Scott Gottlieb, M.D., a fellow at the conservative American Enterprise Institute, suggests in this Health Policy Outlook that the Obama Administration may view accountable care organizations as a replacement for traditional health plans and may be crafting rules that provide ACOs with favorable treatment in health insurance exchanges.
If ACOs contract directly with patients on a health exchange by setting themselves up as entities that resemble staff-model HMOs (similar to the way Kaiser Permanente operates), some may partner with traditional health insurers to re-insure a portion of the risk they will be taking on. But on the whole, the problem with cutting out the health insurers from these arrangements is that consumers will ultimately be left with fewer provider options if they become tied to a local ACO.
The Obama administration believes that the ACOs, and the hospitals that operate them, will invest in new innovations in the delivery of medical care that lead to better coordination of health care services. The trouble with this vision is that hospitals have never been sources of innovation in the way medical care is organized and delivered. Over the last several decades, most of the notable innovations in health care services have been developed in for-profit companies, often run by entrepreneurs and backed by venture capital.
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To say that for profit organizations are the best source of innovation ignores the significant work that has been done in health systems across the country at places like Intermountain Health Care, Geisinger, Baptist Health Care, SSM, and many others. One of the unfortunate properties of for profit organizations is the distribution of profits from these innovations to individuals rather than being driven back into the system to improve access to and quality of care. In an industry with significant problems (still) with access and quality, using profits to enrich individuals at the expense of the system is short sighted and counterproductive. Reinvestment in the industry, such as that required of NFP organizations, would seem to be more important at this point in the history of American health care. Health care leaders and innovators should make a living, not a killing, from their work – at least that’s what the Hippocratic Oath would suggest.
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