Is Accountable Care Really Healthcare Reform?

Some years ago I taught a course called Financing Healthcare and I took great pleasure in shattering my idealistic students’ thoughts that there was some grand design behind the American health care system. By the end of the semester they were agreeing that what we had was a result of financial incentives. Form follows dollars. While I try not to live too much in the past this experience raises the question; “is accountable care really healthcare reform or payment reform”. My bias is for the latter.


Few will argue that we must address the issue of the cost of care. Workers are being asked to pay an ever-increasing share of their medical benefits, companies are struggling to even provide health benefits, and Medicare will be bankrupt in not too many more years unless something drastic is done. If we can’t shift more costs to works and employers are unable or unwilling to cover a larger share of the costs, and politicians are not prepared to cut the benefits promised to our seniors then what is the alternative? Make cuts look like a new approach to care.

Capitation is not new. It’s been around for decades and it works. Care gets managed. The problem is that for capitation to work there has to be rules that require patients to see certain doctors, limits on what services are covered, and penalties for those that don’t comply.

Accountable care is Global Capitation. A fixed amount is meant to cover all the care needed by a specific group. Unfortunately the models that are being considered allow patients to “leak” out of the program, like a PPO. This risks the very concept of managing care. Patients will always opt for freedom of choice (think about the popularity of gatekeeper HMOs).

Before you rush to create or join an Accountable Care organization consider the significant financial risks if your patient population can seek care outside the collaborative network and you then need to pay the bill. We need accountable care (or whatever you want to call it) if we want affordable care but we need to “get real” and understand that lower cost results from tighter control of the care process. Be vocal if you see model proposals that put all the risk on you.