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The Year of the ACO

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The coming year could be the year when “accountable care organizations” (ACOs) get a chance to show whether they will be a fad or a classic.

Health care analysts at PricewaterhouseCoopers L.L.P., New York, have listed the upcoming accountable care organizationtest of the ACO concept as third item on their list of the top 2011 health industry issues.

“Is this the next big thing or not?” the analysts ask.

An ACO is a vehicle for paying teams of health care providers to care for whole patients, instead of paying for care one service at a time.

In the past, the federal government tried to hold down rising health care costs by imposing strict limits on health care providers’ financial relationships with other providers.

The Affordable Care Act, the legislative package that includes the Patient Protection and Affordable Care Act (PPACA), is requiring Medicare to use ACOs starting in 2012, and many private health carriers are now testing ACOs.

Many health care and health insurance organizations are preparing to participate in ACOs in 2011, the PricewaterhouseCoopers analysts report.

“While ACOs hold great promise for reduced costs and improved quality, the challenge will be keeping people in the ACO and engaging them to stay healthy, which could be the difference between profit and losses,” the analysts say.

PricewaterhouseCoopers has found evidence that ACOs will have to take the time to determine which consumers are willing to get their care from ACOs and which are not, the analysts say.

Elizabeth Mills, a senior counsel in the Chicago officer of Proskauer Rose L.L.P., a law firm, ACO organizers still face regulatory challenges.

Federal regulators recently organized a public ACO workshop, and

officials at the Centers for Medicare and Medicaid Services (CMS) have issued a request for comments on some of the themes that emerged from that workshop.

“Physician panelists at that workshop were concerned that hospitals were the ones with the resources to put together the electronic records and other infrastructure to start and operate an ACO,” Mills says in a commentary on the workshop. “They feared that all physicians would wind up employed by hospitals and physicians would not take a lead role in reforming health care delivery.”

Health insurers and health care buyers also expressed concerns about hospitals’ role in ACOs, Mills says.

Insurers and buyers fear hospital-led ACOs may not offer buyers competitive choices.

“Many panelists were concerned that ‘patient-centeredness’ was being downplayed,” Mills says.

In the CMS request for comments, officials are focusing on how to encourage solo practitioners and small groups to participate in ACOs, and how the patient centeredness of ACOs and patients’ experience of ACO care can be measured, Mills says.

Aetna Inc., Hartford (NYSE:AET), says an ACO it has been testing on 20,000 Medicare Advantage enrollees since 2007 seems to be working well.

The ACO program provides personalized care management and support; technology that connects doctors with patient information and medical evidence; and financial incentives that reward doctors who work hard to provide good care for patients with chronic conditions and doctors whose patients’ health improves.

This year, the ACO enrollees have been using 43% less acute hospital care than comparable enrollees in unmanaged Medicare have been using, Aetna says.