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The healthcare payment process is undergoing a dramatic transformation as payers and providers shift from volume to value. While stakeholders are currently piloting many different value-based care models, accountable care organizations are among the most popular and successful strategies to date.
Accountable care organizations, or ACOs, are groups of hospitals, physicians, and other providers who agree to coordinate care for patients and deliver the right care at the right time, while avoiding unnecessary utilization of services and medical errors.
ACO participants also agree to take on responsibility for the total costs of care for their patients. ACOs that reduce the total costs of care for their patient populations can share in the savings with the payer. In certain models, they may also be liable to pay back losses if their costs exceed their spending benchmarks.