Navigating Accountable Care Organizations for Healthcare Provider

With the advent of accountable care organizations (ACO), the shift to preventive, coordinated care is in favor of providers who maintain patient health and reduce the need for higher-cost, episodic care. ACOs create financial incentives for health care providers to coordinate and improve the quality of care for their patient population. Reimbursements are tied to quality metrics and the cost of care, resulting in increased financial risk for providers.

In order to achieve financial solvency and growth, providers must take a strategic approach — with checks and balances to efficiently coordinate care. While accountable care organizations have saved Medicare substantial sums, private practices and medical groups operating without an integrated data system stand to lose. 

Quality Measures

ACOs have shifted the focus from a traditional pay-for-service model toward payment for value. That value can be summed up as preventing, limiting or minimizing disease progression. As such, providers must completely and accurately report quality data, which is then used to calculate and assess their quality performance. In order to share in any savings, an accountable care organization must meet the established quality performance standard that corresponds to its performance year.

Five areas in which to evaluate Accountable Care Organizations performance include …

  1. Patient/caregiver experience
  2. Care coordination
  3. Patient safety
  4. Preventative health
  5. At-risk population/frail elderly health

Quality measures can be implemented for all of the above areas. Data systems should also be used to monitor progress in each performance area, provide results reporting and spotlight areas that need improvement. Knowing what is being done well, and areas that can be improved, will shift practice initiatives and enable organizations to stay relevant to local health care needs.

Incentives and Risk Stratification

In a cost-saving approach, providers are incentivized to focus on preventive health care, as there is a greater financial reward in the prevention of illness than in the treatment of the ill. That said, knowing your population is important. To maximize return, providers must maintain the wellness of the healthy, as well as limit the disease progression of sick patients.

Getting to know your patient population starts with assessing regional health statistics, and in particular the top five to 10 health conditions. Patients should be categorized according to their risk factors.

Risk categories include the following: 

  1. Primary prevention (Level 1 and 2) — Includes patients who are healthy, and have no known chronic diseases. This is the population with the lowest health care expenditures. Individuals, who can be classified in Level 2, are healthy patients who show warning signs of potential health risks.
  2. Secondary (Level 3 and 4) — This category is marked by patients who are moderate users of health care resources. Those with a chronic disease, who are managing it well, and meeting their desired goals, may be assigned to Level 3. Patients who are not in control of a chronic disease, but have not developed complications, may be assigned to level 4.
  3. Tertiary (Level 5) — Patients in this category are marked by high health-care resource expenditures. They have a chronic disease that has progressed or become unstable. They might also have a new condition and/or significant complications have developed.  
  4. Catastrophic (Level 6) — This category includes patients with extremely high health-care resource utilization and are under the care of several sub-specialties. Level 6 is reserved for extreme situations. 

Identifying high priority patients — by the above means of Risk Stratification — helps a care coordinator to divide necessary services among providers, track referrals, ensure appointments are kept and more. Patients with more pressing health-care needs must be prioritized. Meanwhile, providers should use alternative methods to engage individuals, who regularly seek care, but do not represent the top conditions in the region.

By increasing care coordination, accountable care organizations can help reduce unnecessary medical services and improve health outcomes, leading to a decrease in acute care services. Patients with multiple chronic conditions, who are primed for significant health costs, are most likely to benefit from coordinated care from multiple providers.

Consumer Cohorts

Patients must also be guided take an active role in their health management. They should be given tools to help them be more prepared for clinical appointments. This results in better outcomes by ensuring providers have complete information, allowing for more productive visits. Providers should also ensure patients understand any health-care instructions, as well as understand and agree upon their course of treatment.

Other ways to get patients involved in their care is to ensure they have access to any lab results, and are given options for community resources and social welfare programs, as needed.


While many providers joined the ACO program to participate in a new model of care, the reality is that a strategic overall approach is required in order to achieve greater financial awards. As payments are linked to health improvements and reduced care costs, reliable performance metrics are needed, as well as close monitoring of this data. Assessing patient risk and getting patients involved in their own health care are also essential components to provider success.