One of the most talked about yet least explained elements of the Affordable Care Act was how it would create Accountable Care Organizations (ACO). There are supposed to this amazing “new idea” to make health care dramatically better by making it outcome based, but every description of how this vague concept was suppose to worked seems incredibly similar to the old idea of Health Maintenance Organization (HMO).
Obama health care adviser Zeke Emanuel basically admits that ACO’s are nothing more than a plan to rebrand a push for HMO’s in his new book. From his piece in the New Republic:
But because of health care reform, new actors will force insurance companies to evolve or become extinct. The accountable care organizations (ACOs) (which I discuss in Chapter 8 of my new book) and hospital systems will begin competing directly in the exchanges and for exclusive contracts with employers. These new organizations are delivery systems with networks of physicians and hospitals that provide comprehensive care. This health delivery structure is in its infancy. [...]
The key skill these ACOs and hospital systems lack—the skill insurance companies specialize in—is the actuarial capacity to predict and manage financial risk. But over the next decade this is something they will develop—or purchase. After all, actuarial science is not rocket science, even if it involves a lot of mathematical equations. And with that skill, ACOs and hospital systems will become integrated delivery systems like Kaiser or Group Health of Puget Sound.
According to Emanuel ACOs will turn into copies of Kasier Permanente and Group Health of Puget Sound, both which are HMOs. Effectively ACOs are just HMO’s without their own actuarial department and they are being encouraged to acquire actuarial departments.
There is nothing new or innovative about ACOs. They are just another version of New Democrats’ goal to move everyone towards private managed care insurance which was also the heart of the Clinton health care plan.