Wednesday, July 1, 2015
Accountable Care Organizations: The Next IRS
The invention of the ACO is associated primarily with one man – Dr. Elliot Fisher, director of the Center for Health Policy Research at Dartmouth Medical School.
Fisher’s statement that he can invent rules for assigning patients to doctors and doctors to hospitals is no more or less logical or useful than the statement by the inventors of the Kevin Bacon game that they can assign a Kevin Bacon number to virtually any actor.
Elliott Fisher, shown here with Dartmouth Atlas founder Jack Wennberg, is credited with coining the phrase Accountable Care Organization.
By Kip Sullivan, October 2010
The “accountable care organization” (ACO) is the latest fad in American health policy. It remains an unknown concept to the vast majority of the public, including most doctors, but it is all the rage among health policy analysts as well as lawmakers who sit on heath policy committees in Congress and in state legislatures.
Although the assumptions used by ACO proponents to justify ACOs have been around since the dawn of the HMO movement, the ACO label is relatively new. It was invented late in 2006 during a discussion at a public meeting of the Medicare Payment Advisory Commission (Medpac). The seminal article announcing the concept appeared in December 2006. By 2009 the ACO had become so fashionable among congressional Democrats it was mentioned in all three draft health care “reform” bills prepared by Democrats during the first half of 2009 (two of those bills originated in the Senate and one, the Tri-Committee bill, was written in the House). The ACO movement’s crowning achievement to date is the inclusion of ACO provisions in the final “reform” legislation – the Patient Protection and Affordable Care Act (PPACA)
The History and Definition of the “Accountable Care Organization”
The principle difference between HMOs and ACOs, at least for the foreseeable future, will be their size. Whereas HMOs, like most insurance companies, generally have enrollees in the hundreds of thousands, the ACO has so far been defined as having a much smaller number of enrollees, possibly as few as 5,000 (that’s the minimum number of Medicare beneficiaries who must be in an ACO according to PPACA’s Section 3022). The other major difference between HMOs and ACOs, at least for the near term, will be the extent to which they bear insurance risk. Whereas HMOs function like insurance companies (they bear 100 percent of the risk that the premiums they charge will not be enough to cover all necessary services for their enrollees), ACOs will bear little or no insurance risk for the first few years. However, judging from published papers by Elliot Fisher and other proponents of ACOs, proponents want ACOs eventually to bear all insurance risk, just as HMOs have.
By Grace-Marie Turner and Thomas P. Miller Overview
Portions of this blog were taken from publications from PHNP, Physicians for a National Health Program