ACO rules need to level competition
Regulatory neutrality essential for new payment, delivery models
Accountable care organizations (ACOs) have the potential to slow health spending growth and improve quality of care by providers, payers and other healthcare organizations operating together, but regulating them poses challenges related to competition, according to research in the August issue of Health Affairs.
Regulations that affect both ACOs and private Medicare Advantage plans could unintentionally favor or disfavor certain kinds of providers or payers, driving some efficient organizations from the market, said the report authors.
[See also: Pioneer ACOs show savings]
To avoid that, the authors recommend that the government should practice regulatory neutrality, meaning that ACO regulations “should strive to preserve a level playing field among different kinds of organizations seeking the same cost, quality, and access objectives,” thereby allowing them “… to stand or fall on the cost and quality of care each provides,” the authors said.
However, there may be exceptions, especially related to antitrust policy, the authors said, so the quest for neutrality must take into account competing goals.
Imposing limits on ACOs’ size and market dominance may help to promote competition, but it also makes it more difficult for ACOs to integrate their operations and reach the scale needed to effectively coordinate care and invest in infrastructure. While neutrality usually favors less intervention, the authors noted, more antitrust enforcement might be needed to prevent a dominant ACO from squashing competition.
Among other regulatory neutrality issues is the extent to which Medicare should help finance the start-up costs of providers participating in the Medicare Shared Savings Program instead of just leaving it to the providers. Because of the uncertainty around new payment and delivery models, private investment may not be available. Short-run incentives from the government sometimes last indefinitely, however, and care should be taken to use it to overcome temporary barriers and not give one model advantage over another, the authors said.
