ACOs: Getting More for Less?

May 23, 2011Articles New Jersey Law Journal

There's a new model on the health care scene: the accountable care organization, or ACO. The premise of an ACO is that aligning the interests of otherwise separately operating, often competing and frustratingly non-communicating health care providers, payers and patients will lower costs while improving access to and quality of health care. If accountability is truly shared among the various parts of the system, then opposing or disjointed facets of the system will create ways to work together to produce the best results.

While it is tempting to dismiss the ACO model as simply renamed physician hospital organizations (PHOs), independent practice associations (IPAs) or closed-panel HMOs of the past, these prior attempts to revise how health care was delivered or reimbursed focused on aligning discrete segments of the health care system. They rarely, if ever, rewarded component parts of the model for the quality and efficiency achieved by the whole. These models pre-dated the health information technology systems we have today, and were developed in an era when volume was viewed as a rational basis for reimbursement.

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