New Under Health Reform: Accountable Care Organizations (ACOs)
Originally Published in RMP Advisor, May 2010Accountable Care Organizations (ACOs) are among the most interesting “innovations” introduced by health reform legislation. An ACO is the latest label given to an organization that integrates the delivery and financing of healthcare services within a single entity. It’s not a new concept, but rather a variation on a theme that has brought us Health Maintenance Organizations (HMOs), Physician-Hospital Organizations (PHOs), Managed Care Organizations (MCOs), and going back further, the SuperMed framework developed by Paul Ellwood.
As defined in the new law, an ACO includes a local healthcare organization and a related set of providers (at a minimum – primary care physicians, specialists, and hospitals) that can be held accountable for the cost and quality of care delivered to a defined population. The goal of ACOs is to deliver coordinated and efficient care. The ACOs that achieve quality and cost targets will receive some sort of financial bonus, while under some approaches those that fail will be subject to a financial penalty.
This is a worthwhile endeavor that will take some time to play out. Marsha Gold, ScD, a senior fellow at Mathematica, has prepared a policy brief that broadly examines the ACO concept and draws insights for policymakers in the public and private sectors.
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