Assessing the State of ACOs

Dean Stephens
January 20, 2016

Many accountable care organizations (ACOs) are achieving much of their potential, but many others still have a ways to go in order to reach hoped-for outcomes according to a new white paper. Published by the Center of Health Care Strategies with support from the Robert Wood Johnson Foundation, the paper summarizes a comprehensive assessment of the state of accountable care organizations in the U.S. and makes detailed recommendations on ways to improve on the model.

Those recommendations include:

  1. Encourage movement toward greater accountability. Policymakers and payers can play a greater role in promoting strategies that innovative ACOs are adopting, including transitioning to capitated or global payment arrangements; expanding scopes of services beyond physical health; and using prospective attribution models, among others. The Next Generation ACO model goes part way toward adopting these emerging best practices, but more can and should be done, according to the authors.
  2. Break down policy and regulatory barriers. Policymakers can help providers and payers facilitate population-based or multi-payer ACO arrangements by breaking down barriers that inhibit data sharing. With the right support in place, more ACOs could, for instance, work toward interoperability of EHRs and other methods of facilitating information exchange among providers.
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  1. Facilitate multi-payer ACOs. If ACO arrangements are expected to truly change the way providers do business, over the long run multi-payer alignment and participation will be critical, according to the white paper. Policymakers and funders can help foster this by supporting multi-payer ACO pilots or provide funding opportunities for ACOs to develop the infrastructure to take on these complex care coordination efforts.
  2. Refine risk adjustment across populations and services. The authors point out that as ACOs assume greater financial accountability, improvements to risk adjustment will be especially important. In particular, precise risk adjustment will help ACOs stratify their high-need, high-cost patients, build tailored interventions to suit these needs, and efficiently allocate personnel and resources to provide the right level of care for each patient.
  3. Manage market consolidation. Policymakers should explore ways to better understand the effects (positive or negative) of market consolidation, and then take steps to regulate consolidation based on that understanding. ACOs will play a critical role in market consolidation, and encouraging the best possible effects should be a goal of policymakers.
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  1. Encourage greater patient engagement in care. ACOs are tasked with providing more effective patient-centered care, and encouraging patients to engage in their own care is a perfect opportunity to do this. While many ACOs already measure patient experience metrics, these measures usually gauge satisfaction with the care delivery process, not outcomes. ACOs may be able to gain a more accurate picture of their patients’ true experience with the health care system by measuring patient-reported outcomes.
  2. Improve measurement of ACO success. Support for more rigorous study on ACO progress could result in a better understanding of ACO success.


With roughly 750 ACOs in operation serving 23.5 million people across Medicare, Medicaid and commercial populations, the impact of these healthcare enterprises will only increase as they continue to proliferate. Many — though not all — are already improving quality and patient experience while simultaneously reducing costs. As momentum builds, the study’s authors highlight the opportunities to support this work, sustain momentum, and achieve incrementally better results over time. Policymakers and other can play key roles towards these ends.

Dean Stephens is the CEO of Talix.
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