Discussion: Unintended Consequences of Health Care Reform

NURS 8100 Discussion: Unintended Consequences of Health Care Reform

Discussion: Unintended Consequences of Health Care Reform

Accountable Care Organizations

Accountable Care Organizations (ACOs) are a unique way of providing care to patients that intend to provide more fluid and less segmented care. In an ACO physicians, hospitals, and care providers work collaboratively to provide high-quality care to all patients participating in their Medicare program.  In an interview conducted by Piper (2010), one of the respondents claims that ACOs engage providers that are willing to look at health care provision from a different lens and consider how they can influence the broader population. The focus on well-being at all levels of care has not been the traditional model and ACOs empower health care providers to begin to practice differently.

According to Bodenheimer and Grumbach (2020), the Kaiser Permanente group serves as an excellent example of a high-functioning ACO. The way the Kaiser group approaches care for their enrolled patients targets a fluid and seamless approach to providing all levels of health care. Under their plan, Kaiser provides everything from primary care to tertiary care. One of the benefits of this is that patients don’t have to make decisions about who the specialist is they need to see and what is their reputation. The group eliminates the need to ask questions like whom should they choose for a surgical procedure? The reason for this is that all of these types of services and providers live within their network and patients under their plan have immediate access to the types of services they need. I work in a hospital that has close ties to the Colorado Kaiser Permanente group. They have a medical office building (MOB) right next to the hospital, they see approximately 2/3 of all of the patients that enter our hospital. Patients are seen in the MOB and then referred for labs, procedures, prescriptions, or even hospital admissions right next door. Additionally, in my hospital, this group has hospitalists in-house 24/7 so the collaboration with other health care providers and access to patients is very timely. These tactics deployed in my hospital, which are all part of high-functioning ACOs, are a huge patient satisfier.

A few of the drawbacks associated with the Kaiser Permanente group in Colorado is that they are a physician-only group. They do not hire Certified Nurse Midwives, Certified Registered Nurse Anesthetists, or Nurse practitioners. This creates an environment that increases the expense to the patient. It also creates an environment that sends a message to registered nurses that their ability to perform at the highest scope of their license is not a valued commodity. Furthermore, when hospitals partner with ACOs like this and do not diversify, they put themselves at risk financially to be in trouble. Three years ago the Kaiser group decided to build a free-standing ambulatory surgical care center and send all of the patients in the Denver Metro area to that surgical center. This resulted in a significant decrease of surgical patients being seen in my hospital and a huge financial loss for the institution and system. Although ACOs on the surface seem like the gold standard of care provision, there can still be drawbacks.

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Bodenheimer, T., & Grumbach, K. (2020). Understanding health policy: A clinical approach. McGraw Hill.

Piper K. (2010). Accountable Care Organizations in the Era of Healthcare Reform… Mark B. McClellan, MD, PhD. American Health & Drug Benefits3(4), 242–244.

The Kaiser Permanente group is not the only organization that operates in this way. Many private physicians who hire PMHNPs prefer to do assessments in their private practice because of the billing. Physicians or Psychiatrists make more when they did the admission

Discussion Unintended Consequences of Health Care Reform
Discussion Unintended Consequences of Health Care Reform

or initial psychic evaluation (they are supposed to as they do the diagnosis). Rural areas or underserved felt more of these barriers. Researchers have posed several barriers or drawbacks to ACO participation for rural healthcare providers. These relate to the distinctive cultures of rural healthcare providers, their infrastructure needs, and meeting the requirements of ACOs as established by the Federal Government.  The unique mission of RHCs Rural Health Clinics is dedicated to providing cost-effective health care to rural underserved areas. RHCs may perceive that partnering with other providers that serve geographic areas outside their vicinity would detract from their dedication to immediate communities. Anticipation of losing autonomy. Many rural providers, including RHCs, have operated independently for years or often decades. Over time, these providers have become accustomed to operating in relative autonomy and have developed distinct cultures reflecting their owners, administrators, and communities. The merging of cultures necessary for ACO development would require not only time but a fundamental change in approach to conducting business for many RHCs.

Inadequate capital for information technology improvements Although RHCs qualify to participate in SSP ACOs, either independently or along with other providers, many do not have adequate financial resources to develop the information technology systems necessary for coordinating care – one of the primary goals of ACOs. Care coordination is a basic tenant of ACOs and requires teamwork and information infrastructure systems that support data sharing. Shortell and Casolino stress that ACOs that are comprised of small practices, as well as most Independent Practice Associations (IPAs) and many Physician-Hospital Organizations (PHOs), would need technical assistance to restructure their practices in order to be successful (Shortell & Casalino, 2010). Nationwide, the mean size of RHCs (as measured by physicians + nurse practitioners + physician assistants) was 2.95 (Ortiz; Bushy; Zhou, & Zhang, 2013).

