Not HMOs or MCOs, ACOs Are a New Entity (and Acronym) Altogether

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One of the reasons the jury is still out on whether ACOs will be effective and successful is because some detractors view them simply as a rehashing of the decades-old HMO models or just another form of managed care organization.

“When I first started practicing in the early ‘90s, talk of capitation was the best way for practices to establish themselves and make money, assuming you kept costs under control and visits normal,” said Dan Dietrichs, OD, formerly of the National EyePA Coalition. “It was supposed to be a huge profit margin, but it was a pyramid scheme. Somebody gets all the money and somebody does all the work, but not necessarily the same guy. I’m not sure people want to do more work for the same amount of money.”


However, a number of health care professionals Vision Monday interviewed explained how today’s ACOs are different than yesterday’s HMOs. “HMOs were good in theory, but very bad in practice,” said 4PatientCare’s Guterman. “Although there are some very good HMOs that have evolved, the biggest problem with the HMOs of the ‘80s was the way to make a lot of money was to enroll lots of healthy people. The good ones were experts at gathering low risk individuals. Also, one of the big differences between managed care in the ‘80s and the ACOs of today is that the board of the ACO is provider majority by law.” Now, primary care physicians are at the center, dictating care through a limited network.

Another difference between then and now is the way in which information is stored and shared electronically. “The chance that health reform is going to succeed is massively different than it was before because of EHRs,” said EyeCare Advice’s Jackson. “There is a very, very different foundation today than there was even 10 years ago. ACOs do not equal MCOs or HMOs. There is a massive infrastructure difference behind health reform, and that makes the difference between success and failure. Look at hospitals instituting EHRs and the ability to exchange information through health information exchanges. All that connectability that exists today did not exist in the days of HMOs. Now you also have all the new laws that back health reform, massive legislation driving accountability. There’s a momentum behind ACOs because of health reform that simply was not there when HMOs and MCOs first came on the scene.” ■