ACO And Economic Impacts Case Study

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Recommended: Basic terms of economics

Describe an ACO and economic impacts:
An ACO is defined as a local organization with a related set of providers that can be held accountable for costs and quality of care delivered to a defined population. Involves considerable flexibility in how ACOs can be organized, enabling them to develop more quickly and require fewer resources. It’s an affiliation of multiple types of providers that band together to perform a range of services. They get together as a big entity and say to insurers they will take care of a defined population of people because they have a group that has agreed to work together. Are paid on a shared savings basis, reflecting a percentage of the difference between a benchmark and the costs to Medicare for services proved …show more content…

Health insurance raises your compensation which if you are selling services it makes you more likely to sell more days of your services/work. Health insurance relationship to your total compensation which as a supplier, the more you get paid the more you are willing to supply. Therefore, if you sell more you get paid more. If you have the option of getting or not getting health insurance you will sell more days of labor to the employer that gives you health insurance because its more total compensation.
Reasons we do economic evaluation
1. To determine if its worth it which comes down to seeing if we are getting efficacy, is it doing what we think it should do.
2. Second, because we want to find out if one is better than another. Which one ultimately gives us the best value.

CEA: The difference in cost is compare to the difference in outcomes. Used where there are alternative ways of attaining a single type of …show more content…

If we increase quality we reduce supply because we increase cost. It also increases demand because if the consumer has an expectation of their care. If they expect that seeking this care they will get better the they will seek more of the care. So, if we increase quality through par for performance we are going to increased the consumers expectation of outcome. We will then increase the cost of providing care which will then reduce supply.
Describe the types of effects that the entry of managed care organizations into a market cab have a medical care provider
Managed care organization come into the market and go to providers and ask doctors/ hospitals if they will give them a discount on their fees and ill direct more buisness to you. So, the providers will agree to give a discount because they want the patients, but then the people that didn’t get discounts loose patients. Then those businesses will give the discount too because they want to recover their patients. In the providers perspective this will push down revenues. Marginal revenue goes down and it will create duplication of services because everyone is giving discounts to not loos patients. Demand will go up. Overall, insurers come in the market to push for discounts. Other providers then start playing me too. Fees

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