ACO Healthcare: The History and Importance of Accountable Care

Due to the recent complaints about how health insurance companies worked with their clients, there has been an ongoing debate as to how to best provide affordable healthcare to U.S. citizens while maintaining an economic paradigm supported by private business. The need to understand what ACO Healthcare has led The Affordable Care Act (ACA) has sought to open the doors to not only how care is provided but also how healthcare professionals are reimbursed for services. As a result, Accountable Care Organizations (ACO’s) are being looked to as a viable alternative to either the ACA or the previous system that relied fully on private investors to provide Americans with healthcare coverage. Understanding ACO healthcare isn’t something that should be put off for later, but something that can affect the way you will receive care in the short- and long-term.

History of ACO

Accountable CareThe ACO system was both named and defined in 2006 by Dr. Elliot Fisher, MD, director of Geisel Medical School at Dartmouth College. When the Affordable Care Act was presented in 2009, it relied on a variation of the ACO plan Dr. Fisher introduced. The goal is to provide the best healthcare available to patients while maintaining an economic security for the providers. The means toward this end is accomplished through an affiliation between doctors, hospitals and insurers to maintain care for the patient whether it be for an emergency type of injury or a chronic illness that requires ongoing care.

The phrase, “The right time and place” becomes very applicable. The focus turns from a more casual relationship between professional and patient to a putting more responsibility on the healthcare organization to provide the right care at the right time and eliminating waste and error.

The Workings of ACO

Accountable CareEssentially, the ACO is based on a system of payment per person rather than the traditional model of payment per service provided. The concept recognizes that the chronically ill are likely unable to work and thereby afford extended health services, as well as the fact that someone who has been wounded is unable to take time off from work to recover while paying additional bills for treatment. Ultimately, being sick or injured by definition prevents a person from providing for their own recovery. The risks involved with the situation are mitigated through a form of health insurance the patient is paying into.

Due to the fact that everyone is now required to have health coverage, a greater responsibility has been placed on hospitals and clinics to be more accountable with monies being sought and paid. The necessity to provide better outcomes and takes into account the patient satisfaction changes the aim of simply treating patients and sending them on their way. But providing more exacting care and making sure things like duplicated tests or unnecessary testing is abolished is the new game in town.

Healthcare for the Population

Accountable CareACO healthcare provides accountability for the situation of illness by delivering coverage to the people who otherwise cannot afford it. By researching statistics, a formula was created that helped to determine an average cost of treatment and compared it against the likelihood of a patient needing the treatment. The expenses are then transferred over the lifetime of each member participating in the plan, regardless of what specific treatments each member may require. The downside is that some members will pay more over the course of their lives when compared to the actual costs. And, yet others will receive financing for expensive treatments they couldn’t otherwise afford. The positive side is that everyone can rest assured with the peace of mind that comes with knowing they will receive treatment as needed should misfortune arise.


Accountable CareThe efficiency of ACO healthcare is a debatable topic that often relies on the perspective of each person who pays into the system. An ambitious business owner with successful employment opportunities is going to pay more into the system than minimum wage rate laborers. With this consideration, the topic becomes a moral one for the wealthy and less fortunate as to whom should receive what kind of care, and is also an ethical issue for care providers as to whom should receive priority in service. When such ethical topics are defined through legislation, the debate as to what is “right” can become heated as individual opinions on the matter are introduced.

As with many things in our technologically-based society, not everything has been clearly defined or mapped out as it pertains to ACO healthcare. Time, along with some trial and error, will help to solidify the terms, terminology, and expectations to the healthcare organizations, which will trickle down to better patient care and overall patient satisfaction.
Ultimately, the idea of adequate healthcare is a topic that affects society as a whole. There are multiple viewpoints as to how best to address the issue. ACO healthcare is an attempt not only to define the varying perspectives on how to treat illness but also address each level of healthcare in a way that is fair to everyone involved. Although ultimately the solution falls to the politicians who determine the laws of the land, they do rely on the information provided by experts in the field to help make the important decisions concerning healthcare.

Accountable Care Organizations Accountability

Accountable CareMedical care provided by ACOs are patient-centric. This is a refreshing change compared to profit-driven medical care offer by traditional providers. ACOs are responsible to patients as well as third-party payers for high-quality medical care implemented in a safe manner. ACOs do much more than merely provide high-quality care to those in need of medical attention. They also work with patients to impart knowledge and advice regarding preventive health care. This is a stark contrast compared to traditional for-profit care providers. ACOs are all about actually preventing sickness and disability in order to avoid having to treat someone who is already ill. Those who provide care through ACOs do not use costly methods of treatment that just hit the market. Rather, they employ proven medical treatments and actually assume some or all of the insurance risk.

A new Role for Physicians

Accountable CarePatients who participate in a plan make claims against the provider’s aggregate resources. All revenues are fixed in order for doctors to function as patient insurers. This makes doctors responsible for patients’ health care costs across posterity as long as enrollment continues. It is worth noting that larger providers treat a considerable number of people which affords them the opportunity to juggle service requirement idiosyncrasies. Whether it is costs or standards of service, managing risk becomes much easier for providers with large populations. Yet large providers tend to have a more volatile yearly cash flow compared to those that serve a smaller group of patients. These smaller providers are commonly challenged by cost fluctuations that are often created by a handful of, especially needy patients.

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