Thus, many Rural Health Clinics exemplify the small practices that would need technical assistance in order to successfully participate in ACOs. Rural providers that participate in Medicare ACOs have the opportunity to share in cost savings. However, in that many rural providers are small, they may not feel they have the adequate negotiating power to compete for an appropriate share in the savings of an ACO that is led by a large, integrated system. RHCs may perceive that there are regulatory barriers to their participation in ACOs. However, the final rule on the Medicare SSP does allow for RHCs to form ACOs independently or with other healthcare providers. An additional ‘de-motivator’ is that ACOs require contractual and/or legal agreements between hospitals and other providers that align incentives – a difficult goal, particularly for rural providers that are less accustomed to collaborations between multiple providers (MacKinney, Mueller, & McBride, 2011). The population base is not large enough RHCs serve non-urbanized areas that are designated as Health Professional Shortage Areas or Medically Underserved Areas. One requirement of Medicare ACOs is that they serve a minimum of 5000 Medicare beneficiaries. The population density of many RHCs’ service areas is simply too low to meet this minimum threshold. Other barriers MacKinney et al identified several additional constraints or ‘de-motivators’ to ACO participation for rural providers (MacKinney, Mueller, & McBride, 2011). Among these are rural efficiency and rural leadership inexperience. Many rural providers, they explain, are already efficient in managing expenses because they are accustomed to ‘doing more with less. Thus, they are less likely to be improving on efficiency by participating in ACOs. In addition, providing healthcare in rural areas reinforces independence and autonomy and does not offer providers many opportunities to cultivate leadership skills in settings with multiple collaborators (MacKinney, Mueller, & McBride, 2011).


MacKinney AC, Mueller KJ, & McBride TD. (2011). The march to Accountable Care Organizations-How will rural fare? Journal of rural health; 27(1): 131-137

Ortiz J.; Bushy A.; Zhou, Y. & Zhang, H. (2013). Accountable care organizations: benefits and barriers as perceived by Rural Health Clinic management. Rural & Remote Health, Vol. 13 Issue 2, p1-13

Shortell SM & Casalino LP. (2010). Implementing qualifications criteria and technical assistance for Accountable Care Organizations. JAMA; 303(17): 1747-1748.

Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to the Medicare patients they serve. Coordinated care helps ensure that patients, especially the chronically ill, get the right care at the right time, with the goal of avoiding unnecessary duplication of services and preventing medical errors. When an ACO succeeds in both delivering high-quality care and spending health care dollars more wisely, it will share in the savings it achieves for the Medicare program.  The healthcare payment process is undergoing a dramatic transformation as payers and providers shift from volume to value. While stakeholders are currently piloting many different value-based care models, accountable care organizations are among the most popular and successful strategies to date. Accountable care organizations, or ACOs, are groups of hospitals, physicians, and other providers who agree to coordinate care for patients and deliver the right care at the right time, while avoiding unnecessary utilization of services and medical errors. ACO participants also agree to take on responsibility for the total costs of care for their patients. ACOs that reduce the total costs of care for their patient populations can share in the savings with the payer.  In certain models, they may also be liable to pay back losses if their costs exceed their spending benchmarks (Moore et al., 2017). Policymakers and healthcare leaders believe tying financial incentives to care quality, patient outcomes, and care coordination through ACOs is a key solution for fixing the inefficient fee-for-service system. The programs encourage providers to partner with others across the care continuum. Some providers are formally acquiring to gain control over a wide range of services, achieve economies of scale, and access the technology, data, and clinical capabilities of their peers. In fact, ACOs are and are likely to continue to be a major player in the value-based care and payment transformation. When all the parts work together, providers in an ACO can bring down costs and improve care quality while earning incentive payments. HMOs, on the other hand, seek to cut costs by setting fixed prices for services, which may encourage providers to reduce utilization or skimp on care in an effort to stay under the cap(Colla et al., 2018).


Colla, H., & Fisher, E. S. (2018). Moving forward with accountable care organizations: some answers, more questions. JAMA internal medicine177(4), 527-528.

Moore, K. D., & Coddington, D. C. (2017). Accountable care the journey begins. Healthcare Financial Management, 64(8), 57-63. Retrieved from






This is insightful Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other healthcare providers who come together to provide coordinated care to their patients (Colla & Fisher, 2018). The goal of ACOs is to improve the quality of care while also reducing costs. One way that ACOs achieve this goal is by sharing information about their patients (Meyer et al., 2017). This allows the providers in the ACO to work together to come up with a plan for each patient that meets their individual needs. ACOs can also use this information to track how well they are meeting quality and cost goals (Lewis et al., 2019). ACOs are funded in part by Medicare and Medicaid. However, they are also open to patients who have private insurance. ACOs have been shown to improve the quality of care while reducing costs. For example, a study published in Health Affairs found that ACOs were associated with improvements in quality of care and reductions in spending on Medicare patients.


Colla, H., & Fisher, E. S. (2018). Moving forward with accountable care organizations: some answers, more questions. JAMA internal medicine, 177(4), 527-528.

Lewis, V. A., Schoenherr, K., Fraze, T., & Cunningham, A. (2019). Clinical coordination in accountable care organizations: A qualitative study. Health care management review44(2), 127.

Meyer, C. P., Krasnova, A., Sammon, J. D., Lipsitz, S. R., Weissman, J. S., Sun, M., & Trinh, Q. D. (2017). Accountable care organizations and the use of cancer screening. Preventive medicine101, 15-17.