H.E. Frech III: The development of ACOs in United States


Published: 12/09/2011

Professor H.E. Frech III, Professor of Economics at the University of California, Santa Barbara, talks to Nuffield Trust Senior Fellow, Dr Geraint Lewis, about health care reform in the US under the Affordable Care Act, and in particular the proposed development of accountable care organisations (ACOs).

He outlines how ACOs – which are only in prototype form at this time – will differ from traditional forms of managed care and how patients will be assigned to an ACO rather than exercising independent choice.

Professor Frech explains how ACOs will improve clinical integration by promoting collaboration between providers, before moving on to consider the risks associated with the introduction of ACOs into a competitive market, namely that they could reduce competition by creating monopolies of physicians and/or hospital groups.  He then summarises how antitrust (or competition policy) guidelines are in development to ensure that no ACOs market share exceeds 30 per cent.

Professor Frech spoke at the Nuffield Trust and Monitor partnership roundtable: How can the power of competition and integration be combined to drive greater efficiency and high quality care?  in September 2011.