What is an ACO---an Accountable Care Organization

Introduction This AHA Research Synthesis Report presents an overview of Accountable Care Organizations (ACOs), including a discussion on the potential impact of ACOs, key questions to consider in developing an ACO, and a review of the key competencies needed to be an effective ACO. This report focuses on the overall concept of ACO yet highlights the specifics of the ACO model proposed in health reform legislation. What are ACOs? The term Accountable Care Organization (ACO) describes the development of partnerships between hospitals and physicians to coordinate and deliver efficient care (Fisher, 2006). The ACO concept envisions multiple providers assuming joint accountability for improving health care quality and slowing the growth of health care costs. The concept was also included in national health care reform legislation as one of several demonstration programs to be administered by Medicare (Patient Protection and Affordable Care Act, 2010). However, ACOs described in health reform legislation are operationally different from other ACO models. The role of ACOs in integrating and aligning provider incentives in care delivery requires participating organizations to posses certain key competencies, as identified in the literature: