Accountable care organizations

Accountable care organizations (ACOs) are defined as a set of physicians and hospitals that accept joint responsibility for the quality and cost of care received by their panel of patients. Financial incentives for meeting quality standards and efficiency are created to hold ACOs accountable for performance.

The ACO model continues to evolve, and is taking shape through several programs. In addition to the Medicare Shared Savings Program, the model is being further defined and developed through other federal and state government initiatives as well as public and private pilots.

Medicare Shared Savings Program

The health care reform law creates a Medicare Shared Savings Program that began in 2012. The program is intended to enhance quality, improve patient outcomes, and increase the value of care. Providers who voluntarily organize as ACOs and take responsibility for the care of a defined population of Medicare beneficiaries enrolled in the fee-for-service programs (Parts A and B) are eligible to share with the Centers for Medicare & Medicaid Services in the savings they achieve.

Kaiser Permanente doesn’t anticipate participating in the Medicare Shared Savings Program. We currently participate in Medicare Advantage and already achieve a much higher degree of integration and coordination than the program would establish.

How ACOs can improve care

  • The ACO model has doctors and hospitals working together to treat patients across the care continuum and across different care settings
  • ACOs are an effort to reverse the incentives in the fee-for-service model that reward volume rather than value and coordinated care
  • Many see ACOs as a stepping-stone to different payment methods, including more population-based payment methods

Kaiser Permanente and ACOs

Kaiser Permanente is a clear example of the clinical structure and coordination that underpin the ACO concept, such as:

  • Providing quality, patient-centered health care across the care continuum
  • Measuring performance systematically
  • Investing in infrastructure and resources
  • Promoting accountability among practitioners

Our model of integrated care delivery continues to be recognized as a national benchmark for cost-effectiveness. In a comparison of health plans across the United States, the national consulting firm Aon Hewitt once again reported that we’re the most cost-effective plan across all markets we serve.1

12011 Aon Hewitt Health Value Initiative™ Benchmarking Study—Kaiser Foundation Health Plan, Inc., March 2011.