With the passing of a healthcare reform law last month, many changes are expected to start taking place in our healthcare system. Accountable Care Organizations (ACOs) can play a large role in the changes as primary care doctors and specialists, hospitals and other providers, and health plans will have to come together to control costs and improve quality of medial care.

So what is an Accountable Care Organization? According to a new report published by the Deloitte Center for Health Solutions, an ACO:

"is a local health care organization that is accountable for 100 percent of the expenditures and care of a defined population of patients. Depending on the sponsoring organization, an ACO may include primary care physicians, specialists and, typically, hospitals, that work together to provide evidence-based care in a coordinated model. The three major foci of these organizations are: 1) Organization of all activities and accountability at the local level, 2) Measurement of longitudinal outcomes and costs, 3) Distribution of cost savings to ACO members."

When many people these days hear about ACOs, the first thing that comes to their mind is Managed Care and the dreaded HMOs (Health Maintenance Organizations) of the 1990s. While the concept of integrating and coordinating health care delivery in an ACO is similar to that used in HMOs, there are two major differences. First of all, while in an HMO it was the payers (i.e. the insurance companies) that set the standards, in an ACO it will be the providers that will decide on the standards and review their own work. Another difference is that under HMOs, the cooperation between doctor practices and hospitals was forced, whereas under an ACO, existing “communities” of doctors and hospitals would work together in a more harmonious way.

Several large integrated health systems around the country, such as the Mayo Clinic in Minnesota, Geisinger Health System in Pennsylvania and Intermountain Healthcare in Utah, are already acting like an ACO by including a broad range of provider organizations to achieve a high level of performance.

So what does all of this mean to the patient? According to the Deloitte report,

"Several legislative proposals suggest that patients might be assigned to an ACO based on their primary care physician; however, the patient is free to see providers outside of their ACO and even switch ACOs. Some have suggested Medicare and Medicaid might be the optimal application of the ACO, creating a possible scenario wherein privately insured consumers transition to a medical home when they enroll in either of these programs and that medical homes serve as an entry point to the ACO."

A medical home is not a building, a house or a hospital, but rather is a concept based on the premise that healthcare delivery, especially for patients with chronic diseases, should be provided and coordinated by a team of professionals comprised of doctors, nurses, nurse educators, pharmacists, etc. that communicate using a secure computer platform.