Why Do We Need ACOs and Insurance Companies? Part 3. The HMOs Strike Back!!!

By KIP SULLIVAN, JD This is the last installment in a three-part series that asks why we need both an insurance industry and an ACO industry. We are now stuck with the worst of all possible worlds – an inefficient insurance industry layered on top of an inefficient ACO industry. I noted in Part I of this series that ACOs’ inability to cut costs explains why 90 percent of Medicare ACOs refuse to accept anything resembling insurance risk. In Part II I discussed ACO proponents’ expectation that many ACOs would accept full insurance risk, and I described the Medicare Payment Advisory Commission’s (MedPAC’s) reaction to ACOs’ inability to cut costs and their unwillingness to accept insurance risk. We saw that MedPAC attempted to design a plan called “premium support” that would generate competition between Medicare ACOs, Medicare Advantage plans, and the traditional Medicare fee-for-service program, and, after four years of trying (and even after dropping the FFS program from the project), gave up. In this last installment I review a nearly identical attempt by Minnesota’s Medicaid program to set Medicaid ACOs and HMOs on a level playing field. I will close with a prediction of where the ACO industry is headed. Minnesota mimics Obamacare and MedPAC Within a few weeks after President Obama signed the Affordable Care Act, Minnesota’s then-governor Tim Pawlenty signed a bill containing ACO provisions lifted almost verbatim from the ACA. [1] These provisions req...
Source: The Health Care Blog - Category: Consumer Health News Authors: Tags: Uncategorized Source Type: blogs