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The New 'New Thing' In Health Care: Accountable Care Organizations

The moment health wonks and lots of people in the business of providing health care to Americans have been waiting for has finally come.

The Obama administration today released proposed rules that could help hospitals and groups of doctors cooperate more closely in caring for patients. If the approach works, it could save money and improve quality.

These so-called Accountable Care Organizations were made possible in the Medicare program by the new health law, and they've been billed by top federal health officials as a way to improve the coordination of care while lowering costs. Administration officials figure they could save Medicare up to $960 million over three years.

Under the new law, ACOs would agree to manage all the health care needs of a minimum of 5,000 Medicare beneficiaries for at least three years.

How would they do that? Think of it like buying a television, says Harold Miller, president and CEO of the Network for Regional Healthcare Improvement and executive director of the Center for Healthcare Quality & Payment Reform in Pittsburgh.

A TV manufacturer like Sony, for instance, may contract with many suppliers to build sets. Just as Sony does for TVs, Miller says, an ACO would bring together the different component parts of care for the patient — primary care, specialists, hospitals and home health care – and make sure all the "parts work well together."

Critics worry ACOs could give too much power to hospitals and doctors and increase costs.

Jon Leibowitz, chairman of the Federal Trade Commission, said in a conference call with reporters that the FTC would evaluate potential ACOs within 90 days to determine if they would violate antitrust laws."We will vigorously define the anti-trust laws but are committed to making the ACO systems work," he said. "It's a brave new experiment."

Patients will be told by their doctors if they are in an ACO, although being in one doesn't restrict their choice of providers, said Dr. Donald Berwick, administrator of the Centers for Medicaid and Medicare Services.

In a column just published online by the New England Journal of Medicine, Berwick wrote, "Whatever form ACOs eventually take, one thing is certain: the era of fragmented care delivery should draw to a close."

The law calls for ACOs get rolling in January 2012.

ACO Bonus: As Shots noted last fall, some folks have even found dark humor in the complexities of ACOs. Check out this video of a health care executive's search for clues at the help desk.

Copyright 2023 Kaiser Health News. To see more, visit Kaiser Health News.

Phil Galewitz
Jenny Gold