The Harvard business professor and healthcare expert Regina Herzlinger is known as an iconoclast who has gotten a lot of things right over the years: She predicted in the 1990s that managed care would alienate consumers and ultimately fail at controlling healthcare inflation, and she has long advocated market-driven, consumer-oriented healthcare.

So she got our attention when she predicted in a recent Managed Care magazine that accountable care organizations and medical homes will fail.

Her arguments: that ACOs lack sufficient data and the ability to form a team culture, and will be challenged by antitrust problems. Medical homes will not work, she says, because primary-care doctors will not add value to the care of the 20 percent of chronically ill patients who generate 80 percent of costs; those patients would be better served by focused factories of care that deliver specialized treatment to certain groups of patients.

Here's an alternative scenario to Herzlinger's: There will likely be some ACOs that fail, but others the ones that are farthest along in collecting and analyzing data, that are more advanced in clinical integration, and that truly offer transparency to consumers will at least offer a viable alternative to our crazy, fragmented system. They will likely morph into organizations like Geisinger, Kaiser, and the Cleveland Clinic.

As for the viability of medical homes, it depends on your definition. A good primary-care doctor in a well-functioning medical home should have the care coordination abilities to make sure chronically ill patients are being directed to the proper specialists, whether those specialists are in focused factories or they are sole practitioners. And why can't medical homes become their own focused factories some of this is already happening with oncology groups that provide medical homes for cancer patients.

Besides, medical homes are not just for the chronically ill; they should also provide preventive care and flag problems among the seemingly healthy, to prevent them from joining that 20 percent of high-cost patients. Both of these groups still need a place with a central repository of their entire healthcare history, easily accessed through electronic medical records (and admittedly, we have a long way to go on interoperability of these systems.).

Herzlinger's ideal healthcare system is one in which there is a national insurance marketplace in which everyone must buy insurance (with all getting tax breaks and the poor subsidized by government); all would have access to transparent pricing and quality information. Her path puts the consumer in the driver's seat immediately. ObamaCare takes a similar strategy, but largely leaves employers in the driver's seat. ACOs and medical homes fit in with both visions.

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