1. ACOs: Can We Have Our Cake and Eat It Too?
Professor Jessica Mantel
University of Houston Law Center
Seton Hall ACO Symposium

2. “[T]he basic underlying premise of health care reform is to decrease cost and improve quality at the same time by moving off of fee-for-service and moving much more toward reimbursement based on quality and outcomes.” Senator Max Baucus (D-MT)

3. “In reducing excess expenditures, [ACOs] should continually improve the quality of care they deliver ” CMS Propose Rule Fed. Reg (4/7/2011)

4. Strategies for Lowering Costs
Lower Administrative Costs
Eliminating Waste
Better Patient Care for the Chronically Ill

5. ACO Advantages ACO’s Motivation: Financial Incentives
ACO’s Resources and Capacity:
More capital and economies of scale
Electronic health records
Data analysis
Coordinated care
Management expertise

6. Reasons to Be Skeptical
Some “wasteful” care potentially beneficial
Hard to eliminate interventions of marginal/uncertain value
Malpractice concerns
Informed consent rules
Competition for patients
Medical professional ethics and culture
Preventive care and disease management programs not cost-saving

7. Long-Term Challenges
The Long-Term Challenge: Cost pressures from new technologies requires new cost-savings
The Problem: Harder to generate new cost-savings over time

8. Underutilization Concerns
Financial incentives to skimp on care
Limitations of quality measures

9. Conclusions Skeptical ACOs can both improve quality and lower costs
To lower costs long-term, ACOs must ration health care

10. Future Issues
The Challenge: How do we ensure that ACOs allocate care appropriately and equitably?
Legal and Regulatory Issues:
Malpractice system: will it distort ACO’s allocation?
Regulatory oversight: is it necessary?
Monitoring/audits
Parameters for ACOs’ financial arrangements
Requiring ACOs be not-for-profits
Civil rights protections for patients