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Journal Article


Accountable Care Organizations in the United States: Market and Demographic Factors Associated with Formation

The Issue

Since the Affordable Care Act was passed, many accountable care organizations (ACOs) have been established by public and private payers. By holding groups of health care providers responsible for the overall cost and quality of care they deliver to a defined patient population, these organizations hold promise for reducing the fragmentation of care in the United States and making care more efficient and effective. Little is known, however, about which external factors encourage or inhibit ACO formation in particular areas.

What the Study Found

Using 2012 data, Commonwealth Fund–supported researchers identified 227 ACOs located in health care markets that serve more than half the U.S. population. Still, researchers found ACO distribution to be uneven. For example, organizations were more likely to be located in regions with high Medicare costs that performed well on selected quality-of-care measures. Regions with larger physician group practices and greater prevalence of managed care plans were also more likely to form ACOs.

In contrast, rural areas and regions with higher poverty rates were less likely to have ACOs, possibly owing to the difficulty of making the capital investments necessary to implement an ACO contract. Providers in these areas may worry about taking on the financial risk of a shared-savings model and meeting cost and quality benchmarks.


Although the ACO model holds promise in reducing costs and improving the quality of care, there are barriers to wider implementation. Policymakers might consider launching Medicaid demonstration ACOs, offering start-up financing, or designing other programs that motivate providers in rural and high-poverty areas to form accountable care groups.

Publication Details



V. A. Lewis, C. H. Colla, K. L. Carluzzo et al., "Accountable Care Organizations in the United States: Market and Demographic Factors Associated with Formation," Health Services Research, published online Oct. 1, 2013.