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Testing of ACOs Will Be Key to Success

The recently enacted health reform law includes several provisions designed to enhance the spread of accountable care organizations (ACOs), a strategy that encourages providers to take more responsibility for quality while reducing the overall growth of health care costs. Like many of the important payment and delivery system reforms included in the Affordable Care Act, widespread participation and rapid testing of ACOs will be key to effective implementation and meaningful change. As such, policymakers must encourage a variety of provider configurations—from large integrated delivery systems and multispecialty group practices to smaller independent practice organizations and naturally occurring networks—to take part in pilot programs and demonstration projects.

While organizations of all sizes should be allowed to participate in new ACO pilots, a minimum set of capabilities should be demonstrated to ensure that a provider group has the capacity to assume responsibility and deliver superior outcomes for a defined group of patients. This could include, at minimum, explicit agreements among providers across the continuum of care regarding expectations, responsibilities, communication, and the flow of clinical information. To that end, health information technology infrastructure, performance reporting capability, and quality improvement activity could be used to establish minimum thresholds for provider participation.

Commonwealth Fund case studies have identified additional organizational design features that promote high performance and could be considered when establishing minimum requirements for participation in ACO payment pilots. These include a culture of continuous quality improvement, alignment of financial incentives with goals, and a governance structure that engages physicians and hospital leaders. A non-profit, mission-driven orientation that promotes public reporting and transparency also contributes to success. Participation in local or statewide coalitions, quality campaigns, and quality innovations are further drivers of high performance.

Given the variety of provider configurations and organizational design parameters new ACOs may take, the organizations should meet performance standards and be accredited. It will also be particularly important to establish a comprehensive system for performance monitoring and rapid data feedback. Close attention to indicators of clinical quality, patient experiences, risk-adjusted total cost per patient, and health outcomes would gauge the performance of ACO pilots and track the overall progress of the U.S. health system. Monitoring important investments in payment and delivery system reforms like ACO pilots will help ensure that the Affordable Care Act delivers on its significant promise to bring about a high performance health system that works for all Americans.

This post also appears on the National Journal Expert Blog on Health Care.

Publication Details

Publication Date: June 8, 2010
Author: Karen Davis
Citation: K. Davis, Testing of ACOs Will Be Key to Success, The Commonwealth Fund Blog, June 2010.


Professor Emerita in the Department of Health Policy and Management, Johns Hopkins Bloomberg School of Public Health