STAT August 23, 2021
For the last half-century, Congress has endorsed essentially the same approach to cutting health care costs, an approach that came to be called “managed care” by the mid-1980s. Based on the assumption that U.S. health care costs are double those of other wealthy nations because doctors order services patients don’t need, the solution is to “manage” doctors and provide financial incentives that nudge them to cut services.
The managed care approach has not only failed to cut costs, it has contributed to health care inflation by encouraging mergers and driving up administrative costs. The failure of the accountable care organization (ACO), a prominent iteration of managed care, illustrates the problem.
The ACO label was invented at a 2006 meeting of...
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