Harvard, Berkeley professors: ACOs plagued with cost, legal challenges

Professors from some of the leading universities are skeptical of the touted costs benefits of accountable care organizations (ACOs) and how they will form.

In a paper released last week, Harvard economists Katherine Baicker and Amitabh Chandra question whether ACOs will be tempted to use the latest and expensive technology, reports Kaiser Health News. However, there are time-tested, less expensive solutions, such as aspirin and flu shots, that are underused and might be better options, according to the report.

"[W]e do not know how well ACOs will sidestep cost-ineffective technologies, particularly if the latest shiny innovation increases market share," the authors wrote. "The viability of ACOs will depend on the receptiveness of physicians to capitated payments--some specialists will see their incomes fall and are unlikely to take these cuts quietly. While their concerns may not resonate with patients, they might if providers claim that valuable care is being withheld. Designers of ACOs are therefore keenly interested in measuring ACO performance and patient satisfaction, but current quality measures only capture truly negligent care."

This paper follows another report released last week by University of California Berkeley Law professors about the legal barriers that could stall ACO formation and development, including self-referrals, competition, and tax rules, particularly among safety-net providers.

For more information:
- check out the paper (.pdf)
- read the Kaiser Health News article
- read the CMIO article

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