Why Accountable Care Organizations Succeed

An Accountable Care Organization, or ACO, is a network of physicians, specialists, surgeons, and hospitals who agree to coordinate care for a patient population, with the goal of improving quality care, while eliminating unnecessary spending.

Why were ACO’s established?

With the implementation of the Affordable Care Act (ACA) in 2010, ACO’s were established by the Centers for Medicare and Medicaid Services (CMS) with the goal to provide better care for individuals, better health for populations, and lower growth in expenditures (DHHS). It’s important to note that as lawmakers searched for ways to reduce the national deficit, Medicare became a prime target. With baby boomers entering retirement age, the costs of caring for the elderly and disabled Americans were expected to soar (Gold). ACO’s could help cut costs, while improving care. They became the vehicle for implementing a new payment model in healthcare called “value-based purchasing.” This new model associated payment for healthcare directly to the quality of care provided, rewarding providers for delivering high quality, efficient clinical care. Medicare began setting up their own ACO’s across the country, and through the Medicare Shared Savings Program (MSSP), the CMS incentivized private insurers to do the same.

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How does an ACO work?

In “The ABC’s of ACO’s,” Jenny Gold cleverly explains the role of an ACO, comparing it to your local auto garage. As Gold points out, in our traditional healthcare system, you are responsible for your own coordination of care. So, if you have heart disease, you may see a primary care physician, a cardiologist, and even a heart surgeon, but since these doctors don’t communicate with each other, they may run similar tests that are repetitive, or they may prescribe conflicting medications. This model is not good for the patient and it’s costly.

Now compare this model with the way we fix our cars. When something is wrong with your car’s engine, you don’t take it to a battery specialist, then drive across town to a transmission specialist, and next to a timing belt specialist, and so on. You take your car to a local auto garage that has a team of mechanics, who share information and experience, and who work with each other to help fix your engine problem. In the same way, an ACO coordinates the communication and medical care efforts of doctors, imaging specialists, surgeons, hospitals, home health caregivers, and even pharmacies to diagnose and treat patients, and to help them stay healthy in the future.

  • ACO’s are designed to change the traditional healthcare model through the following ways:
  • They align the different component parts of patient care--primary care, specialists, hospitals, home health care--into an organized collective.
  • They supply that network with the technology to efficiently communicate and coordinate patient care.
  • They oversee the quality of care of their patients by making sure that their network is meeting performance standards set by the CMS.
  • They look for ways to eliminate unnecessary spending in order to lower the overall cost of healthcare for its patients.

What’s in it for the ACO?

To encourage private insurers to assume the financial and medical responsibility of a patient population and form their own ACO’s, the CMS created the Medicare Shared Savings Program (MSSP). The MSSP is a monetary incentive for ACO’s that gives back to the ACO a percentage of the achieved savings, when it successfully meets the CMS’s quality and savings requirements. The more an ACO can reduce costs, while maintaining quality care and outcomes, the more financially rewarding it can be for everyone invested in the ACO.

The more an ACO can reduce costs, while maintaining quality care and outcomes, the more financially rewarding it can be for everyone invested in the ACO.

What’s in it for the patient population?

At the heart of the ACO model are medical care value and “connectedness.” Typically, the neighborhood, primary care physician is the first point of contact for medical services: annual physicals, abdominal pain, skin irritations, shoulder pain, severe headaches—we seek the advice of the primary care physician for just about anything medically abnormal or unexplainable. The primary care physician diagnoses the issue(s) and determines the next steps: blood work, tests, imaging, referrals to specialists, prescriptions, etc. As an ACO participant, the primary care physician considers which “next step” provider to refer you to, based on whether the provider participates in the ACO, and based on the value and quality of the treatment the next step provider gives. For example, the primary care physician might ask these questions: which specialist is an ACO participant; which one is closest to the patient’s home; which one can see the patient more quickly; which specialist charges less for the same tests; or which one has a history of proven success in a specific area? 


On the road to patient recovery, clinicians across specialties share the patient’s medical data through an integrated, information platform, providing care in a teamwork approach, rather than in their traditional silo approach—this is a win for patients. As an additional byproduct of this integrated network of shared information, physicians also gain valuable feedback concerning their own patterns of care, services, and expenses, and they can compare this information to the work of their peers. This information produces a healthy, competitive environment that helps to lower costs and raise the level of quality care for patients—another win for patients.

Accountable Care Organizations help to deliver a value-based, connected care experience for patients. They facilitate coordinated communication between primary care physicians, next step medical providers, and patients and their families, while emphasizing value and best practices for patient needs. This medical “connectedness” and value awareness helps to successfully navigate patients through the healthcare system, improving the quality of care and the quality of life for individuals and their communities.


North Texas Clinically Integrated Network, Inc. (dba TXCIN) is a non-profit ACO that began in late 2014. A small group of independent physicians aligned to initiate clinical integration and value-based contracting. Partnering with RevelationMD and its state-of-the art information platform, TXCIN has become the largest independent network of physicians in North Texas.



(DHHS, Federal Register / Vol. 76, No. 212 / Wednesday, November 2, 2011 / Rules and Regulations, 67803). https://www.gpo.gov/fdsys/pkg/FR-2011-11-02/pdf/2011-27461.pdf


Gold, Jenny, et al. “The ABC’s of ACO’s.” Accountable Care Organizations, Explained, Kaiser Health News, 2015, https://khn.org/news/aco-accountable-care-organization-faq/.



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