Accountable care organizations have emerged as the newest big thing in health care. ACOs receive prominent attention in the Affordable Care Act, yet, the ACA's shared savings payment approach to encouraging ACO formation, based on the Medicare Physician Group Practice demonstration, may not be represent enough change from usual fee-for-service to produce organizational behavior change. Indeed, despite some assertions that the PGP demo was successful, the cost savings were not substantial and reflected mostly improved coding, not actual spending reduction. The paper reviews the problems with this particular payment approach and suggests a number of alterations that would produce an implementation approach with a greater likelihood of success.
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