From HMOs to ACOs: The Quest for the Holy Grail in U.S. Health Policy

Abstract

The United States has been singularly unsuccessful at controlling health care spending. During the past four decades, American policymakers and analysts have embraced an ever changing array of panaceas to control costs, including managed care, consumer-directed health care, and most recently, delivery system reform and value-based purchasing. Past panaceas have gone through a cycle of excessive hope followed by disappointment at their failure to rein in medical care spending. We argue that accountable care organizations, medical homes, and similar ideas in vogue today could repeat this pattern. We explain why the United States persistently pursues health policy fads--despite their poor record--and how the promotion of panaceas obscures critical debate about controlling health care costs. Americans spend too much time on the quest for the "holy grail"--a reform that will decisively curtail spending while simultaneously improving quality of care--and too little time learning from the experiences of others. Reliable cost control does not, contrary to conventional wisdom, require fundamental delivery system reform or an end to fee-for-service payment. It does require the U.S. to emulate the lessons of other nations that have been more successful at limiting spending through budgeting, system wide fee schedules, and concentrated purchasing.