Obamacare’s Accountable Care Organizations Leave Much to Be Desired

Kathryn Nix / May 24, 2011

As the debate heats up over how best to control runaway Medicare spending, one provision of Obamacare has received growing attention.  The new law creates accountable care organizations (ACOs) primarily to address fragmentation and rising costs in the health care system, but supporters tout ACOs as a key solution to Medicare’s looming insolvency.  As more details come to light, however, government establishment of ACOs appears to be more difficult than purported.

Writing for The Heritage Foundation, Rita Numerof, Ph.D., explains:

ACOs are merely the latest in a long history of health policy ‘silver bullets.’ Since the 1970s, Congress and successive Administrations have promoted a number of mechanisms to control rising health care costs, including the introduction of Medicare hospital payment formulas based on fixed payments for hospital services (payments for diagnostic related groups of services, or DRGs), as well as health maintenance organizations (HMOs) and preferred provider organizations (PPOs). Costs have continued to rise despite these efforts. At the same time, concerns about fragmentation of care and diminished quality have increased significantly.” (more…)