Short Takes On News & Events

Are ACOs Doomed To Fail?

By Jenny Gold

November 5th, 2012, 4:40 PM

Accountable care organizations are widely touted as one of the most effective cost-containing measures of the 2010 federal health law.

Yet they have a great deal in common with the integrated delivery networks of the 1990s, leaving some wondering whether the bold experiment might come to the same disappointing end.

“I don’t think these things are going to work,” says Lawton R. Burns, who wrote a Health Affairs commentary on the topic along with his colleague Mark V. Pauly of the University of Pennsylvania’s Wharton School. “ACOs in the end are going to end up costing more money and not necessarily deliver on the quality either.”

Both ACOs and the Clinton-era integrated delivery networks aim to create a care continuum by linking hospitals with physicians and other providers, explain Burns and Pauly. They share the goal of lowering spending while also improving the quality of medical care provided and the health of the population in the program—the so-called “triple aim” laid out in an earlier article by Dr. Donald Berwick, a former director of the Centers for Medicare & Medicaid Services.

“The integrated delivery networks of the 1990s did not deliver on their promises,” in part because they lacked information technology and claims data, overpaid providers for their practices and failed to coordinate care for the chronically ill, Burns and Pauly write.  This time around, ACOs may benefit from updated information technology systems, new alternative payment methods such as shared savings and bundled payments, and an emphasis on reducing waste in the system. In many cases hospitals are also employing individual doctors, rather than paying top dollar to purchase entire practices.

Yet one by one, they dismiss claims that provider alignment, care coordination, disease management and health information technology are likely to yield significant savings. “The ACO model is comprised of several pillars, and all of them are very shaky,” says Burns. The evidence base “just doesn’t show much support that ACOs will reduce cost.”

It will also be difficult to keep patients from seeking expensive out-of-network care, and the primary care physician shortage may mean there simply aren’t enough to take a leading role in the networks. And even if they are, it’s unclear “whether primary care providers can accurately identify complex patients in need of coordinated care.”

Despite high hopes from the Obama administration and industry alike, “there is still no firm evidence that anyone knows how to achieve the Triple Aim,” which was long considered an inevitable “iron triangle” of trade-offs among cost, quality and access, Burns and Pauly conclude. “Recent evidence illustrates one crucial point: Improving quality for some conditions often increases costs.”

Burns and Pauly’s commentary is one of nine articles on ACOs and patient-centered medical homes in the most recent issue of Health Affairs.

One Response to “Are ACOs Doomed To Fail?”

  1. Becky Horton says:

    Although ACOs could improve quality of care in theory, they will not address the significant growth of our healthcare spending. It will encourage consolidation and less competition, leading to monopolized higher prices, and less choice for consumers. Read more here-http://bit.ly/OWsY1L

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