Will ACOs Make the Insurance Industry Extinct?

Tags: accountable care organizations | ACOs | insurers | Medicaid | Medicare | payors | physicians

Accountable care organizations could make the American health insurance industry unnecessary by 2020, according to New York Times columnist Ezekial Emanuel.

Mr. Emanuel suggested the importance of insurance companies is already on the decline since most non-elderly Americans work for self-insured companies. In these cases, insurance companies simply process billing claims. Restrictions from payors — such as  prior authorization for treatment — can also complicate and discourage patients' medical care if they are beneficiaries of a private insurer.

Since ACOs will be responsible for large groups of people, this model is likely to take over insurers' territory. It will combine low-cost, healthier individuals with those who are high-risk — avoiding the cherry-picking practices of some private insurers.

"And with the end of fee-for-service payments, insurance companies will no longer be needed to handle complicated billing and claims processing, nor will they need to be paid a fee for doing so," wrote Mr. Emanuel. "Payments can flow directly from an employer, Medicare or Medicaid to the ACOs."    

Mr. Emanuel also said ACOs will drive more competition in local healthcare markets. He noted that consumers would rather choose a primary care physician rather than one of many health insurance plans, with each offering different co-payments, deductibles and out-of-pocket maximums. "Choosing a [physician] and provider group is a responsibility that consumers want to have and are likely to be much better at," he wrote.

"If they don't want to go the way of the dinosaurs, insurance companies will have to find a new business to be in, one that is useful in the new world of coordinated care," Mr. Emanuel wrote in the column. He mentioned WellPoint and Optum as payors that are working to evolve and gain more ground in the provider marketplace.

Related Articles on ACOs:

Physicians Pioneering the ACO: 5 Thoughts From Dr. Gene Lindsey of Atrius Health
Survey: 55% of Payors Plan to Participate in ACOs Over Next 3 Years
Survey: 57% of Hospital Leaders Still Unsure About ACO Participation

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