In case you do not know, or more realistically, find the endless stream of acronyms related to healthcare mind-numbing, ACOs (Accountable Care Organizations) are a vital component of the Affordable Care Act (ACA), creating a marriage between hospitals and providers intended to work together to deliver more efficient higher quality healthcare. Researchers at Dartmouth are widely acknowledged as among the creators of the ACO model.
The Dartmouth model, described a decade ago, sought to slash costs by advocating a departure from the traditional fee-for-service system. Naturally, the hope of any new health care delivery model is to improve quality. Dartmouth was able to achieve both goals. Medicare costs decreased significantly, and quality improved. Surely that is a victory for the ACA and ACOs, right?
Dartmouth, creator of the ACO, has learned that cutting costs and boosting quality does not guarantee success for its ACO. Under the ACO model, federal benchmarks for costs-savings proved insurmountable for Dartmouth. That is right - Medicare penalized Dartmouth, creator of the ACO, because Dartmouth could not save enough money! Click here to learn about Dartmouth’s decision to drop out of the ACO program. This move, which is not surprising given other observations of ACOs in action, does not bode well for the future of ACOs. In this drama, Dartmouth is best cast as a modern Prometheus, much like the character described by Mary Shelley. Dartmouth had a vision, and seeing its vision take form, was overcome by its own vision.
Those seeking to establish or expand ACO services should take heed of this turn, lest the hubris of ACA proponents who push ACOs so strongly consume us all.