The Economics of Provider Payment Reform: Are Accountable Care Organizations the Answer?

Effect of the new maternity insurance scheme on medical expenditures for caesarean delivery in Wuxi, China: a retrospective pre/post-reform case study

Aiming to control rising medical expenditures and help improve China's healthcare systems, this study examined whether a cap-based medical insurance scheme with shared financial interest between the insurance and healthcare providers is effective in containing hospitals' C-section medical expenditures. We used 6547 caesarean delivery case records from a teaching tertiary-level general public hospital located in Wuxi, China (2004-2013), and used the Chow test to investigate the possibility of significant variation in mean medical expenditures for caesarean deliveries pre- and post-reform. We also used paired sample t-tests and linear regression models to compare the mean medical expenditures between insured and uninsured women undergoing caesarean delivery during the post-reform period. After the scheme's implementation, medical expenditures for caesarean deliveries declined and the medical expenditures of women covered by the scheme were significantly lower than those of uninsured patients. These findings indicated the scheme's effectiveness in minimizing caesarean delivery expenditures. The cap-based medical insurance scheme with shared financial interest between insurance and healthcare providers would likely steer healthcare providers' behaviors in a more cost-effective direction.

Accountable Care Organizations: Integrated Care Meets Market Power

Will accountable care organizations (ACOs) deliver high-quality care at lower costs? Or will their potential market power lead to higher prices and lower quality? ACOs appear in various forms and structures with financial and clinical integration at their core; however, the tools to assess their quality and the incentive structures that will determine their success are still evolving. Both market forces and regulatory structures will determine how these outcomes emerge. This introduction reviews the evidence presented in this special issue to tackle this thorny trade-off. In general the evidence is promising, but the full potential of ACOs to improve the health care delivery system is still uncertain. This introductory review concludes that the current consensus is to let ACOs grow, anticipating that they will make a contribution to improve our poor-quality and high-cost delivery system.

Encouraging Competition and Cooperation: The Affordable Care Act's Contradiction?

This introductory essay to JHPPL's special issue on accountable care organizations (ACOs) presents the broader themes addressed in the issue, including (1) a central tension between cooperation versus competition in health care markets with regard to how to bring about improved quality, lower costs, and better access; (2) US regulatory policy - whether it will be able to achieve the appropriate balance in health care markets under which ACOs could realize expected outcomes; and (3) ACO realities - whether ACOs will be able to overcome or further embed existing inequities in US health care markets.