Report questions ACOs' cost-effectiveness for providers

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Accountable care organizations could very well improve the quality of healthcare, but incentivizing lower spending also could cause providers to cut corners, a new report suggests.

ACOs could be “the next great hope for many” — authors of a new research paper from The Urban Institute state in “Accountable Care Organizations in Medicare and the Private Sector: A Status Update.” But they might not be able to offer savings for participants or Medicare.

It should not take more than three years to determine ACOs' cost-effectiveness, the authors predict.

“By the end of 2012, we should know how successful [CMS's] program was in attracting provider interest in the ACO model in Medicare, and how extensively the private sector plans to experiment with this payment model,” the paper states. “Within a few years after that, we should have a much stronger evidence base about how to improve quality and reduce costs using ACO-style payment arrangements, given the experiments that Medicare and private sector providers and payers are currently embarking on.”

Click here to read the paper in full.

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