Tuesday, January 31, 2012

Emanuel on Accountable Care Organizations

Zeke Emanuel and Jeffrey Liebman are predicting that health insurance companies will vanish by 2020, to be replaced by the Accountable Care Organizations (ACOs) being called into being by President Obama's Affordable Care Act. ACOs, they predict, will practice more efficient medicine than the current fee-for-service system can generate, and will also replace insurance companies' risk-spreading function by pooling the risks of their higher- and lower-cost patients.

I can't share their optimism. Data from the five-year Medicare Physician Group Practice demonstration project casts doubt on the ability of ACOs to extract major savings from care-coordination. This Health Affairs Health Policy Brief on ACOs raises that question, and others as well: will ACOs form only in wealthier regions of the country, thus worsening already-existing health disparities? Could alliances among healthcare providers result in higher prices? Will ACOs run afoul of antitrust laws?

Of course we should do a better job of coordinating care; of course we should incentivize our doctors and hospitals to work on keeping people well rather than on intervening with expensive procedures after they're sick; of course we should use our better information technology to cut costs without cutting quality. Can ACOs do all of that? I sincerely hope so. But I'm not willing to bet that they'll be so successful as to make private health insurance obsolete in the next eight years.

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