Hugh Pickens writes writes: "Ezekiel Emanuel and Jeffrey Liebman write in the NY Times that a quiet health care revolution is taking place and by 2020, the American health insurance industry will be extinct as insurance companies will be replaced by accountable care organizations — groups of doctors, hospitals and other health care providers who come together to provide the full range of medical care for patients. Today most physicians and hospitals are paid on a fee-for-service basis and medical care is organized around treating a specific episode of illness rather than the whole patient — a system that encourages overtreatment and leads to mistakes and miscommunication when patients are sent between their primary care doctors, specialists and hospitals. In contrast, accountable care organizations will typically be paid a fixed amount per patient, along with bonuses for achieving quality targets. Health organizations like CareMore will make money by keeping their patients healthy and out of the hospital and by avoiding unnecessary tests, drugs and procedures. "ACO’s will also make health insurers superfluous," write Emanuel and Liebman. "And with the end of fee-for-service payments, insurance companies will no longer be needed to handle complicated billing and claims processing, nor will they need to be paid a fee for doing so." A few health insurers already see this change coming. Health insurer Wellpoint, which runs Blue Cross Blue Shield plans in 14 states and is the largest health insurer based on membership, spent $800 million to buy CareMore for $800 million to make the transition into the ACO business. "If they don’t want to go the way of the dinosaurs, insurance companies will have to find a new business to be in, one that is useful in the new world of coordinated care.""
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