ACO: A Simple Break Down

Thanks to Kaiser Health News, we’re able to give you the play by play about three of the most important letters in healthcare: ACO. The Affordable Health Act encourages doctors, hospitals, and other providers to connect with each other, forming the Medicare program’s Accountable Care Organizations.

The main goal: “providers get paid more if they keep their patients well.”

But, what is it?

“An ACO is a network of doctors and hospitals that shares responsibility for providing coordinated care to patients in hopes of limiting unnecessary spending.”

Why does Congress care?

It’s part of a larger movement to reduce the national deficit.

How are they paid?

In the past, Medicare has used a fee-for-service system. You know this: you pay for each medical procedure you get, and it gets expensive. Now, the doctors are rewarded, not based on how many services they provide, but how healthy their patients are.

ACOs can’t completely do away with the fee-for-service method, however, but they can create “savings incentives” or bonuses for healthy patients.

Does this affect me at all?

Not really, actually. The doctors would just most likely refer you to other providers in their ACO connection, but you have the ability to go wherever you want.

Who’s in charge?

“ACOs can include hospitals, specialists, post-acute providers and even private companies like Walgreens.” It’s a connection group, not a corporation.

What about my HMO?

HMOs and ACOs are very similar, but with one important difference: “an ACO patient is not required to stay in the network.”

Is this too good to be true?

Many hospitals are moving towards mergers instead of ACO connections, meaning instead of joining an ACO and forming that connection with a private practice, they’re just buying it instead. This lowers options for patients because they have less private practices to go to, which is usually the cheaper option.

So is this the future?

“’ACOs aren’t the end game,’ says Chas Roades, chief research officer at The Advisory Board Company in Washington D.C.” It’s just an important step.

You can read a much more detailed explanation of ACOs with the same questions here.