Minnesota hospitals test ACO model

Minnesota Hospitals are preparing to roll out a new way to care for its sickest and poorest residents, a concept already being tested in Minnesota and elsewhere, called an Accountable Care Organization (ACO).

The Minneapolis Star Tribune reports that in this model, providers will take responsibility for a patient and receive a set fee from an insurer to cover all preventive care, doctor visits, tests and procedures. Paying per patient instead of per procedure creates an incentive to keep patients healthy, avoiding expensive hospitalizations and unneeded care.

Critics of the legislation say it makes drastic reimbursement cuts without providing a reasonable policy change. All hospitals expect to lose money caring for patients under the new arrangement.

(Sources: Advisory Board Daily Briefing, http://advisoryboard.com, March 17, 2010; Minneapolis Star Tribune, http://startribune.com, March 13, 2010)