WSJ: Former CMS Exec Defends Cost Effectiveness of Managed Care, ACOs

There’s a lot of buzz around the concept of managed and accountable care thanks to the Affordable Care Act’s Accountable Care Organization (ACO) movement, but it’s not a new idea, and it hasn’t exactly worked in the past, according to a Wall Street Journal roundtable discussion between three health-care policy experts.

Dr. Donald Berwick, who just recently stepped down as administrator of the Centers of Medicare & Medicaid Services (CMS), responded to negative outlooks on ACOs from two other WSJ panelists: another previous CMS administrator, Tom Scully, and Jeff Goldsmith, president of health-care consulting firm Health Futures, Inc.

Berwick defended the movement’s opportunity for success for both healthcare providers and patients.


“The formula for ACO success is clear: keep quality high, save money by improving—not by restricting—care, and remain attractive to beneficiaries, who could go anywhere for care,” he said in the discussion. “That’s an edgy and promising design.”

Goldsmith, on the other hand, believes ACOs look like a “terrible business deal for providers” and that it’s “paternalistic” for patients, calling it a “we’ll decide what you need” kind of model.

“In order to get any shared savings, they will have to spend millions on consulting, systems, care managers, and IT staff, give up a dollar in immediately reduced income, and maybe, if they check all the boxes right, get 50 or 60 cents back in 18 months,” he said.


Berwick had a chance to counter Goldsmith’s arguments, and Scully also weighed in, saying that the “biggest flaw with ACOs is that are driving more power to hospitals” rather than doctors, which he said is “very scary” even though he is a self-proclaimed “hospital guy.”

Click here to read excerpts of the discussion.

Written by Alyssa Gerace