Implementing Accountable Care Organizations

ACHIEVINGTHETRIPLEAIMS—HIGHER-QUALITYPATIENTcenteredcare,improvingpopulationhealth,andmoderating per capita costs—will require fundamental change in the US health care system. Accountable care organizations (ACOs) as outlined in the Affordable Care Act represent an early initiative in restructuring health care. Accountable care organizations accept responsibility for the cost and quality of care for defined patient populations. Under the Medicare shared savings program, ACOs will face expenditure targets based on their previous 3 years of Medicare Part A and Part B experience. Qualifying organizations can choosebetween2riskarrangements.The first involvesupside potential fromsharedsavings in the first2years, addingdownside risk only in the third year of operation. In the second arrangement,organizationsshareagreaterpercentageof thesavingsbutare responsible fordownside risk fromthebeginning. Thesharedsavingsprogramwill requireorganizations toconduct quality improvement initiatives, care coordination, performance measurement, and public reporting. To succeed, organizations contemplating participation in ACOs will need to develop and improve organizational capabilities necessary to meet program requirements. Hospitals and physician organizations will need to forge new relationships and take on new responsibilities. Success will require adaptation and change, learning quickly from mistakes, and developing an ability to transfer knowledge among participating entities. This will require ACOs to become learning organizations that can comprehend and expand what works and move to correct things that do not. In this commentary, we discuss 10 potential mistakes that organizations may experience in becoming ACOs whether with Centers for Medicare & Medicaid Services (CMS) payment or working with private payers.