Aligning Incentives in Accountable Care Organizations: The Role of Medical Malpractice Reform

32 Pages Posted: 14 Jul 2014

Date Written: July 13, 2014

Abstract

The Patient Protection and Affordable Care Act (ACA) encourages physicians, hospitals, and other health care providers to deliver better coordinated, high-quality care through the institution of the Medicare Shared Savings Program. Many physicians and other providers moved quickly after the ACA was enacted to enter into arrangements that would allow them to take advantage of the MSSP and similar programs sponsored by private insurers that likely would — and did — arrive on the MSSP’s heels.

Yet despite the initial enthusiasm, it is by no means clear that ACOs will succeed, whether individually or in the greater goal of changing our health care delivery system. To be successful, ACOs will require a substantial amount of coordination and participant buy-in to a particular practice ethos. How does one convince skeptical and independent-minded physicians to follow guidelines and metrics set forth by ACOs — guidelines and metrics that are devised in part to reduce the volume of certain types of services provided, and hence also potentially lowering physicians’ financial returns? How does one do this, in particular, when physicians not only may be making less money as a result of following these guidelines and metrics, but will also retain full liability for negligent outcomes?

If ACOs are to succeed more broadly, it may be important for state legislatures to address medical malpractice to reflect the changes currently underway in our health care system. The question is how to do this while also facilitating better integration of care delivery and, ideally, sufficiently improving the practice of medicine such that a critical mass of physicians will support and participate in the proposed changes. The answer may best be given by an idea last entertained during the heyday of managed care: enterprise liability. As the name suggests, enterprise liability would make a health care entity, such as a hospital or an ACO, financially liable for acts of negligence, rather than or possibly in addition to the individual providers staffing it or otherwise providing services under its auspices. Given the consolidation in the health care market, the increasing movement toward employment of physicians by hospitals, health insurers, and other entities, the incentives that the ACA gives for various forms of integrated care that meet or exceed quality benchmarks, and the persistence of the problems of our traditional means of addressing medical malpractice, this article discusses enterprise liability and argues that the time may be ripe to revisit enterprise liability as a means of rationally revamping our medical liability system.

Keywords: medical malpractice, accountable care organizations, Affordable Care Act

Suggested Citation

Hermer, Laura D., Aligning Incentives in Accountable Care Organizations: The Role of Medical Malpractice Reform (July 13, 2014). Journal of Health Care Law & Policy, Vol. 17, 2014, Available at SSRN: https://ssrn.com/abstract=2465668

Laura D. Hermer (Contact Author)

Mitchell Hamline School of Law ( email )

875 Summit Ave.
Saint Paul, MN 55105
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
94
Abstract Views
815
rank
331,247
PlumX Metrics