist, s/he will make it and send you to someone within the ACO. You would get all your tests, even go to the hospital if needed, all under the same group or umbrella. This would be cheaper than going outside your system.

Some people are super excited by this. It sounds pretty nice to have a home base and your PCP as a guide for everything. But a lot of people are struggling with the logistics of it. Is it actually going to save money or be impossible to implement?

There are a few big questions that a lot of health care bloggers out there are asking including: How will patients select or be assigned and ACO? How can you keep costs down and ensure that better patient care is the highest priority instead of securing more market power?

Currently we operate under a fee-for-service system where each individual is required to pay (often with the help of an insurance company) after receiving care which can be unduly difficult for patients to pay sometimes. In this system physicians make more money by offering more care, providing more services. Hospitals make more money by having more admissions. With an ACO, doctors and hospitals would make money by keeping costs down and improving the care of their patients, not just by caring for more patients.

Another notable aspect to ACOs is that they are based on regional and local standards instead of national standards. Is there a local health concern? This is a factor that is taken into consideration at an ACO.

We used to have something called HMOs in the 90s and there are a few still around although it’s difficult to find supporters. These were similar to ACOs in that they consolidated care through cooperation. HMOs however, were regulated by the insurance companies and cooperation was forced. This resulted in a lot of unhappy people. ACOs will be regulated by the providers (docs, hospitals, etc) and groups will be formed from existing cooperative practices and hospitals. Hopefully this will result in happier physicians and patients.

It all sounds great on paper. Large medical groups already networking in a system like this will have the resources to make an ACO happen. Smaller groups may not, although it would appear to me that they would then join a larger group as part of a team. I can imagine there would be frustration on the part of small private practices who would perhaps become redundant with other similar care providers. Many of these smaller practices are struggling, though, so joining up might provide an incentive.

I think there are going to be serious concerns about getting this to work in an efficient, cost saving, and patient benefiting way. There aren’t many of them up and operating yet, but the goal is to have them at the forefront of our medical care in the next few years. It might not be perfect, but it may be the best we’ve got for now.

Thoughts?

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One thought on “What is an ACO and why should I care? An introduction

  1. Pingback: A Utopian World? | hopeMD

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