Friday, June 17, 2011

FAQ On ACOs: Accountable Care Organizations, Explained - Kaiser Health News

In the new healthcare reform law, there is a key new concept called the ACO or Accountable Care Organization. This concept can be extremely confusing and it has taken me the better part of the past year to fully understand and appreciate its implications.

First off, an ACO is not a single organization as its name would imply. Rather, it is a collection of many healthcare organizations and physicians who have aligned together to provide comprehensive care and to be accountable for that care. Said another way, its intention is to make it so physicians and healthcare organizations are incentivized not merely based on the number of procedures they do (transaction medicine) but instead on the quality and economics of the care they provide.

The analogy in this article is that of a television. A television is made up of many different components from a variety of suppliers (circuit boards, screen, etc...) and is assembled by an organization, such as Sony, who delivers the final product to the customer and who is accountable for the quality of that product.

ACO's follow that type of concept - that rather than having a piecemeal healthcare equation where you are buying a circuit board here, a screen there, etc... you would get the total product from an organization that was accountable for its quality.

In theory, this makes sense to me but as is the case with any broad initiative, there are likely to be unintended consequences.

This article from Kaiser Health News does an excellent job of explaining the ACO model.

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