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Health Policy Brief: Accountable Care Organizations



July 27th, 2010

Americans will soon be hearing more about a new type of entity: accountable care organizations. That’s because the health care reform legislation enacted earlier this year authorizes Medicare to contract with accountable care organizations, or ACOs, to provide care for enrollees. Accountable care organizations are designed to focus on delivering care to a particular population of patients, with an emphasis on improving their health and reducing the rate of growth of health care costs.

The latest Health Policy Brief from Health Affairs and the Robert Wood Johnson Foundation (RWJF) `provides “a straight-forward description of what exactly an ACO is.” It describes the ACO concept as defined in the legislation and examines the challenges and opportunities facing health systems, physicians, administrators, insurers, patients, and policy makers as ACOs take shape. Some of the areas discussed include:

  • Why the ACO concept was created and what the intent is.
  • Models of different organizations that could be transformed into ACOs, such as integrated delivery systems, multispecialty group practices, physician-hospital organizations, independent practice associations, and virtual physician organizations.
  • How the Medicare shared savings program for ACOs is supposed to work when it takes effect by January 2012.
  • How ACOs would be paid to provide care.
  • The long road ahead for crafting federal regulations that will flesh out the details of ACOs.

For more on ACOs, see “How The Center For Medicare And Medicaid Innovation Should Test Accountable Care Organizations,” by Stephen M. Shortell, Lawrence P. Casalino, and Elliott S. Fisher, in the July issue of Health Affairs, as well as other pieces on ACOs in Health Affairs and on Health Affairs Blog.

Health Policy Briefs are aimed at policy makers, congressional staffers, and others who need short, jargon-free explanations of health policy basics. The briefs include competing arguments on policy proposals from various sides and the relevant research supporting each perspective. 

Previous policy briefs have addressed:

Extra Federal Support for Medicaid: The congressional debate on extending the increase in federal assistance to the states and the impact on state budgets.

Paying physicians for Medicare services: Efforts to forestall a cut in physicians’ fees and revise the Sustained Growth Rate payment formula.

Health reform’s changes in Medicare: Which provisions expand benefits, and which slow the program’s growth.

Health Policy Briefs offer more context than fact sheets but are a quicker read than most backgrounder papers. The information is objective and reviewed by Health Affairs authors and other specialists with years of expertise in health policy. You can sign up for e-mail alerts about upcoming briefs, and the are also available from the RWJF’s Web site.

Please feel free to forward the briefs to any of your colleagues who are tracking health issues. And after you’ve taken a look, we welcome your feedback at: hpbrief@healthaffairs.org.

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1 Response to “Health Policy Brief: Accountable Care Organizations”

  1. ljohns Says:

    If the Accountable Care Organization shares in savings and patients are not captive, what’s to prevent ACO providers from developing informal networks to refer patients for expensive or uncertain interventions that make them healthier, so the ACO looks good and doesn’t have to pay for those interventions?

    I really don’t see how ACOs, as conceived in the legislation, will work.

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