Capital Commentary is the weekly current-affairs publication of CPJ, written to encourage the pursuit of public justice.

Accountable Care Organizations, Justice and Pluralism in Health Care Delivery

Jess O. Hale, Jr.


September 2, 2011
by Jess O. Hale, Jr.

The example of Jesus healing the sick and the history of Christian communities in creating hospitals should inspire Christians to attend to health care reform in the United States on principled grounds.  However, I suspect many of us are more consumed by the pragmatic concerns of the uninsured and our own rising deductibles.  With the Affordable Care Act (ACA)—the new health reform legislation—now the law of the land, many of the debates about how to actually provide quality, cost-effective health care in the United States—constitutional litigation notwithstanding—have moved to a new level.  Accountable Care Organizations (ACO) represent one of the new approaches to health care delivery that the ACA seeks to test in the Medicare system. 

While still in their infancy, ACOs generally aim to deliver cost-effective care by having payers (usually insurance companies) contract with provider organizations (which may include physicians, clinics or hospitals) using new forms of incentives in reimbursement.  These incentives are joined with health care delivery system innovations, such as medical homes and electronic medical records, to render “accountable” care, that is, care in which providers accept responsibility for the quality and cost of care received by their patients. Some may see ACOs as just another in a succession of desperately hoped for magic bullets designed to control spiraling health care costs while still providing quality care.  But from the perspective of public justice, ACOs present an occasion to consider how to concretely attend to the responsibility of the political community to develop an infrastructure for delivering quality health care that is financially sustainable.

As increasing insurance premiums and the skyrocketing incidence of diabetes demonstrate, rising costs and less-than-stellar health care outcomes were among the driving forces behind reform efforts.  Fragmented delivery and financing mechanisms have been significant contributors to those problems.  While an aging population, a high technology approach to medical care, and other driving factors undoubtedly propel costs, so to does the manner in which providers, primarily physicians, actually deliver care with the tests they order and the treatments they prescribe.  Our current system pays insufficient attention to what the evidence that we already have says about what actually constitutes quality care.  ACOs seek to bend the cost curve by tying reimbursement incentives (such as shared savings) to the delivery of quality, integrated, patient-focused care.

The Center for Public Justice calls society to a justice that is richly situated in its lived contexts.  Recognizing the differentiated responsibilities in health care encourages health care providers to follow their calling to heal while by providing a public infrastructure that incentivizes quality medical care.  ACOs should strive to render health care that is not inappropriately dominated (to use a notion from Michael Walzer) by the sphere of risk-bearing insurers and finance.  Indeed, by encouraging physicians, nurses, hospitals and a host of other providers to deliver integrated and evidence-based care(with compensation accordingly aligned), the state enables these providers to more faithfully live up to their responsibilities while allowing them to retain independence, an outcome is consistent with the Center's Guidelines on Government, Welfare and Economic Justice.  In this way, perhaps ACOs can facilitate retaining a healthy pluralism in our delivery system.  Though there is the danger of renewed domination by moneyed insurers or by powerful institutions like hospitals, the further development of a nascent ACO model in the implementation of the new health reform legislation represents an opportunity to shape the delivery of health care in the U.S. in a more humane and just arc. 

ACOs will not be the silver bullet that definitively controls total health care costs, as they are forecast to have only modest impact in Medicare ($5.3 billion in savings from 2010-2019), but they have the potential to nudge the system toward transformation in order to focus more on accountable, quality health care through providers exercising a calling to care--rather than through MBAs technically managing costs--and that is a move toward a more just health care system.

—Jess Hale is a Senior Legislative Attorney with the nonpartisan Office of Legal Services of the Tennessee General Assembly.  His views are his own and do not reflect those of either entity.  He has worked on health care policy in public service for more than twenty years at both the state and federal level, and participated in the Civitas public policy leadership program of the Center for Public Justice in 2005.

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