Monday, January 31, 2011

ACOs: Repackaged HMOs?

Americans are beginning to realize what ObamaCare will mean to them, unless repealed.

From the 1/27/2011 New York Times article by Dr.Pauline Chen discussing her conversation with friends about Accountable Care Organizations (ACOs), "The Missing Ingredient in Accountable Care":
Unlike fee-for-service, payers will give A.C.O.'s a lump sum to cover all care, but the A.C.O.'s will be able to keep any savings that result from more efficient and better care.

In this way, I concluded to my friends, A.C.O.'s will be able to stem spiraling costs, increase efficiency and improve quality. Clinicians and hospitals will have a financial motive not to do more procedures and incur more visits but to keep patients healthy and out of the hospital.

..."Thanks for the explanation, Pauline," she said. She pulled her phone out and quickly glanced at its screen. "I hate to break it to you," she continued, "but whatever that care plan is called, it still sounds like an H.M.O. to me."
But at least with an HMO, patients know who their doctor is working for. Under the ACO system, patients may be "virtually assigned" to an ACO without their knowledge (or consent). Hence, the doctor's practice statistics for all his patients (# of referrals, tests ordered, etc.) would be used in determining if he was practicing "efficiently" or not. Patients might naively trust their doctor to be working for their best interests, without realizing that the doctor was also simultaneously trying to please an unseen ACO bean counter.

Hence, these "virtual assignments" are even scarier than explicitly joining HMO.

Furthermore, the article highlights the other problem with ACOs theoretical strategy for cost containment. If patients are allowed to freely go outside of the network (i.e., "no lock-in") for their care, then the ACO will have a hard time controlling costs (i.e., "leakage") -- and will fail.

On the other hand, if patients are forbidden from going outside of the network (or subject to heavy financial penalties for doing so), then the ACOs operate much like the much-reviled HMOs that Americans resoundingly rejected in the 1980s.

Fortunately, Americans are starting to catch on to the fact that ACOs may be harmful to their health.

(Via @Lucidicus.)