Accountable health care.

PositionTRENDS AND TRANSITIONS

ACOs are the latest fad," Dan Hawkins, senior vice president for policy and research at the National Association of Community Health Centers told National Public Radio. "I call them the hula hoop of health care because everyone wants one even if they haven't actually been defined anywhere."

What are they? Accountable care organizations are run by doctors, nurses and other providers who monitor care through physician offices, clinics or hospitals. They aim to improve health care, while providing a different way to pay for and receive services, which may result in savings.

Medicaid, Medicare or private insurers contract directly with the group of providers, whose pay is based partly on patient results and meeting cost targets, this model rewards providers for the quality of care they give rather than the quantity of tests and treatments they perform.

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This type of health care is relatively new, and largely untested, but growing in popularity. Federal health reform authorizes and encourages pilot programs, and many believe it shows great promise for improving the quality of health care while, perhaps, holding down costs. Medicare will start using countable care organizations next year.

State lawmakers can authorize statewide or pilot programs or participation in federally supported Medicaid demonstration programs.

The organizations may combine other health care initiatives--such as medical homes and electronic medical records--with new ways of paying for health care, such as global and episode-of-care payments, which bill for an entire injury or disease rather than each exam, test or treatment.

Steven Shortell, a health policy expert at the University of California, Berkeley provides the following...

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