Health Reform

Avoiding the Backlash

Accountable care organizations (ACOs) make physicians responsible for cutting wasteful health spending and improving care; features of today’s health care environment will aid reformers in placating their opponents.

Health reform during the 1990s created the managed care system; under managed care, health insurers controlled payments to health care providers and decided where patients could receive care. Because it lowered fees and restricted benefits, providers and patients rejected managed care.

ACOs, discussed in this review, are an emerging strategy for saving money in the health care system. ACOs are either fully integrated physician models or Individual Practice Associations. The authors consider the role of hospitalists, more common than during the 1990s, and the article touches on the consequences of payment bundling.

Key Findings:

  • An ACO is a group of providers that coordinates savings among it members; ACO’s carefully select their own mix of providers.
  • For a member provider, an ACO tracks spending and quality of care for all patients.

The managed care system of the 1990s provoked a backlash from providers and patients. This review lays out the basic distinction between managed care and ACOs.

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