FACT SHEET
Accountable Care Organizations
JANUARY 2014
What are Accountable Care Organizations?
Accountable Care Organizations (ACOs) are collections of health care providers (primary care
physicians, hospitals, long-term care facilities, etc.) that agree to accept shared responsibility
for the cost and quality of care of a group of patients. These providers are paid in a way that
encourages them to provide their patients with care that is low cost but also high quality.
ACOs that succeed in lowering the growth of health care costs, while also meeting standards
of quality care, share in any savings that are generated.
What are the goals of ACOs?
The goals of ACOs are to deliver high quality health care, improve the affordability of
patient care, and lower overall health care costs.
How could ACOs improve patient care?
The ACO model has great potential to improve care for patients. By incentivizing improved
communication and coordination among providers, patient care should improve. A patient
participating in the ACO can move between health care providers knowing that each
facility in the ACO is up-to-date on the patient’s condition and medical history. This
increased communication and coordination also decreases chances for overuse of care, such
as repeat tests or unnecessary medications.
Additionally, the Affordable Care Act specified that ACO governing boards must include a
patient or consumer representative. Therefore patients and consumers have an
opportunity to influence how these systems take shape and encourage them to emphasize
patient-centered care.
Are ACOs being implemented?
ACOs began to be implemented in the summer of 2012. In 2011, Centers for Medicare and
Medicaid Services announced the selection of 32 health care organizations nationwide to
participate in the Pioneer ACO program. Independent health systems have also started to
pilot programs.
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What are the results so far?
The first-year Pioneer ACO results were released in July 2013. All 32 of the Pioneer ACOs
met the quality performance metrics. Twenty-five of the 32 had success in reducing hospital
readmission rates. More than a third also succeeded, during just the first year, in reducing
costs, producing cumulative savings of more than $87 million and saving Medicare nearly
$33 million. For the 669,000 Medicare patients in the program, costs increased by just 0.3
percent over the course of the year – a much smaller increase than the 0.8 percent
experienced by similar Medicare beneficiaries over the same period. Just two Pioneer ACOs
lost money, and their losses totaled $4 million. Nine of the 32 ACOs decided to leave the
Pioneer program, 7 of which informed CMS they would apply to become Medicare Shared
Savings Program ACOs.
The National Partnership for Women & Families is a nonprofit, nonpartisan advocacy group dedicated to promoting fairness in the workplace, access to quality health care and
policies that help women and men meet the dual demands of work and family. More information is available at www.NationalPartnership.org.
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