Even worse, because the negotiated rates for services is so much lower than the non-insured rates for those services, many providers may actually provide services more liberally than necessary to make up for the lower revenue of each service rendered.
Eventually, I believe the only way to really address the problem of healthcare costs is to adopt the results-based compensation structure already successfully in use in Britain. Unfortunately, such profound systemic changes will be tremendously difficult to implement in the U.S. In the meantime, therefore, the ACO concept may be the most viable means of incentivizing healthcare cost reduction on the part of providers as well as patients.
Relevance to Risk Management Concepts
Another aspect of increased flexibility associated with ACOs in comparison to HMOs is that ACOs encourage patients to utilize network providers but also permit...
This, however, also represents the greatest risk of its failure. Patients can be encouraged to select network providers by coordinating their premium payments with those choices so that patients who refrain from going out of network pay lower premiums than patients who choose to go out of network. However, the fiscal savings that are the primary benefit of the system depend on a high degree of voluntary patient compliance. Precisely because ACOs allow greater flexibility that HMOs, this also is their greatest risk of failure should patients lack confidence in the system. To mitigate this risk it is likely essential that ACOs provide incentives for voluntary cost-savings choices that are sufficient to overcome the resistance of patients to submit to yet another healthcare system acronym that is supposed to solve the nation's healthcare problems.
