For all the debate, virtually all stakeholders agree with the overall objective of healthcare reform: achieving better health outcomes at lower cost. Different views have emerged as to how best achieve this objective, but the vehicle favored in healthcare reform legislation is the Accountable Care Organization (ACO). As set out in the legislation, ACOs are provider groups that accept responsibility for the cost and quality of care delivered to a specific population of patients cared for by the groups’ clinicians. The legislative intent is that these groups will have an incentive to invest in infrastructure and redesigned care processes for high quality and efficient service delivery.

While the goals of ACOs are laudable — reduce costs and improve quality of care through cooperation and coordination among providers — the premise underlying the ACO approach is flawed. The legislation incorporated a model that exists only as a rare exception in practice, and assumes that this exception can be replicated on a mass basis. The possibility that replicating a relatively untested organizational structure to remedy problems inherent in the existing system might create complications and risks is ignored. These complications are likely to result in undesirable, unintended consequences, just as earlier mass experiments have done so, namely, consolidation and increased costs without the promised improvements in quality.