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The 2010 Patient Protection and Affordable Care Act was a “watershed moment” for Accountable Care Organizations (ACOs), giving them prominence and a formal legal framework, but successful management of ethical issues will be necessary for their long-term success, according to Johns Hopkins bioethicist and physician Matthew DeCamp, MD, PhD.

While ACOs’ goals are positive—improving patient care and population health while reducing costs—DeCamp raises the concern that an excessive focus on cost savings could negatively affect patient care decisions in a recent Policy Forum commentary in the online ethics journal Virtual Mentor.  

“Some behavioral economists caution that undue focus on financial incentives erodes intrinsic motivation and altruism,” DeCamp writes, noting an August 2012 editorial in the British Medical Journal.  He uses the example of shifting patients from more costly treatments covered under Medicare Part A to outpatient treatments paid for under Medicare Part D, which are not counted toward spending benchmarks that ACOs must stay under to be profitable.

Since the passage of the Affordable Care Act, the federal government has defined a formula for calculating spending benchmarks, as well as 33 quality measures its recognized ACOs are required to meet, DeCamp explains. Private insurance companies set their own performance standards for ACOs.

Unlike traditional fee-for-service healthcare systems, ACOs aim to encourage higher quality care at lower cost through “shared accountability” between member providers and hospitals serving an assigned population. Cost savings are designed to come from better coordination, efficiency and quality improvement initiatives among member organizations, DeCamp explains.  The incentive is a share in the savings.

To put it simply, DeCamp writes that traditional fee-for-service systems create an incentive for clinicians to perform more or unnecessary procedures, and ACOs reward clinicians for doing less, provided quality is maintained. 

DeCamp, a post-doctoral fellow at the Johns Hopkins Berman Institute of Bioethics, also warns that patients with private insurance could see their premiums go up.  Large, powerful ACOs could use their influence to negotiate higher payments from private insurers to offset reduced Medicare payments, he says.

“There is the possibility that [under the ACO model] hospitals will engage in unethical fiscal behaviors, including cost shifting and escalation,” DeCamp writes. “Whether this will change or compromise a hospital’s mission and organizational behaviors over time requires ongoing study.” 

While ACOs existed before passage of the Affordable Care Act led to the creation of the Medicare Shared Savings Program, DeCamp explains that participation is expanding rapidly, with more than 250 Medicare-related ACOs covering nearly four million Medicare beneficiaries as of January, 2013. 

“ACOs hold promise for improving patient care and population health while reducing per capita costs, things we all want,” DeCamp says. However, he adds, “Careful attention and study must be devoted to the ethical issues presented by the ACO structure to ensure it operates fairly and in line with the central medical ethics principle to ‘do no harm.’”

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