What Hospitalists Need to Know About Accountable Care Organizations

Larry Beresford


October 25, 2016

In This Article

Accountable care organizations (ACOs) represent a large and growing part of far-reaching transformations for the US healthcare system, says Bradley Flansbaum, DO, MPH, MHM, a hospitalist at Lenox Hill Hospital in New York City.

But ask him how the hospitalist's working life is different today under an ACO, and he replies, "It's not. There is no difference in the way they get paid in an ACO," he says. "I don't know of any hospitalist group that has changed its financial incentives for members in response to ACOs."

Dr Flansbaum, a member of the Society of Hospital Medicine's (SHM's) Public Policy Committee, blogs at The Hospital Leader about these transformations, which are sometimes lumped together under the rubric of healthcare reform, payment reform, bundled payment, population health, or value-based care.

So, What Exactly Is an ACO?

ACOs are groups of doctors, hospitals, and other healthcare providers that come together voluntarily to provide coordinated, high-quality care to covered populations of patients. The Centers for Medicare and Medicaid Innovation has been testing three models of Medicare ACOs, whereas commercial plans are embracing ACOs defined more casually to include loosely knit networks of providers, Dr Flansbaum says. ACOs now number 838 nationally.[1]

ACOs are often associated with other alternative payment methodologies that are starting to replace fee-for-service reimbursement for healthcare. The goal is to get providers to share in the financial risk for providing healthcare to defined populations by offering rewards for care that meets the so-called "triple aim" articulated by the Institute for Healthcare Improvement: "better care for individuals, better health for populations, and lower per capita costs."[2]


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