Consumer advocates worry that ACO’s may drive up costs

Consumer advocates worry that new mergers involving hospitals, clinics and doctor groups, in attempts to form Accountable Care Organizations (ACO’s), may end up reducing competition, driving up costs and creating incentives for doctors and hospitals to reduce care in order to retain their cost-saving bonuses, according to The New York Times. 

The article reports that lobbyists and lawyers representing health industry groups are urging federal officials to “provide explicit exceptions to the antitrust laws” for doctors who participate in the new entities. Hospitals and doctors have also asked the administration to waive laws intended to prevent fraud and abuse in Medicare in an effort to get ACO’s formed.

Critics worry that the consolidation of health care providers could lead to higher prices.  Doctors and hospitals say the promise of ACO’s cannot be fully realized unless they get these waivers and exemptions from the government.

(Sources: The Advisory Board Daily Briefing,, November 23, 2010; The New York Times,, November 20, 2010)