Monday, November 28, 2011

ACOs May Raise Costs and Lower Quality

In his 11/21/2011 Forbes blog post, Avik Roy wrote about recent comments by FTC commissioner J. Thomas Rosch on the ObamaCare "Accountable Care Organziations".

In particular, Rosch warned that net result of ACOs could be "higher costs and lower quality health care -- precisely the opposite of its goal" (emphasis Rosch's, not mine.)

His remarks can be found on page 15 of this transcript of his 11/17/2011 speech before the American Bar Association’s Antitrust Fall Forum.

ACOs represent the government creation of large consortiums of doctors and other medical providers, which may exert near-monopoly power in many markets. The various government financial carrots and sticks tilt the playing field away from smaller private practices which have otherwise thrived in the American medical marketplace for many years.

By driving small private practices out of business, the subsequent problems created by these de facto monopolies (or quasi-monopolies) should be attributed to the government, not a non-existent free market.

(Note: This should not be construed as an endorsement of the legitimacy of "antitrust" laws.)