Accountable Care Organizations: A Health Experiment in Progress

A patient goes to the doctor's office with vague back pain. He gets the most expensive scan on the market, which suggests surgery might be needed. Better be safe than sorry; he has the surgery. But a closer look would have revealed that cheaper physical therapy would have been just as effective.

The dollars wasted on that patient contribute to a key problem with the health care system: soaring costs that haven't been accompanied by a commensurate increase in quality. Obamacare is trying to fix the problem of expensive, unnecessary care in several ways, the most well-known of which are accountable care organizations.

ACOs are groups of providers that have been assigned a projected budget per patient. If the cost of caring for the patient comes in below that level, the group shares the savings. The idea is that doctors will better coordinate care to prevent wasteful or ineffective treatment. Pilot programs suggest the jury is still out on ACOs' ability to drive this kind of behavior.

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Source: National Journal