There is broad consensus among physicians, hospital and health insurance leaders, and policy makers to reform payment to health care providers so as to reduce the role of fee for service, which encourages high volume, and instead to use systems that reward better patient outcomes, such as bundled payments for a population or for an episode of care. Inspired by successful shared savings contracts between private insurers and health systems, such as Total Cost of Care contracts in the Minneapolis–St Paul, Minnesota, area and the Alternative Quality Contract in Massachusetts, the Affordable Care Act accelerated this movement by defining Accountable Care Organizations (ACOs), specifying how ACOs are to be paid and how they are to relate to beneficiaries. But the legislation essentially left beneficiaries out of the equation, not offering incentives to choose an ACO or to commit—even softly—to its health care providers. This absence may severely undermine the potential of this approach to improve care and control costs.
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