The Heritage Foundation has released its policy guidance for Congress on ACOs, titled Why Accountable Care Organizations Won’t Deliver Better Health Care – and Market Innovation Will, authored by Rita E. Numerof, Ph.D., President of Numerof & Associates, Inc.

In theory, ACOs provide financial incentives to health care organizations to reduce costs and improve quality. In reality, given the complexity of the existing system, ACOs will most likely exacerbate the very problems they set out to fix.

This white paper describes how ACOs will concentrate more and more power in fewer and fewer organizations, allowing them to become “too large to fail.” It outlines the reasons why this approach will be unlikely to reduce costs or improve quality of care, and offers alternative strategies on how to achieve better health outcomes at lower cost.