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Understanding ACOs take a different tack than managed care of old by rewarding quality outcomes.

It’s more than just payment reform that we’re talking about when we talk about ACOs.

Diane Pinakiewicz, National Patient Safety Foundation

An ACO is a network of healthcare providers and services that assumes responsibility for the care of a population of patients. Those that meet quality performance standards will be eligible for financial rewards.

This is not the first effort to move away from a fee-for- service system that pays for volume instead of outcomes. But the ACO is different from previous approaches. In early capitation models, providers assumed the financial risk of caring for a population. The hope was that given a fixed payment per patient, providers would spread those dollars across the continuum of care; instead, the model raised concerns that patients weren’t receiving enough services.

The ACO is a hybrid approach that could prove more effective than previous models. ACOs are accountable for the quality, cost and overall care of fee-for-service Medicare patients. They will be evaluated and reimbursed based on quality performance measures. There already have been some experiments with reimbursement programs that pay for quality outcomes rather than just volume. The

development of ACOs is the next step in that evolution. If done correctly, healthcare savings will be redeployed to make the healthcare delivery system more effective and more focused on delivering safe, high-quality care.

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