Under the charge of the AHA Committee on Research, the AHA Research Synthesis Reports
seek to answer parts of the AHA’s top research questions. This AHA Research Synthesis
Report addresses the following question from the AHA Research Agenda:
What is the role of the hospital in a new community environment that provides more efficient
and effective health care (e.g., what are the redesigned structures and models, the role and
implementation of accountable care organizations, the structures and processes needed to
implement new payment models such as bundled payments, and how do organizations
transition to this new role)?
This report is the second in the series and presents an overview of Accountable Care
Organizations (ACOs), including a discussion regarding the potential impact of ACOs, key
questions to consider in developing an ACO, and a specific review of the key competencies
needed to be an effective ACO.
What are Accountable Care Organizations?
The term Accountable Care Organization (ACO) was formalized by Dr. Elliott Fisher in a 2006
Health Affairs article to describe the development of partnerships between hospitals and
physicians to coordinate and deliver efficient care (Fisher, 2006). The ACO concept, which had
been in existence before the Elliot Fisher article, seeks to remove existing barriers to improving
the value of care, including a payment system that rewards the volume and intensity of provided
services instead of quality and cost performance and widely held assumptions that more
medical care is equivalent to higher quality care (Fisher et al., 2009).
The ACO concept envisions the development of legal agreements between hospitals, primary
care providers, specialists, and other providers to align the incentives of these providers to
improve health care quality and slow the growth of health care costs. ACOs would reach these
goals by promoting more efficient use of treatments, care settings, and providers (Miller, 2009).
The success of the ACO model in fostering clinical excellence and continual improvement while
effectively managing costs hinges on its ability to incentivize hospitals, physicians, post-acute
care facilities, and other providers involved to form linkages that facilitate coordination of care
delivery throughout different settings and collection and analysis of data on costs and outcomes
(Nelson, 2009). This predicates that the ACO will need to have organizational capacity to
establish an administrative body to manage patient care, ensure high quality care, receive and
distribute payments to the entity, and manage financial risks incurred by the entity.
The ACO model was included in national health care reform legislation as one of several
demonstration programs to be administered by the Centers for Medicare and Medicaid Services
(CMS), along with bundled payment and other key care delivery approaches. ACOs
participating in the CMS program would assume accountability for improving the quality and
cost of care for a defined patient population of Medicare beneficiaries. As proposed, ACOs
would receive part of any savings generated from care coordination as long as benchmarks for
the quality of care are also maintained. Health care reform provides a definition for the ACO
model included in the demonstration programs. However, many details have yet to be defined.