Among the many ways the Affordable Care Act tries to drive down healthcare costs is through Accountable Care Organizations.
Just what are ACOs? HMOs in drag? And are they working?
Here’s how we see the ACO landscape today:
- Although their launch has been somewhat troubled, Accountable Care Organizations are here to stay.
- The Centers for Medicare and Medicaid Services (CMS) is driving the adoption of ACOs, with some private payers joining in.
- Data collection and analysis hold out the promise of reducing inefficiencies.
- ACOs don’t take on a lot of risk if they can avoid it. That in turn will affect how much money they can actually save the healthcare system.
- In a related development, some payers – including a new industry alliance – are looking closely at the role of health insurance third-party administrators (TPAs), to see if further cost can be taken out of the system there.
What Is an ACO?
First, a bit about terminology. While ACOs undertake some responsibility for the cost of delivering care, they are not “all in,” as are HMOs. (For a good video explaining ACOs, see this from Kaiser Health News.)
Here’s how healthcare economist Austin Frakt, writing in the New York Times, explains the differences between ACOs and HMOs: Continue reading “Cost Conundrum: How Accountable Are ACO’s?”
