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Are ACOs Really Different from HMOs?

Greg Freeman, November 27, 2013

Some providers and insurers will be able to make the ACO system work for a few years, but eventually the financial pressures will force providers to opt out and many of the ACOs will fold, Amerling predicts.

"Companies are going to jump on board and hope to make money as long as they can, but ultimately things start to play against you," he says. "The fact that in the demonstration project several of the providers who tried it lost money, that is a warning sign. When you try to apply this generally it's going to be a money loser."

Even aside from the cost concerns, Amerling has no faith in the ACO model to improve quality of care. Seriously ill patients will still need care that keeps them from falling through the cracks and costing more than necessary down the line, he says.

"Nothing does a better job at that than a fee-for-service model," he says. "When I have a patient with unstable angina, I can get them cath-ed the same day. When that mechanism is not available in an ACO, we're going to be delivering late and untimely care, which is inevitably worse and more expensive."

Amerling recalls the recent effort to decrease costs for dialysis by bundling the costly hormone erythropoietin (EPO) into the reimbursement. For that reason, and because of clinical data supporting the reduction of EPO, dialysis providers started using less of the medication.

"So they were getting somewhat of a windfall until the government caught wind and wanted to cut the reimbursement for the bundled rate," he says. "It's the same sort of thing with ACOs. They're going to give a bundled payment to cover everything, creating a huge incentive to get only healthy people. When that cuts costs for that type of treatment, the government will say it only makes sense to lower the reimbursement."

The bottom line for physicians, Amerling says, is that they will not be able to increase revenue by doing a better job.

"They are essentially going to be salaried in a lot of these organizations, and they will have the incentive to do the minimum rather than the maximum," he says. "There's nothing in it for them to go the extra mile. They are going to be squeezed by the administrative staff at these ACOs, and there are going to be a lot of administrators necessary to run these things."

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1 comments on "Are ACOs Really Different from HMOs?"


Robert Burden (12/2/2013 at 12:11 PM)
This is exactly what I would expect someone in his position to say. He needs to look around a bit more. There are ACO like organizations that work on a very different model than the one he discribes and are patient focused. There is more than enough waste and abuse in the system that can be better used in turn to provide all the needed care and still save this nation significant money and improve our health status at the same time. Seems like a very self-serving and uneducated article.