What’s an “accountable care organization”? If you read Tevi Troy’s latest column, you might be sorry you asked:
ACOs are groupings of health-care providers who join together under specific rules in order to create shared savings. The idea is to bundle a single payment for a patient so that providers do not have incentives to prescribe additional services that generate additional fees. This sounds like a relatively simple concept. …
… Now the draft regulation with those details is out: It is 400-pages long, containing 65 separate metrics for success. It also has odd limitations such as the effective prohibition of creating ACOs in medical specialties such as oncology, as well as penalties for organizations that try but do not hit their metrics. Even Elliott Fisher, the so-called father of the ACO concept, has said that given the heavy-handed approach, primary care groups “may want to think twice” about them. If this sounds like something Washington can screw up, then keep reading, because the jokes almost write themselves.
Joke No. 1: “I don’t know how to define an ACO, but I know it when I see it.” This joke, which draws from Justice Potter Stewart’s famous definition of pornography in the obscenity case Jacobellis v. Ohio (1964), highlights the indefinable nature of ACOs. For a year since the passage of President Obama’s trillion-dollar health law, we have been waiting to see what rules will govern their development. Unfortunately, now that the rules are out, things do not appear to be much clearer.
Joke No. 2: “We have tried ACOs already, they were called HMOs.” This joke refers to the fact that there is nothing new under the sun when it comes to attempts to rein in health-care costs. You have two choices – ration care or increase free market competition, innovation and choice.
