FTC Commissioner: ACOs May Lead to Higher Cost and Lower Quality
Now, according to remarks by Federal Trade Commissioner J. Thomas Rosch, it turns out that accountable care organizations — one of ObamaCare’s most touted policy gizmos — could make this problem far worse. “The net result” of ACOs, says Rosch, “may therefore be higher costs and lower quality health care — precisely the opposite of its goal.”
Entire Avik Roy piece worth reading.
I have no doubt that the Commissioner is correct.
The economists and policy wonks the Administration relies on for health policy believe they have found a solution for the perverse incentives in health care. Then the economists at the Federal Trade Commission points out that some of the new proposals create perverse incentives of their own.
Health policy wonks are fond of paraphrasing Kenneth Arrow’s economic argument that medicine does not respond to typical economic incentives and is somehow different than other goods and services. However, proponents of this view go well beyond the arguments that Arrow originally made and assume service models that would never work in non-medical fields will somehow work in complex health care service industries.
He’s right on.