WSJ: Barring Changes, ACO Model’s Flaws Doom Most to Failure

Even though hundreds of Accountable Care Organizations (ACOs) have launched in the past year under the Affordable Care Act, the program is based on flawed assumptions and is doomed for failure, according to an opinion piece published in the Wall Street Journal. 

The program’s future success and viability will have to rely on three behavioral shifts among doctors, patients and the cost-effective conception that ACOs will save money, write Clayton Christensen, Jeffrey Flier, and Vineeta Vijayaraghavan, who hold titles of professor of business administration at Harvard Business School and co-founder of think tank Innosight Institute; dean of faculty of medicine at Harvard University and professor of medicine at Harvard Medical School; and senior research fellow at Innosight Institute, respectively. 

The three authors believe most ACOs will not succeed, writing:


The ACO concept is based on assumptions about personal and economic behavior—by doctors, patients and others—that aren’t realistic. Health-care providers are spending hundreds of millions of dollars to build the technology and infrastructure necessary to establish ACOs. But the country isn’t likely to get the improvements in cost, quality and access that it so desperately needs.

The first untenable assumption is that ACOs can be successful without major changes in doctors’ behavior…Doctors are expected to adopt new behavior that reduces the cost of care while retaining the ability to do what’s medically appropriate. 

The second mistaken assumption is that ACOs can succeed without changing patient behavior. In reality, quality-of-care improvements are possible only with increased patient engagement. 


The third and final flawed assumption of the Affordable Care Act is that ACOs will save money. Even if the pilot Medicare Pioneer ACOs—as the 32 most advanced Medicare ACOs are called—achieve their full desired impact, the Congressional Budget Office estimates that the savings would total $1.1 billion over the next five years.

While the architects of the ACO model assume that making the existing system more efficient will make healthcare affordable, the article writes, slowing the rise of healthcare costs will be further challenged by the addition of 50 million uninsured to the system. 

Other considerations the article makes include shifting to less-expensive care venues, such as “Minute Clinics,” and regulatory and payment changes that will enable doctors to do more within their licenses, rather than passing on patients to more highly trained and expensive specialists. 

Read the Wall Street Journal article.

Written by Jason Oliva