Pay attention when you hear “ACO” or “Accountable Care Organization”

If you were happy with the HMO concept, you are going to be delighted with the ACO. Medicare is in the process of setting up Accountable Care Organizations and will be assigning Medicare beneficiaries to an ACO.

Now the Governor Duval Patrick of Massachusetts has introduced legislation that will require all health care providers to align themselves with an ACO. Within the ACO providers will receive a fixed lump sum payment to care for a patient. Patients may receive care outside the ACO, but will pay more for the opportunity.

You may want to perk up your ears whenever you hear the acronym ACO. I will delve into this issue more in the weeks ahead, but for now keep in mind we are talking about more closed networks, a form of capitation payment and limited or more costly choice.  Following is a brief summary of the structure of an ACO as proposed in MA.

Five things you need to know about health care changes

An ACO – accountable care organization – is a group of doctors affiliated with a hospital and other providers to care of you for a lump sum each year. 

Take care picking your primary care doctor. That will determine what hospital you go to and where you get other medical services.

Your local hospital is your center for medical services. You won’t go elsewhere except for very special care like cardiac surgery or stroke assessment.

You can go to the big teaching hospitals in Boston, but you will probably pay more, perhaps through higher insurance deductibles or co-pays.

If the ACO that serves you does a good job keeping its patients healthy, some of the savings go back to you through lower health insurance premiums.

There is no doubt that we have to change the way health care is provided and paid for if we have any hope of controlling costs.  But keep in mind that also means is it not business as usual.  Contrary to political rhetoric, you may not be able to keep your current health plan, someone is going to come between you and your doctor, your freedom of choice will likely be limited.  You will pay more to receive care where you prefer to receive care. 

If all this leads to better, higher quality and more efficient health care for all Americans so be it.  But it is a big “if.”

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4 replies »

  1. Bob,

    nice job of avoiding most of the cliches re: anything resembling managed care.

    But help us with this: “someone is going to come between you and your doctor”

    As the kids say, “what does that even mean?”

    And while you’re delving into that (is “someone” somebody like the boogeyman?), please provide real examples of how whatever you depict differs in substance from any variant of the managed care that is already prevalent in employer-sponsored health benefits.


    • It means that some organization, some group or in the case if Medicare some government group will be more involved in setting guidelines for care and for closer monitoring of compliance. In short, similar to what a well run HMO does.

      Few employers employ these measures on a concurrent basis which is what we are talking about. Those who offer Kaiser plans come the closest.


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