The Future of Reform: Fleshing Out the Rules for Accountable Care Organizations

Today, the Obama administration released newly revised rules for “accountable care organizations” (ACOs) that are designed to persuade hospitals, doctors, and other health care workers to collaborate in providing better value for our health care dollars. In an ACO all providers involved in treating a particular patient or condition share a single flat fee. That fee will be higher if they succeed in achieving better outcomes for less, lower if they fail. In other words, providers are being asked to share in the risk that patients and payers now face when they agree to undergo treatment—or to pay for it. The lump sum payment creates an incentive for hospitals  and doctors to work together to achieve the best possible results. They will win the wager only if they co-ordinate care.

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