I recently announced that I’d be starting a blog series on ACOs-Accountable Care Organizations. Here’s the first part of the blog series presenting an argument for ACOs.
Accountable Care Organizations are a new concept intended to save Medicare dollars provided for in HealthCare Reform. Spokesmen for the Obama administration say these new forms of providing healthcare will be able to save untold amounts in Medicare spending by reducing waste and unnecessary procedures ordered by doctors performing defensive medicine.
The blog post Accountable Care Organizations, Explained by Jenny Gold gives a pretty good overview of ACOs.
In it, she outlines ACOs as simply networks of hospitals and doctors that agree to manage all the medical needs of at least 5,000 Medicare patients for at least three years. Doctors and hospitals participating in Accountable Care Organizations will be paid through a fee for service system similar to traditional Medicare billing. The major difference between an ACO and traditional Medicare lies in the fact that these doctors and hospitals will receive bonuses from Medicare funds if they are able to keep costs down. This will partly be done by sharing services within the ACO according to members of the administration. Since this difference is largely behind the scenes, patients may not even know they are a part of an Accountable Care Organization.
Even though doctors will be incentivized to keep costs low, these doctors will also need to maintain certain standards of care “as the Secretary [of Health and Human Services] shall determine,” in order to keep their contracts. Further, despite the fact that bonuses will be paid, proponents of ACOs argue that there will still be aggregate savings in the long term.
Among these proponents, the Obama administration’s Health and Human Services department insists this payment of bonuses to doctors and hospitals for reduced billing to Medicare will incentivize doctors to keep their patients healthy by practicing preventative medicine rather than only treating patients when they are already sick. According to the administration, this will save money.
So what do you think? I’d love to hear your thoughts, so please be sure to comment and share this post with others. Stay tuned, the next blog will focus on the argument against ACOs.
