KHN Morning Briefing

Summaries of health policy coverage from major news organizations

ACOs Raise Hope But Also Questions

News outlets report on accountable care organizations.

The Wall Street Journal: "Spurred by incentives in the federal health-overhaul law, hospitals and doctors around the country are beginning to create new entities that aim to provide more efficient health care," called ACOs. "But these efforts are already raising questions about whether they can truly save money, or if they might actually drive costs higher. In Arizona, Tucson Medical Center is forming a company that the hospital will own jointly with local physicians' practices. The joint venture will aim to sign contracts with insurers and Medicare to earn financial rewards if it saves health-care dollars." But "[s]ome critics are raising concerns that the new organizations may risk increasing costs, particularly when they involve hospitals bulking up through mergers, acquiring doctor practices or hiring more doctors to better coordinate care. Hospitals are often paid more than doctor-owned clinics for certain outpatient services and imaging" (Mathews, 11/28).

In the meantime, American Medical News: "Health insurance companies are trying to figure out where they fit in with accountable care organizations. Executives gathered for trade group America's Health Insurance Plans' annual fall forum in Chicago Nov. 8-10," where they discussed some of "the potential pitfalls and practical conundrums" of ACOs. "Though ACOs are primarily defined as cooperative agreements between hospitals and physicians, health plans are keenly interested in the model and need to keep on top of developments because they will be the ones to reimburse the new entities for care" (Berry, 11/29).

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