Assume you are the chief executive officer (CEO) of a large technology-intensive hospital in a community of 200,000 people that includes two other smaller community hospitals and a wide range of physicians and other providers working in private practice. Currently, you are paid by Medicare—the federal insurance program for the elderly—a fixed amount for every admission to your hospital, based on the severity of the patient’s needs. Physicians and other providers in your community are paid fee-for-service. The federal government has just made an offer to your community that it form an ACO that could accept a capitated annual payment for each person eligible for Medicare.

How would you go about deciding whether to accept the government’s offer? Take a position for or against and argue for your point.

Would you want to lead the ACO or just be a part of it?

How might you change the way care currently is organized in your community, given the new financial incentives embedded in the capitated rate? How would you coordinate with other hospitals and providers?