4 Reasons to Wait on ACOs

Philip Betbeze, December 16, 2011

Accountable care organizations are the latest craze in healthcare. Why? As usual, it's because the government, the dominant payer, is pushing them. And commercial insurers, some large hospitals, and hospital systems, see them as a promising opportunity to improve healthcare and cut costs at the same time.

But what is an ACO, really? Only the government's two strict and very selective plans offer a road map. But there are many ways to design accountable care. The government's version may ultimately prevail, but there are plenty of hospitals and health systems that wouldn't have designed it that way if they were in charge.

The beauty is, you can be in charge by designing structures with your commercial insurers or by fitting into a plan that the payers have created with your input. The point is, no one's really sure what the winning design will look like, but it costs a lot to develop your prototype.

Another choice: You could simply do nothing at all.

Let me repeat that: You could do nothing at all—for now.

As usual in business—and let's remember that healthcare ultimately is a business—organizations will take the path that they think will ultimately work over the long term. But "long-term" has different meanings to different people.

For a hospital seeking immediate strategic partners, for example, the ACO has to be on the back burner. A well-positioned hospital might legitimately take a wait-and-see attitude, looking for someone else to undertake the risk and expense, only to eye a partnership after that someone else has taken the early slings and arrows.

Philip Betbeze

Philip Betbeze is the senior leadership editor at HealthLeaders Media.


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