![]() Essentially providers get paid more for keeping their patients healthy and out of the hospital.Īccountable care organizations grew rapidly in the US between 20, expanding from less than a hundred to well over 1,000 organizations. To discourage skimping on patient safety and care standards to cut costs, providers are often held accountable by the payer for meeting quality targets in addition to cost benchmarks. Physicians and hospitals have to meet specific quality benchmarks, focusing on prevention and carefully managing patients with chronic diseases. Savings are then “shared” between the payer/insurer and accountable care organization according to a predetermined formula. ![]() In a shared savings arrangement, a payer/insurer and accountable care organization negotiate a cost benchmark for delivering care to a defined population for a given period of time, usually a year if actual spending is below the benchmark, savings are generated. Use of reliable and progressively more sophisticated performance measurement, to support improvement and provide confidence that savings are achieved through improvements in care.Īccountable care organizations are distinct legal entities that enter into contracts with public and/or private payers to deliver enhanced healthcare services that improve value for patients, payers, and society more broadly.Īccountable care organizations still use a fee-for-service model, but they do create an incentive to be more efficient by offering bonuses when providers keep costs down. Payments are linked to quality improvements that also reduce overall costs. Provider-led organizations with a strong base of primary care that are collectively accountable for quality and total per capita costs across the full continuum of care for a population of patients. There are variations in accountable care organizations, but the core defining principles are as follows: At the heart of each patient’s care is a primary care physician. What is an accountable care organization?Īn accountable care organization is a network of doctors and hospitals that shares financial and medical responsibility for providing coordinated care to patients in the hope of limiting unnecessary spending.
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