ACO’s: Missing Accountability from a Very Critical Stakeholder

Wendy Lynch

First published 3/10/11 on the Altarum Institute Blog

Imagine you decided to run an Accountable Car-Care Organization.  The government announced you would no longer be paid on repairs alone, but for keeping cars on the road and out of the garage. You might contract with qualified teams of mechanical providers, from oil-change garages for preventive maintenance, tow-truck drivers for emergencies, to specialist mechanics for very technical repairs.  Next, you assemble secure, integrated information technology to track the care each automobile receives across providers and assign each license plate number to a vehicle-centered mechanical home. Finally, you determine specific outcomes and standards of practice to keep engines running better. Under ACCO rules, you are ready to start earning performance bonuses.  Right?

What is missing?

If I were to be paid based on the health of cars under my care, which stakeholder would I approach first with a win-win business deal?  The driver.  He or she has the most influence on the day-to-day well-being of the car, the regularity of preventive care it receives, management of ongoing problems, and even the likelihood of serious events.  Plus, except in the most catastrophic emergencies, the driver decides if, when and where to seek care.  I’d want to compete for his or her business with clear information about why my services are of higher quality at a lower price, and I would offer discounts for drivers who followed care recommendations.  Without driver involvement, why would we think provider accountability can work?

Never mind those patients, lets rearrange the system (again) without them.

Enthusiasm for ACOs, the real Accountable Care Organizations for people, is high (1, 2). Over the past six months, the chorus has become louder.  We hear the same song in the background of virtually every conference, business meeting, and healthcare discussion.  It is an anthem on which reform depends:  Accountable Care to the rescue.

In principal, it can help save the system; it promises improved quality for a lower price.  No fewer than a dozen people have recited its familiar, hopeful lyrics to me emphatically, with the same refrain:  doctors will be paid for better care instead of more care.  Costs will go down. They insist that in nine month’s time, hospitals and physicians will sing in harmony as they reap collective rewards for cost-effective care and meet Centers for Medicare and Medicaid Services (CMS) deadlines (3).

With the tune stuck firmly in our heads, one can easily get swept up in the excitement. On two separate occasions, I have returned to original documents from actual legislation, looking for clear definitions to see what I have missed.  Certainly, with this much support, there must be a solid blueprint based on financial evidence. If the song is such a hit, maybe I just don’t understand the music?

A detailed review does provide many likeable ideas (4):

  • Rewards for better outcomes.
  • Shared fees across providers, encouraging communication and coordination.
  • Networks of designated, accountable, providers with shared governance.
  • A size of population large enough to measure results.
  • Information systems that share and exchange data.
  • Minimal disruption for patients.

Much remains unknown

Despite its catchy, promising components, a closer look at the legislation fails to answer many questions about why our industry is so convinced that ACOs will transform care or cost.  Like so many popular hits playing on top stations, we find out that no one actually knows all the words, or who recorded the original version.

Many reviewers have pointed out structural ambiguities in the new model.  For example, no one knows exactly how patients will be assigned to an ACO (5).  It is also unclear which groups of providers and facilities will constitute the “organization” component of ACOs, and who will manage them (6).  Further, the size and method of rewards for better healthcare delivery have yet to be defined (7).  Industry experts expect clarification on these and other issues in the coming weeks (8), but I have yet to hear anyone proposing to fix the biggest omission of all: a lack of accountability assigned to the most influential stakeholder.

The greatest omission

Once again, healthcare policy experts have designed a solution that leaves the most critical, active decision maker unaccountable.  As if patients are passive recipients of services, who can have little impact on type of care, cost of care, frequency of care, or management of well-being, patients are assigned only the simple task of (unknowingly) choosing an ACO by visiting their PCP.  After that, it’s up to the doctor, or the hospital.  One of the most comprehensive toolkits regarding ACO implementation and measurement mentions economic incentives for patients in a brief, five-paragraph section out of 159 pages (9).

Some have argued that as much as 85% of chronic disease management is accomplished by the patient himself (10).  Very few human diseases or injuries are unrelated to a person’s behaviors, and recovery virtually always requires the individual’s active participation.  Consequently, does accountability not fall directly on one’s own shoulders to choose the right sources of care, and follow appropriate steps to prevent illness or avert avoidable events? Why do we continue to ignore our primary disease-management resource, and presume he or she cannot assume some responsibility, both behavioral and financial?

While doctors argue over who should take credit (be rewarded) or accountability (receive less) when things go well or poorly, most consumers get the message that this has nothing to do with them. In general, doctors reinforce this message; we have a powerful tradition of disempowering patients.

Patients can and do change healthcare every day.

When consumers have tools and economic incentives to play an active role in care, they do.  When given clear information about price and quality, they vote with their feet similar to other industries (11).  We are hearing powerful stories of regional markets that have had to adjust because of consumer pressure, such as that created by the employees of Serigraph corporation (12).

Many ways to share accountability

We can share accountability with patients in many ways.  Examples include:

  • Deposits in health accounts for establishing a relationship with a medical home.
  • Receiving money back on procedure costs for choosing a higher-quality provider.
  • Sharing savings for finding medical billing errors.
  • Receiving discounts on services when remaining compliant with care plans.

Within the next few months, the industry will receive additional detail regarding the unclear structures, components, and requirements by which ACOs will be designated.  Perhaps, these will bring unclear elements into focus, but what has not been mentioned should cause the greatest concern of all.  As ACOs prepare to open their “garages” for business, those who have not thought about how to reward drivers for better vehicle care may see their hypothetical bonuses become taillights in the distance.


1.    Lassetter, J. K.Preparing for Accountable Care Organizations. November 16, 2010; (accessed February 17, 2011).

2.    Shugarman, L.Achieving Person-Centered Care Through Accountable Care Organizations. February 10, 2011; (accessed

3.    Fisher, E.  and McClellan, M.Next Steps for ACO Implementation. June 24, 2010; (accessed 17, 2011).

4.    Fisher, E. S.; McClellan, M. B.; Bertko, J.; Lieberman, S. M.; Lee, J. J.; Lewis, J. L., and Skinner, J. S. Fostering accountable health care: moving forward in medicare. Health Aff (Millwood). 2009 Mar-2009 Apr 30; 28(2):w219-31.

5.    Sullivan, K.The History and Definition of the “Accountable Care Organization”. October, 2010; (accessed  February 17, 2011).

6.    Beaulieu, D.Who needs to be included in an ACO? February 2, 2011; (accessed February 17, 2011).

7.    Gold, J.Accountable Care Organizations, Explained. January 18, 2011; (accessed February 17, 2011).

8.    Yin, S.Berwick hints at what proposed ACO rule might address. February 4, 2011; (accessed February 17, 2011).

9.    Engelberg Center For Health Care Reform & The Dartmouth Institute.Toolkit. January, 2011 ; (accessed February 17, 2011).

10.    Vickery, D. M. and Lynch, W. D. Demand management:  Enabling patients to use medical care appropriately. J Occup Environ Med. 1995; 37(5):551-557.

11.    Jossi, F.Money matters: a BHCAG update from the Twin Cities. April, 1998; (accessed February 17, 2011).

12.    Torinus, J.How My Company Beat Rising Health Care Costs. September 9, 2010; (accessed February 17, 2011).


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