Can Accountable Care Organizations Improve the Value of Health Care by Solving the Cost and Quality Quandaries?

Experts agree that the way health care is currently paid for in the United States, especially in the traditional, fee-for-service Medicare program, does not support coordinated care that is high quality and cost-efficient. In an attempt to identify a better way to deliver well-coordinated care that results in good outcomes, and consumers consider good value, policy-makers are taking a close look at accountable care organizations (ACOs).

This policy brief supported by the Robert Wood Johnson Foundation and prepared by researchers at the Urban Institute provides a comprehensive look at ACOs. Authors Robert Berenson, M.D., and Kelly Devers, Ph.D., look at the definition of an ACO, design and implementation issues, and opportunities and challenges with the concept.

According to the authors, ACOs will not be real game changers, at least in the short term, but are nevertheless worth concerted study. Given the current health care culture—along with existing legal requirements, political realities, and the legacy of previous payment reform efforts—there are important questions that remain about ACOs. But lessons from previous efforts can also provide useful insight into the trade-offs among program options. Current legislative proposals include pilot tests of the ACO concept, ensuring that policy-makers will be able to learn from experience and make program modifications as necessary.