What Is an Accountable Care Organization?

An accountable care organization is a group of healthcare providers who form a network, hoping to provide better care at a lower price. Here's what you should know.

What is the purpose of an accountable care organization?

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 in recent decades, critics say, has focused on providing more services, or quantity of care, rather than quality of care.

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Is an ACO a managed care organization?

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.

Unlike in an HMO, however, 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.

How do accountable care organizations work?

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 helps identify at-risk patients and therefore drives costs down — 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.

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