What's An Accountable Care Organization (ACO) and Will It Provide Cheaper Health Care Costs?

An accountable care organization (ACO) is a network of hospitals and health care providers that treats patients based on a model of shared responsibility, resulting in more integrated and lower-cost care.

What is an accountable care organization?

Within an ACO, a patient's care is being coordinated between hospitals, doctors, and specialists (often including in-home care services and hospice). Not only does this coordination promote greater communication and collaboration between a patient's health care providers, but can potentially reduce costs across the board for the patient, the providers, and the hospitals.

ACO patients

ACO patients are primarily Medicare beneficiaries, meaning that patients are over the age of 65. For older patients, a population that generally requires more care, the coordinated care offered by an ACO can be a critical difference in terms of improved care and cost savings.

ACO cost and payment

Unlike the traditional health care payment model of fee-for-service, in which health care providers are paid per procedure (a system that often suffers from providers performing an abundance of unnecessary tests and procedures), in an ACO health care providers are offered financial incentives to keep costs down. This approach, combined with coordinated care, offers ACO patients organized, effective, and affordable health care.

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