What Is an Accountable Care Organization?

These groups of healthcare providers form networks, hoping to provide better care at a lower price.

Accountable care organizations, or ACOs, are networks of primary care doctors, specialists, hospitals, and other healthcare providers who have joined together to care for a group of patients.

Your healthcare is coordinated, or integrated, among the members of the ACO to help you get the right care at the right time. ACOs aim to avoid duplication of services, unnecessary tests, and medical errors, hoping to drive down the cost of healthcare.

They were designed in the Affordable Care Act to help fix efficiencies in the American healthcare system, which, critics say, in recent decades has focused on providing more services, or quantity of care, rather than quality of care. Healthcare providers then can conceivably make more through Medicare incentives if they keep patients healthy; they may be penalized if they don’t. Some ACOs are also working with private insurers. The number of these networks has grown rapidly over the past three years.

ACOs are somewhat like a health maintenance organization (HMO), a type of insurance plan that restricts your choices to healthcare from doctors who work for, or contract with, the HMO. Similarly, in an ACO, you will have a primary care doctor. If you need care beyond your doctor in an ACO, your doctor will likely refer you to a specialist or hospital in the ACO network. However, unlike in an HMO, you can still see doctors outside the network without paying more. (An HMO would likely not cover the cost.) ACOs may offer health services at a lower price than traditional health plans.

Part of how ACOs hope to drive down costs includes sharing your health information through electronic health records among the members of the ACO network. Advocates for the sharing of health data among healthcare providers argue the practice will help identify at-risk patients and therefore drive costs down by eliminating duplicate services, unnecessary testing, costly emergency room visits, and the delay of necessary care. You can still participate in an ACO even if you decline to allow the network to share your health information.