3 Key Deficiencies of ACOs From the Heritage Foundation

The Heritage Foundation listed three key deficiencies of accountable care organizations and suggested market innovation would be a better solution, according to a Heritage Foundation report.  

The report, titled, "Why Accountable Care Organizations Won’t Deliver Better Health Care—and Market Innovation Will," cited the following deficiencies of ACOs.  

1. Consumers are not empowered to be stakeholders in their own care. "Taking the patient-consumer out of the equation undermines any attempt at creating true accountability for health care decisions," the report said. Rather than impose "artificial incentives to improve quality and performance," ACOs should give consumers a stake in it so that they will choose the best, most cost-effective providers.

2. Providers don't have sufficient accountability. Though providers are eligible for a shared savings bonus, they will continue to receive fee-for-service payments, encouraging them to "continue delivering an excess of services so that they can maximize their return," the report said. In ACOs, "providers have an incentive to 'intervene' and 'do something' as opposed to engaging in thoughtful discourse and collaboration with patients."

3. Large organizations have an unfair advantage.
The ACO is "a single, untested, and vague model that is largely hospital-centric," the report stated. "Larger, more complex organizations have an unspoken advantage." This means that "large delivery systems are, once again, able to claim or consolidate their hold on substantial portions of their markets, resulting in less competition."

Instead, the report advocated a model that would require accountability for primary care providers, specialists, healthcare institutions and patients. The report includes the following key concepts:

• Primary care providers would be responsible for "reassuming their traditional role as gatekeepers of patient care by collaborating with providers in other tiers, ensuring mutual accountability, and emphasizing prevention and primary care."

• Hospitals would be "responsible for monitoring and managing progress by setting goals, assessing individual performance and creating internal initiatives to promote collaboration and good practices."

• The model would reward "specialists that demonstrate a commitment to the care continuum, an emphasis on primary care and prevention, cost efficiency and increased quality of needed services."

Read the Heritage Foundation report on ACOs (pdf).

Read more coverage of criticisms of ACOs:

- Former HHS Official Says ACOs Are a Joke

- Should Specialists Join ACOs?

- Proposed Rule Assumes Most Beneficiaries Won't be Assigned to ACOs

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