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Are ACOs the new HMOs? Posted: November 2nd, 2011

By Maryalene LaPonsie

Accountable care organizations (ACO) are generating significant interest as a cost-saving medical insurance model. A survey by consulting firms Aon Hewitt and Polakoff Boland found many employers are interested in learning more about this new type of health insurance coverage.

The Patient Protection and Affordable Care Act stipulates that an ACO must manage all the health care needs of at least 5,000 Medicare beneficiaries for at least three years. According to estimates from the Department of Health and Human Services, the use of ACOs could save Medicare up to $960 million in the first three years. However, there seems to be no definite consensus as to how these health insurance plans will work.

Essentially, ACOs operate similarly to health maintenance organizations (HMO). With an HMO, a patient generally sees his or her medical care directed through a primary care physician. ACOs similarly require patients to coordinate care through a network of hospitals or physicians. One important difference, as reported by NPR, is that ACOs do not require patients to receive only in-network care.

Employers ready to look at ACOs

The Aon Hewitt/Polakoff Boland survey asked employers for their perspective on ACOs and found most are ready to explore the cost-saving possibilities of these health insurance plans. Of respondents, 65 percent said they are interested in ACOs.

Still, many survey respondents have concerns about ACO implementation. Issues of concern cited by survey respondents include:

  • Quality of care: 82 percent
  • Ability to manage the total cost of care: 81 percent
  • Patient outcomes: 66 percent
  • Plan/provider pricing transparency: 47 percent

"ACOs are considered next-generation health care delivery models," said Dr. Michael Cryer, national medical director with Aon Hewitt, in a news release. "By improving access to primary care, plan participants can avoid emergency room visits, which results in a financial reward for the ACO and shared savings with the sponsoring organization or organizations."