Inspired by incentives in the federal health-overhaul law, doctors and hospitals all over the country are starting to come up with new entities that target more affordable health insurance.
However, their efforts are already cause for concern because many people question if it is truly a way to save money, or if it will in fact cause the costs to increase even more.
Tucson Medical Center in Tucson, Arizona, is building an organization that will be owned by the hospital and local medical practices. This joint venture will be targeted at signing contracts with insurance agencies and Medicare in order to earn financial recompenses if healthcare dollars are saved.
This venture is an effort to develop a new entity known as accountable care organizations. Accountable care organizations are healthcare providers, or groups of healthcare providers, that are supposed to enhance and organize the care of a designated set of medical patients.
According to the law, if the accountable care organizations decrease expenses for their Medicare patients by a specific percentage under a benchmark, the providers will be able to receive additional compensation that is drawn from savings.
The primary objective is to help harness the growth of Medicare spending, which is broadly conceived as unmaintainable. In 2009, Medicare cost more than five hundred billion dollars, which in close to nine percent higher than the previous year. That money was spent to cover the healthcare for nearly fifty million seniors and disabled individuals.
Traditionally, Medicare’s payment structure creates incentives for increased healthcare spending and services because the providers are typically paid fees for things such as performing surgeries or administering medical tests. This new program retains such charges.
However, it is also designed to offer compensation for reducing Medicare costs over a group of patients, which should be accomplished by organizing patient care and other means like the use of practices that are supported by the most solid evidence. The accountable care organization effort is just one of a number in the legislation that makes an effort to save healthcare funds.