The Accountable Care Organization (ACO) is a health care delivery model, proposed in the Patient Protection and Affordable Care Act of 2010. Its stated goal is to achieve efficient and effective high quality health care at lower costs. An ACO is an integrated group of health care providers working together to provide a continuum of care for the patients that will improve quality and reduce cost of care.These providers include primary care physicians, specialists, hospitals, post-hospital facilities, and home health.3 Over the next few years, Medicare and private insurers are likely to require their patients to seek health care through an ACO assigned to them.
There are two key features of an ACO: integration of care and value-based payments. Integration of care requires a network of providers that utilize electronic health records and allow access to patients to their health information, in a private, secure and confidential environment. It will enhance coordination care of the patients and minimize duplication of services and tests. Value-based payment systems will change payments to providers from the current “fee for service” model to a “fee for value” model that rewards better patient outcomes rather than more tests and procedures. Under this system, patient outcomes will be measured using multiple markers to reward high quality care.
Currently, there are three models of value-based payments systems in different stages of development: pay for performance, bundled care, and shared savings. Pay for performance model requires health care providers to meet certain quality benchmarks before they receive full payment for their services. Bundles care payment model will provide a single payment for a well-defined episode of care, such as an elective surgery, that will be shared by all providers involved in that episode of care. Shared savings model will reward providers with savings that may be generated by reducing cost of care while achieving quality benchmarks.
Across the nation, physician groups, individual hospitals, and local health care systems have initiated a number of pilot projects. These projects are funded by local health care systems, large employers, commercial health insurers, and Medicare. Common elements of all ACOs are the following:
- A network of providers is established.
- One or more models of payment are adopted.
- An integrated electronic health record system is implemented across the providers.
- Quality metrics, as well as information systems to measure them, are defined and established.
- Patients are assigned to the ACO based upon their current providers and insurance plan.
- Reports on cost and quality are developed and shared in a transparent manner.
In conclusion, the goal of ACOs is to improve the quality of health care while reducing its cost. However, it will impact choices for patients. Hence, it is imperative for everybody to educate themselves on how it will impact them.