Accountable Care Organizations: A Quick Explanation

IMG_2089Something is happening in medicine today and you probably don’t have a clue. You have a problem, go to the doctor, pay your co-pay, pick up your medicine, and live another day. Nothing seems to have changed and nothing seems to be amiss.

Something is happening and it’s going on right under your noses. Doctors and hospitals are joining and developing Accountable Care Organizations. It’s not sinister. It’s actually to the advantage of the patient and the system as a whole. It’s about quality over quantity. It’s about measuring the quality of the care provided, saving money for the system, and then the providers share in that savings.

In the simplest terms, doctors get paid to keep you healthy. The healthier you are, the less you cost. A piece of that savings is then passed onto the doctor. You know, like incentive.

Medicare started it and now everyone is doing it. It’s known as the Medicare Shared Savings Program (MSSP) and was established by the Affordable Care Act in 2010 as a response to increasing US healthcare costs. US Healthcare in 2010 cost over 2 trillion dollars. TWO TRILLION. It constituted about 17% of the Gross Domestic Product of the US (up from about 5% in the 1950s).

Healthcare costs have sky rocketed and some of it is because of waste. Doctors and hospitals do not communicate and duplicate tests are performed on the same patient. Patients are prescribed more expensive medications when cheaper ones would be just as effective. Cutting back on waste is one component of the MSSP. The other is providing high quality care.

(I have opinions on the role of insurance and drug company greed as contributors to the high cost of healthcare, but that’s a whole ‘nuther post)

Medicare is measuring the savings and quality of the providers and hospitals by a set of standards called Quality Benchmarks (QBM). There are 33 now (more coming soon). The QBMs must be met by the providers to prove that patients are getting the topnotch care at the lowest cost. You can find a list at:

Quality Benchmarks

Doctors, hospitals, and patients are frustrated with the current system. It is an ever-expanding money monster that is eating up resources and spitting out bankrupt patients and providers. The conversion of a fee for service (see the doctor and pay your co-pay) to a payment model based on high quality, low cost services is the solution. For now.  Patients benefit as providers and hospitals become more accountable to the quality of care that they provide at the lowest cost to the consumer.

That sounds nice doesn’t it?  Unfortunately, the consumer, also known as the patient, has not seen a decrease in deductibles OR premiums.  They still pay the same (or more) for services rendered.  The savings garnered from eliminating the waste in medicine is being passed onto the insurance company and they are making a fortune.  They are giving a few scraps to the physicians and hospitals to appease them.  All the while the money monster continues to get fat.  More on the money monster coming soon.

The Money Monster

What About the Drug Company?


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