Are ACOs the answer to health reform?

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Add another acronym to the health care reform debate: ACOs.

John Bertko, a visiting scholar at the Brookings Institute, said that Accountable Care Organizations — sort of the new millennium’s answer to Health Maintenance Organizations — could be a way to tie together the various aspects of reform.

“We can create a system where reform works, but we have to roll up our sleeves and get it done,” he said. “ACOs are one method to accomplish this.”

An ACO is a group of providers (hospitals, primary care doctors and specialists) that would be held responsible for both the quality and cost of health care for a specific population of Medicare beneficiaries.

“This way, you can provide or manage a continuum of care in one integrated delivery system,” he said. “And CMS (the Centers for Medicare and Medicaid Services) could measure performance and quality. They can plan budgets and resources, pool them.”

There are many ways to structure an ACO, he said, and each geographic area could define its own structure, particularly rural areas.

“But this isn’t exactly like an HMO,” he said. “You don’t have to enroll members. ACOs sign up providers and they decide who owns which part of the ACO. When we’ve done pilot projects, there is a high degree of loyalty to the local delivery and we want to maintain that.”

Patients are assigned to a primary care doctor based on the majority of their outpatient visits. Primary care providers can join only one ACO, but specialists and hospitals can belong to more than one.

“This give local accountability for cost, quality and capacity,” Bertko said. “By working together, there will be shared savings as well.”

Some ACO models provide bonuses for performance, and some provide penalties for poor quality of care.

In theory, an ACO would end overcharging for services and defensive medicine because it would pay bonuses to groups that maintained spending at target levels, Bertko said.

“Pooling resources means saving money,” he said. “Coordinating care inside a single system also will save money. It will reduce extra lab expenses, extra imaging costs.”