The President’s health care reform bill includes numerous pilot projects and demonstration programs designed to test ways of lowering health care spending and improving quality. One such pilot program is Accountable Care Organizations (ACOs), the latest fad among health policy wonks.
Backers expect ACOs to raise the quality and lower the cost of patient care simultaneously. Detractors, on the other hand, describe them as “HMOs on steroids.” What’s the truth?
Would You Buy This Car?
As is so often the case in health policy, the clearest way to think about this topic is to imagine applying the concept to some other good or service. Consider automobiles. What would it be like to buy an automobile from an Accountable Car Organization (ACO)?
For starters, you wouldn’t buy the car yourself. You would turn some of your money over to an entity (employer, insurance company, government, etc.) that would buy the car on your behalf. It would do so by agreeing to pay an auto ACO a fixed price per car and requiring certain minimum quality standards.
For example, the auto ACO might be required to produce automobiles that meet a minimum fuel economy standard and use a certain fuel. Cars would come equipped with a toddler protection system that disengages the ignition if your kid is not safely buckled and strapped in the backseat, and a costly device emitting a loud siren if you try to leave him in the car unattended.
The car could feature an I-brake-for-animals sensor that spots them before you even know it’s there and brings your vehicle to a screeching halt. An airbag woul