Accountable care organizations (ACOs): The real deal or a field of dreams?

Proposed accountable care organizations (ACOs) have caught the attention of multiple political and advocacy groups across the nation, although none currently exist. An ACO can be defined as a group of practitioners (primary care physicians, specialty physicians, and other healthcare professionals) that, along with a hospital, accepts shared accountability for the quality and cost of care provided to a defined patient population. Some believe that his type of structure has the potential to eliminate the perverse incentives offered by fee-for-service healthcare payments while simultaneously raising quality outcomes and achieving increased physician-hospital collaboration.

The ACO concept was first introduced by Elliott Fisher, MD, MPH, Director of the Center for Health Policy Research at Dartmouth Medical School, and colleagues in a December 5, 2006 Health Affairs Web Exclusive entitled, “Creating Accountable Care Organizations: The Extended Medical Staff.”

Fisher and colleagues noted that many of the current policies and approaches to performance measurement and payment reform focused on individual providers rather than groups of providers. They pointed out, however, that coordination among multiple professionals is critical to ensuring that no significant gaps in quality occur. The authors thus advocated for a shared accountability model in which the physicians and hospital share accountability for quality and cost at the local level. Under such a model, if the ACO meets pre-defined targets, its members receive a financial bonus. The authors of the study stated that such a model could be an antidote to poorly coordinated, duplicative, and unnecessary care.

Despite the tremendous interest expressed by groups as diverse as the United States House of Representatives, the American Medical Association, and the Medicare Payment Advisory Commission (MedPAC), there have been no ACO demonstration projects to date. However, some non-Medicare projects are slated to begin in 2010.

There is great promise in the concept of ACOs as a model to deliver quality patient care while also addressing the need for physicians and hospitals to remain financially viable. Whether it will stand the rigors of implementation and unintended consequences remains to be seen. As we continue to develop this and other solutions to current healthcare challenges, it is appropriate to remember the words of Albert Einstein, “You can never solve a problem on the same level on which it was created.”

Until next time, be the best that you can be.

William K. Cors, MD, MMM, CMSL, is the vice president of The Greeley Company, a division of HCPro, Inc. in Marblehead, MA.