Why Accountable Care Organizations Won’t Deliver Better Health Care—and Market Innovation Will

“The Patient Protection and Affordable Care Act (PPACA) creates federal ‘accountable care organizations’ (ACOs). In theory, ACOs provide financial incentives to health care organizations to reduce costs and improve quality. In reality, given the complexity of the existing system, ACOs will not only fail; they will most likely exacerbate the very problems they set out to fix. ACOs will concentrate more and more power in fewer and fewer organizations, allowing them to become ‘too large to fail.’ Such a system undermines competition and entrepreneurship—the bedrock of innovation and job growth in this country.”