ACOs and unicorns: Lovely but elusive

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Karen Cheung

 Karen M. Cheung


Like many young girls, I used to want a unicorn, until I realized they didn't exist. Then I wanted a horse, until I realized that a little thing called money (and practicality) meant that wasn't likely to happen, either.

The healthcare world still views the elusive accountable care organization (ACO) like the mythical unicorn--often talked about but never seen. Time and money are big barriers to the new pay-for-performance approach, which aims to change the current fee-for-service system. And when the original plan doesn't work, hospitals adjust their expectations on cost savings and patient outcomes or simply try harder.

I hear words like "revolutionary" and "care coordination" in reference to ACOs, but at the same time, clinicians and even hospital executives utter more derogatory descriptions, likening them to "pigs in lipstick" or "HMOs in drag."

After all, if it looks like a duck and quacks like a duck, it must be … an HMO with different initials. Or so say our most vocal FierceHealthcare readers. Many who comment on our ACO stories have a been-there done-that attitude and fear that ACOs would fail just as the early 90s approach to managed care did.

I hear opinions that range from enthusiastic support to ambivalence to disdain for ACOs, with heavier emphasis on the disdain. Be it through the Center for Medicare & Medicaid Innovation or commercially developed, ACOs are the target for some harsh criticism.

For example, some FierceHealthcare readers worry that ACOs are tantamount to monopolies. With giant hospital systems partnering with other providers or insurers, people fear that ACOs stifle competition and that organizations could collude to "fix" healthcare prices:

"The move towards ACOs will result in monopolies and oligopolies in each geographic healthcare market. Customers lose when competition is reduced."

"ACOs are anti-competitive. Of course they are; the model depends on it. That is yet another reason why ACOs are doomed to fail."

"ACOs will escalate costs wildly unless the menace of double payment for same services rendered in hospital compared to outpatient settings is fixed. I am referring to facility fees tagged onto service fee for anything done by employees of a hospital owned 'non-profit arm.'"

Others noted that physician alignment wasn't quite there, with one reader calling ACOs a "control freak's beast." The commenter continued:

"Physicians were never asked about ACOs. They are unaccountable, bureaucracy-driven wealth redistribution schemes, which were a baited trap set by the government to lure in unsophisticated and greedy hospital CEOs, who were salivating to get control over doctors. Why in the world would doctors support them?"

Still, others pointed to limited patient choice as a reason for giving ACOs a thumbs-down.

"If a medical service is available outside the ACO that is cheaper or of better quality, the patient won't be referred there. The patients lose. The public loses. ACOs benefit."

Most people aren't likely to argue against costs savings and better patient care--who doesn't want America to be healthier or the American healthcare system less wasteful? But ideas diverge on how the country will get there. As providers join the Medicare Shared Savings Program, the Pioneer Program or their own commercial ACOs, they will continue to experiment with the new methods for coordinated care and payment systems. Why? Because health reform calls for it.

Even if skepticism ensues, I still hold out that the healthcare industry will revamp patient care. Will the healthcare industry ever capture the mythical unicorn? I hope so. –Karen (@FierceHealth)

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Why ACOs are still a hard sell
Physician alignment is biggest obstacle to ACOs