Accountable Care Organizations or Accountable Scare Organizations?

Industry Insights from Paul Meade, M.Sc., MPH

There has been a lot of talk lately of a new form of healthcare delivery known as “accountable care organizations” (ACOs). And while it may seem as yet another type of managed care organization, these ACOs are attempting to introduce the element of quality balanced with fiscal responsibility and cost containment. Undoubtedly, this is a noble attempt at bringing quality healthcare at an affordable level to patients within the United States. Actually, who could argue with affordable, quality healthcare based on sound outcomes research and cost-benefit analysis? So where is the scare?

Could the concept of an ACO be a variation on the theme of capitation that we saw in the 80s? The basic principle is for healthcare providers to deliver the optimal healthcare within a specified budget. So what’s the difference? Well, the old capitation model was based on responsible economic principles; deliver the best healthcare you can with the money you’ve got. The problem was that in order to meet the capitation hurdles, many providers simply under-delivered services, so a short-term gain often resulted in a long-term loss. Also, quality initiatives and health outcomes research was still in its infancy, so finding the optimal healthcare solution was often a hit-or-miss situation. But today, there are better quality measures based on outcomes research that enable providers to make balanced clinical-economic decisions. So again, I ask, what’s to be scared about?

We have spent over a hundred years formally training physicians in the United States to administer whatever healthcare is needed to restore a person’s health, and for the most part without regard to cost. The amount of formal training devoted to providing optimal care by balancing quality with cost is minimal, and a fairly recent endeavor at best. So just because a healthcare provider network reinvents itself to focus on getting the quality and cost mix right, that doesn’t necessarily mean it has the right set of skills to achieve such noble objectives. Thus, the scary part is the concern over healthcare providers simply denying adequate clinical intervention in order to meet the cost containment objectives.

Balancing quality with cost can be as much of an art as it is a science, but formal training in quality measures and health outcomes research is important in working towards such a goal. So, if an ACO has a group of providers who have received some formal training in balancing the clinical/financial act, and can deliver the optimal care for the right amount of money without sacrificing care, then it should have the formula for success. If the group is simply wishing to create a new organization to take advantage of market dynamics and their members lack some of the formal training required to achieve success, then this could quickly become an “Accountable Scare Organization.”

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