Healthcare News & Insights

Accountable Care Organizations


ACO | Accountable Care Organization

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The health care system in America is constantly evolving to meet and satisfy the needs of patients, physicians, insurance companies, and care organizations. In the mix of public and private health care coverages, many networks of medical professionals have developed over the years in an effort to promote integrated, efficient, and quality care for patients. Recently, however, there is one type of network that has generated a lot of buzz in the health care world: the Accountable Care Organization.

Accountable Care Organizations and Defining a New System in Health Care

An Accountable Care Organization, or ACO, is comprised of a group of hospitals or doctors that share responsibility for the care of patients. Though somewhat related to other health care groups, like the popular HMO,  this system will allow patients to see doctors or specialists outside of the organization without having to paying extra.

Any patient who has received care from a number of different physicians or care providers knows the hassles that accompany transitioning between offices, from lost medical records and repeat tests to sharing the same medical information over and over again.

The Accountable Care Organization was designed in response to these troubles, and seeks to help eliminate all of the hassles normally associated with venturing outside of a controlled health network. In an ACO, doctors will be able to communicate with other specialists that the patient has seen, helping to keep the lines of health open so patients can receive better care.

In the past, doctors and hospitals were usually paid based on the number of procedures completed or tests ordered, in what is known as the “fee-for-service” payment. The Accountable Care Organization seeks to redefine physician payment methods through an incentive program based on the premise of quality preventative care.

Instead of profiting from more procedures, which have been argued by some as unnecessary and not in the best interest of the patient, medical professionals in an Accountable Care Organization will have more incentive to:

  • provide better preventative care
  • reduce unnecessary tests
  • improve communication between specialists and primary care physicians

ACO and Health Reform

The Health Reform Bill and Affordable Care Act signed into law in 2010 brought a lot of changes to the health care industry. Among those changes, regulations regarding an accountable care organization take up only a small fraction of the document, but has generated a lot of discussion in the medical industry and is being touted as one of the next big innovations in helping physicians deliver better care to their patients, particularly those currently under Medicare coverage. These are the patients that, on average, have five or more chronic conditions and who seek care from multiple medical professionals within a year’s time.

In what is known as the Shared Savings Plan for Medicare, the government will instill the incentive program described above to help cut health care costs and keep the best interest of patients in mind. And while participation in this type of network is strictly voluntary at this point in time, a registered ACO must account for at least 5,000 patients or beneficiaries for a period of three years.

The steps being taken to better integrate the Accountable Care Organization groups into the health care industry are gaining in popularity for medical providers as well as for patients. And it seems that the government will be receiving some benefits from this new network structure as well; according to, Medicare could potentially save as much as $960 million over three years by putting the Accountable Care Organization plan into action.

ACO and Patient Privacy Concerns

Today’s digital technologies pose a constant threat to the security of the information held within them, and for the health care industry, this threat is a serious concern for many people. The HIPAA law set forth strict laws to protect open sharing of patient information and to properly deal with any security breaches regarding patient records and information, but some believe that the integrated nature of the ACO will challenge this idea.

An integral part of an Accountable Care Organization is the communal approach to care, with multiple health professionals having access to patient records and information. The encouraged process for easily sharing this data is through the increased use of Health Information Exchanges and other technologies like EHR and EMR.

While further development and integration of these technologies will help patients and doctors work together, there is an elevated risk for data breaches and access to private patient information.


Accountable Care Organizations are set to increase in popularity over the course of a projected three to five-year span and represent the latest innovations in health care system reform.