What are Accountable Care Organizations and are They Really Going to Help?

Topics: Health care, Health insurance, Managed care Pages: 10 (3935 words) Published: April 29, 2013
What are Accountable Care Organizations: and Are They Really Going to Help? Park University: HA 604, Health Care Economics and Payment Systems  
In the 1980s and 1990s Health Maintenance Organizations (HMOs) were the next big thing in the health care community. At the time, this form of health insurance was believed to be end all solution to high, and getting higher health care costs. The Government quickly started using HMOs and its different forms for their federally funded health insurance companies of Medicare and Medicaid. Thirty years have passed since the hay day of HMOs, and the U.S. Government has deemed that HMOs are just not working any more, the cost of health care continues raise, and we need to fix the problem. What is the solution? Accountable Care Organizations (ACOs)! To many people, these organizations are just HMOs with bright red lipstick, but nothing else has really changed. Let’s call it an HMO hybrid. This paper takes a closer look at ACOs, their history, track record, and views from leading authorities on their effectiveness. The paper will also give topics of consideration that all physicians should look into, before deciding if they should join an HMO with lipstick. I mean an ACO.

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During the 1970s- and early 1990s, Managed Care Organizations (MCOs) dominated the face of health care. They were an attempt by the government and insurance agencies to help reduce the rising and expensive costs of healthcare. In some ways these plans were effective, and in others they were not. MCOs are still very present today in health care, however the bill known as the Affordable Care Act of 2010 (ACA) included plans to change the face of MCOs as we now know them. In order to do so, plans have been made to form and introduce Accountable Care Organizations (ACO). This plan has been described as being just another integrated delivery system linking physicians together to provide care. (Shi & Singh) Others have described this new form of health care delivery as, “old wine of managed care in a new bottle (or, as some have waggishly put it, managed care in drag).” (Accountable care organizations) This paper takes a closer look at what exactly an ACA is, how it relates to Medicare, and cost containment. We will also take a close look at the positive and negative aspects of these types of plans.

In January 2012, Medicare began its first phase of the implementation of ACOs. The core idea of the ACO is that groups of providers—hospitals, physicians, some combination of both—will agree to be responsible for all of the medical care for a certain number of people, even for the care that they’re not directly providing. (Accountable care organizations) In fact an ACO is very similar to other managed care organizations and other integrated delivery systems (IDS). IDS are networks of organizations that provide or arrange to provide a coordinated continuum of services to a defined population and is willing to be held clinically and fiscally accountable for the outcomes and health status of the population services. (Shortell et al.) One may wonder how this plan is any different than the plan presented in 1973 as The Health Maintenance Organization Act, which sought to:

Achieve efficiencies by integrating the four functions of health care delivery, employ mechanisms to control utilization of medical services, and determines the price at which the services are purchased and, consequently, how much the providers get paid. (Shi & Singh Pg. 8)

The goals of the ACOs are the same as the goals set for MCOs, but ACOs want to accomplish their goals in a way that will finally start to reduce the cost of health care. In an attempt to do just that, ACOs will focus on instituting benchmarks on which to judge the different ACOs. If the ACO is able to conform to the benchmark, in terms of overall cost and quality of care, then those ACOs...
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