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Fairy Tales, ACOs and More with Michael L. Millenson

Michael L. Millenson, President of Health Quality Advisors LLC, joins me on ACO Watch: A Mid-Week Review, on April 28th, 2011 at 11AM Pacific and 2PM Eastern.

Millenson channels sentiments of the ‘bearish camp’ on ACO viability recently via a piece he authored titled “ACO Fairy Tale Faces a Rumpelstiltskin Moment‘. A portion of which is below:

The ACO fairy tale is drawing perilously close to an unhappy ending.

The government’s long-awaited draft regulations on Accountable Care Organizations have brought a dose of ugly reality to a concept that’s always seemed coated with a patina of pixie dust. Unless those regs are substantially changed before the clock strikes Jan. 1, 2012 — the statutory date for ACO implementation — Cinderella’s going to turn back into a scullery maid and the horse-drawn carriage transporting her to the Health System Transformation Ball will be revealed as nothing more than four mice and a pumpkin.

The essence of the ACO concept is using financial incentives to reward doctors and hospitals for redesigning care processes to provide “high quality and efficient service delivery,” in the words of the Patient Protection and Affordable Care Act. As I wrote last fall, ACOs have been the one reform beloved by Republicans and Democrats; doctor groups and insurance companies; policy wonks and profit-seeking capitalists. This unusual unanimity was due in part to a lack of specifics that enabled every stakeholder to gaze upon the ACO and see reflected their very own version of Prince Charming.

Conservatives hail the ACO as marketplace medicine, while liberals focus on organized systems of care replacing fee-for-service chaos. Providers applaud a reform that places them at its center, while health plans know that providers asked to bear financial risk — if an ACO doesn’t measure up, the government won’t pay up — will seek out actuarial experts like them as partners. ACOs also are expected to require the products and services sold by a host of consultants and entrepreneurs.

For medical groups and hospitals considering becoming an ACO, Medicare offers a straightforward risk-reward proposition. Providers must invest considerable resources in…. (read complete article, here).

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