As a Public Health graduate student, I'm often asked to elaborate on ACOs. While the catchy acronym has graced many newspaper titles, the public is still hazy on what an ACO would actually accomplish. The best analogy for an ACO comes from Harold Miller, president and CEO of the Network for Regional Healthcare Improvement and executive director of the Center for Healthcare Quality & Payment Reform in Pittsburgh. He compares healthcare and ACOs to SONY and television sets. When someone decides to buy a new tv, they buy the entire product in one place. ACOs will attempt to do the same with healthcare. Instead of going to different institutions for various medical needs, patients will be able rely on a one-stop-shop. This will incentivize all stake holders partaking in healthcare to cooperate and reduce costs. This will also tackle the redundancy often observed through unnecessary repetition of exams. ACOs will be launched for Medicare beneficiaries as well as private insurance beneficiaries in January of 2012. Proponents of the creation of ACOs point to the fact that it will lead to cost reduction in Medicare which is a big driver behind the current deficit. While the fee-for-service system will still be in place, savings-sharing incentives will encourage cost reduction and quality improvement.
