Bright Idea: How Accountable Care Organizations are changing healthcare

Published April 11, 2017

What is an Accountable Care Organization (ACO)?

An Accountable Care Organization (ACO) is a model of care that helps doctors, nurses and hospitals work closely to improve communication and coordination of care for individual patients. These systems allow healthcare professionals to provide better care and avoid the duplication of services that lead to waste and inefficiencies.

ACOs and the medical neighborhood

How is an ACO different from other healthcare payment models?

The traditional fee-for-service system rewards doctors and hospitals for the volume of care that they provide rather than the quality of care. That means doctors are paid more for seeing more patients and performing more services, such as tests and other procedures, even if the treatments they provide patients are ineffective.

An ACO changes this dynamic by rewarding hospitals and healthcare professionals for providing high-quality care that helps patients get and stay healthy. Doctors, nurses, hospitals, insurers and employers collaborate to ensure the highest quality care for each patient. Payments are tied to patient outcomes so doctors earn more money when patients recover faster, stay healthier and are satisfied with their care.

How are patients benefiting from ACOs?

As more communities learn about the benefits of ACOs, these programs are expanding rapidly. As a result of ACOs, patients are making fewer unnecessary visits to the emergency room, and they are less likely to be readmitted to the hospital. In addition, patients are more likely to follow treatment programs for managing high cholesterol, diabetes and other conditions.

Have ACOs been successful?

The results of ACOs managed by Blue Cross and Blue Shield companies across the country are promising. Blue Shield of California’s ACO program has reduced hospital admissions by 21 percent and decreased the number of days patients spent in the hospital by almost 20 percent, saving an estimated $440 million since 2010. In fact, the program has been so successful, Blue Shield of California has launched 42 ACOs across the state, serving more than 354,000 Californians.