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Accountable Care Organizations: Better Coordination, Better Outcomes

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Most people agree that in many ways the U.S. medical system is a convoluted and complex mess, with too much waste and too many gaps. So is there a way for this system to provide better care and at the same time keep costs under control? In theory, the answer is yes – but in practice it’s a bit more complicated.

One of the provisions in the Affordable Care Act was the creation of what are called Accountable Care Organizations, or ACO’s. These arrangements were based on a simple premise: the idea that patients get better care, and have better physical and emotional outcomes, when multiple doctors and hospitals actually coordinate their efforts and regimens. Not only that, but the health care system saves money at the same time. Millions of Medicare beneficiaries may already be covered under an ACO and not even know it.  But whether they know it or not, their ACO – when it’s working correctly – could be helping them get better care at lower cost. This is one reason why, even while the Affordable Care Act (a.k.a. Obamacare) is under attack in Washington, D.C., the continuation of the ACO seems likely because it’s one feature both sides seem to agree on.

To explain a bit about what Accountable Care Organizations are and why you should care, we offer two articles, including this one that just appeared on the website of USA Today. It spotlights a woman whose life was saved because of the coordinated care she received through her membership in Kaiser Permanente, which the article describes as “a more established form” of ACO. What makes this woman’s experience unique is that all the specialists she sees for her many ailments are actually employed by Kaiser, and Kaiser is the insurance company to which she pays her monthly premiums. “That means,” says USA Today, “[that] Kaiser loses money if her conditions aren’t managed correctly. This financial incentive is supposed to lower the cost and improve the quality of care.”

The concept of the ACO makes sense, and is designed to overcome the burdensome and leaky system in which the insurance company seeks only to lower costs of care while specialists who are disconnected from one another perform procedures and prescribe drugs with little communication with each other and insufficient regard for the patient. But the woman featured in the USA Today article, named Robin Gladden, “has nothing but good things to say about the quality of her Kaiser care. It’s her experiences outside of Kaiser that have turned her into a believer in both Kaiser and wellness.”  Before receiving treatment under the Kaiser ACO, “Gladden’s care depended on the often-contradictory advice of various doctors, which led her to develop diabetes, she said. She also experienced a very painful medication error in a non-Kaiser hospital when she went to have her thyroid removed because of her thyroid cancer.” However, because Kaiser treated Gladden’s health “holistically, not episodically,” her experience and her health have changed dramatically for the better.

To get a bit more background on the ACO concept, we turned to this explanatory article from a few years ago on the website of Kaiser Health News.  By creating the Accountable Care Organization structure, the Affordable Care Act “takes a carrot-and-stick approach,” says Kaiser. “Providers make more if they keep their patients healthy.” According to the Kaiser report, “An estimated 23.5 million Americans are now being served by an ACO. You may even be in one and not know it.”

Like an HMO, doctors and hospitals in an ACO will generally refer patients to hospitals and specialists within the ACO network. But unlike at HMO, “patients are usually still free to see doctors of their choice outside the network without paying more,” Kaiser explains.  Patients who don’t want to share data among ACO members can decline if they wish.  ACO members “can include hospitals, specialists, post-acute providers and even private companies like Walgreens. The only must-have element is primary care physicians, who serve as the linchpin of the program.”

So is there any downside? One worry among health care experts is that this level of consolidation will ultimately increase the rate of mergers and acquisitions, and decrease patient choice. Hospitals, says Kaiser, “are joining forces and purchasing physician practices, leaving fewer independent hospitals and doctors. Greater market share gives these health systems more leverage in negotiations with insurers, which can drive up health costs and limit patient choice.” But another health care analyst says this merger trend is already accelerating and he doubts whether the adoption of ACO-type structures will have much impact.  He calls health care mergers “a powerful and pervasive trend” and “a serious public policy issue” with or without the spread of the ACO.

Saving money is all well and good, but here at AgingOptions we’re more concerned that our clients and radio listeners get the care they need and deserve. For that reason, as we read the Kaiser Health News article, this quote from one health care researcher caught our eye. “One of the key challenges for hospitals and physicians is that the incentives in ACOs are to reduce hospital stays, emergency room visits and expensive specialist and testing services — all the ways that hospitals and physicians make money in the fee-for-service system.” In other words, reading between the lines, if your doctors and hospital are part of an ACO, they may be tempted to cut corners on your care in order to save costs. This is one reason why we strongly urge you – especially if you or a loved one is facing hospitalization – to consider using the services of a professional care manager. This professional will be your advocate and adviser during your stay and at the time of your discharge from the hospital, making sure you’re getting all the care you need during your stay and working on your behalf should you require a rehabilitative stay. We strongly encourage you to contact us here at AgingOptions and allow us to refer you to a care manager, to make certain your interests and those of your loved ones are protected.

At the same time, if retirement planning is on your horizon, we invite you to come join Rajiv Nagaich soon at one of our AgingOptions LifePlanning Seminars. Here you’ll discover how finances, medical care, housing choices, legal protection and family communication are all woven together into one seamless plan called a LifePlan. It truly is a breakthrough in retirement planning! Click here for details and online registration, or call us during the week and we will gladly answer your questions. We hope to see you soon!

(originally reported at and

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