Our current healthcare system is clearly inching its way toward integration, says Harvard Business School professor Regina Herzlinger, but accountable care organizations are probably not the silver bullet the industry has been searching for.

Speaking at the recent Nashville Health Care Conference and Career Fair, Herzlinger dubbed the godmother of consumer-driven healthcare by Money magazine called ACOs intrinsically infeasible. She suggested that the payment model's vertically integrated structure is not capable of meeting every demand that walks through the door. To think that a single payment model can meet all patients healthcare needs while at the same time meeting all providers financial needs is unrealistic.

Much more realistic, Herzlinger said, is payment bundling, in which healthcare providers receive a lump sum based on the expected costs for certain episodes of care. Bundling provider payments for certain specific high-cost diseases like congestive heart failure could save billions.

This assessment elicited some interestingly measured responses from the conference's other keynote speakers, which included Nancy-Ann DeParle, current White House deputy chief of staff and former director of the White House Office of Health Reform, and Elliott Fisher, M.D., a professor at Dartmouth Medical School and director of the Center for Population Health at The Dartmouth Institute.

Fisher reacted gracefully to Herzlinger's criticisms particularly for someone often credited with fathering the ACO concept. (It was Fisher's research, after all, that found that many differences in per-capita healthcare spending had virtually no correlation with healthcare quality.) But he was quick to point out that the collaborative care model at the heart of ACOs directly addresses two of the current healthcare system's biggest problems: avoidable hospital readmissions and inequalities in accountability among healthcare providers. Payment bundling might promote efficiency and care coordination, Fisher said, but it also incentivizes providers for volume, not value.

Still, Fisher did concede that the term accountable care organization could use some work when it comes to public awareness.

We didn't put any focus groups on it, he said, and it turns out that accountable care organizations make people think of accountants.

Fisher's remark about accountants is telling healthcare quality is near the top of the list when people talk about improvements, but the bottom line may often be above it. If ACOs or bundling can deliver, few people will actually care what they're called.

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