AdvaMed releases ACO recommendations

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Accountable care organizations, new payment programs for doctors established by the healthcare reform act, are intended to control the unchecked costs that the fee for service system encourages.

There is a risk, however, that ACOs could keep the best possible care from patients and stifle innovation, according to the Advanced Medical Technology Assn., or AdvaMed, which represents the medical device industry.

The Congressional Budget Office estimates that as many as 40 percent of all Medicare beneficiaries will ultimately be enrolled in ACOs. There is currently more than 45 million Americans covered by the federally funded program, a number that will grow as more of the Baby Boom generation retires.

ACOs are designed to give healthcare providers the means and incentives to better manage chronic disease, the care for which can fall short in the current fee system because of a lack of coordination and management, according to AdvaMed’s senior executive vice president David Nexon.

"AdvaMed’s view is that ACOs and these other payment modalities are very much the right recipe for the health reform system, but you really need to get the ingredients right in that recipe," Nexon said during a conference call with reporters.

The U.S. Dept. of Health & Human Services is slated to issue proposed regulations for the ACO program, along with plans for bundling care and pay for a performance system, at the end of this month. All are mandated by the Patient Protection and Affordable Care Act.

AdvaMed is concerned that ACOs could cause providers to reduce care quality to save money, as newer, more expensive forms of treatment would be avoided. This means that ACOs and other new payment modalities could have a "chilling effect" on medical innovation, according to the industry council. AdvaMed also said that physicians at cutting-edge academic hospitals are first to adopt new innovations; if implemented without concern for innovation, ACOs could cause doctors to be penalized for using more expensive treatments. AdvaMed hypothesized that if doctors and hospitals are not willing to adopt new treatments, entrepreneurs won’t be willing to invest time and money in developing new medical technologies.

Click below to listen to a podcast of the AdvaMed’s press conference on ACOs. Nexon was joined by AdvaMed executive vice president for payment and healthcare delivery policy Anne-Marie Lynch.

Click here to listen to the podcast for free, or download an MP3 of the interview by right-clicking on the link.

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