The Obama administration today outlined a new approach to Medicare that it says could raise quality of care and reduce risk for patients, while also saving millions of dollars for taxpayers. The plan involves the creation of accountable care organizations, which are networks of hospitals, doctors, rehabilitation centers and other providers. They would work together to cut out duplicative tests and procedures, prevent medical errors, and focus on keeping patients healthier and out of the emergency room.
“We need to bring the days of fragmented care to an end,” says Health and Human Services Secretary Kathleen Sebelius, who announced a proposal regulation that defines how the networks would operate within Medicare. If things work out, medical providers would share in the savings. If the experiment fails, they’re likely to get stuck with paying for part of any additional costs. Sebelius says early estimates are that Medicare could save as much as $960 million over three years. That’s not a whole lot for a $550-billion-a-year program, but officials say it’s a start. The estimate was prepared by Medicare’s office of the actuary, known for its independence.