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

By Theodore Marmor, PhD and Jonathan Oberlander, PhD
Journal of General Internal Medicine, March 13, 2012 (Online)

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, systemwide fee schedules, and concentrated purchasing.

Emulation, Not Innovation

We do not know how far ACOs will spread or what impact they, medical homes or other delivery system reforms will have on health care spending. But our history of failed cost control offers sobering lessons about exaggerated expectations, the limits of organizational reforms, and the recurring temptation to oversell reform ideas like ACOs as panaceas and the harbingers of a new, radically transformed, and vastly improved health care system. Such ideas should be seen as supplements, rather than the basis for a national strategy of health care cost control.

We believe that the U.S. needs less innovation and more emulation. That is, in order to control costs effectively Americans should focus less on (re)inventing the latest delivery system or payment method, and instead pay more attention to what other countries do to slow health care spending. Global budgets, fee schedules, systemwide payment rules, and concentrated purchasing power may not be modern, exciting or “transformational”. But they have the advantage of working.

Why have we spent decades trying to circumvent the obvious? We need to emulate the health care policies that do work in other nations, and give up on pursuing our many innovations that haven’t worked. Haven’t we had enough of modern, exciting and transformational failures?