If the concept of Accountable Health Care Organizations (ACOs) is to work – and not become another over-hyped and unsuccessful fad – then the country needs to focus less on the question of control and more on the issue of workability. Broadly speaking, our country needs to re-align payment incentives to provide patients more coordinated care in an environment where resources are limited. This will involve rewarding high quality and efficient care and providing disincentives for practices and treatments that fall short.

Health plans are developing partnerships with hospitals and clinicians to achieve these objectives. We can provide support for providers to move away from fee-for-service care toward a more interconnected delivery model through tools and techniques to utilize data to manage risk, identify gaps in care, and provide the necessary infrastructure to connect patients and providers. Path-breaking initiatives are currently underway in the states that can be a building block for future ACO models. For example, health plans are working with the Tucson Medical Center Collaborative and with delivery systems in Louisville, Kentucky to achieve a value-based health care delivery system. In other parts of the country, health plans are pursuing equally innovative approaches to improving quality by recognizing and rewarding physicians and hospitals for demonstrating outstanding performance, as well as following best practices and making measurable improvements over time.

These strategies are illustrative of the varied approaches and flexibility in ACO design that are necessary for success. A recent white paper by the Deloitte Center for Health Solutions found that “successful ACOs are more likely to have specific competencies in …operational and clinical effectiveness, IT and infrastructure, risk management and workforce organization.” These are areas in which health plans have a long history of success in pioneering innovative solutions and our commitment is to bring these skills to new delivery models. If all stakeholders approach this challenge from the perspective of shared responsibility, then the country will see real progress. If ACOs become synonymous only with strategies to increase reimbursement or to increase provider concentration, then a game-changing opportunity will be lost. It will be up to policymakers to ensure this isn’t the case.

A recent op-ed in the Boston Globe written by a senior executive at UMass Memorial Health Care urged a paradigm shift in our health care delivery system. He stressed the necessity of teamwork among providers in a health care delivery system built around a culture of autonomy and independent practice. This culture shift is necessary throughout all sectors of the health care delivery system. We need to work together across all disciplines and sectors in order to achieve the shared goals of improving quality and efficiency of care while lowering costs.

When it comes to providing the best possible care, clearly it’s the patient who’s “boss.”

While practitioners and providers have complex relationships (acting as competitors as frequently as they work as partners), all of us would agree that improving the health care system depends on coordinated, longitudinal care between multiple practitioners and settings. The real question is whether we can create a culture of shared accountability and responsibility, even as we work to achieve meaningful, sustainable change.

The ACO is an innovative payment mechanism to incentivize the reengineering of care delivery. For example, one of the payment models envisioned (under a fee-for-service environment) is shared savings as a means of improving efficiencies.

To create sustainability, however, we need to change our culture in tandem with changing the delivery system. We also need to ensure that the future health professional workforce learns how to practice and lead in this new environment. The comprehensive concept of a healthcare innovation zone (HIZ) has been developed with these purposes in mind.

An HIZ is a geographic region containing an academic medical center and other clinical and non-clinical entities that provide the full spectrum of health care services to a defined population. HIZs complement ACOs in that they have a teaching hospital component that offers critical services to a network of care regionally or nationally. They are also more likely than ACOs are to achieve the scale necessary for expanding new models of delivery across larger populations. And, because of their link to academic medical centers, HIZs will train new physicians, nurses, and other health professionals in new delivery models; these professions will, in turn, serve as “change agents” for future generations.

ACOs, in many ways, can be stepping stones to HIZs and to achieving meaningful change. Only by creating a culture of shared accountability and responsibility can we ensure it’s the patient who stays “boss.”

This is a complicated issue. Clinicians, patients and payers should have input about the design and function of a new structure. For example, the ACC believes an ACO should reward providers for reducing unnecessary and discretionary services but not denying necessary care. ACO members also should not be at risk for costs they can’t control.

My concern (and that of the ACC) is that 85 percent of Americans’ health care delivery system is not organized in an ACO-friendly manner. As I’ve stated publicly, if the ACO idea flies with inherent bonuses and payment incentives, the integrated systems will rightfully take off with these new advantages, but others will be left in the dust. That’s why we’ve pioneered a third path to becoming an ACO over time, rather than just sticking with the fee-for-service status quo.

Our approach is to create a virtual group practice model around a registry-based voluntary group of primary and specialty physicians with new Medicare incentives for increased reimbursement if they produce higher quality and value through such activities as reducing re-admissions, improving appropriateness of imaging, reducing variation and/or other quality-related activities.

We envision three kinds of incentives as being necessary in this pilot: one for patients, perhaps lower co-pays for participating; one for hospitals, perhaps higher diagnosis related groups for working with doctors to ensure the transition from inpatient to outpatient care goes smoothly and safely; and one for the physician and care team participants in some sort of quality program. If this kind of pilot project were to be tested, we believe it could forge a glide-path from uncoordinated small and solo practice toward ACOs comprised of virtual groups working with patients and hospitals to improve care.

Maybe some of these virtual groups would decide to incorporate and be fully capable of actually distributing funding to their members as they gain trust and comfort that such new payment systems could actually work to the benefit of all.

In April, the ACC hosted a large specialty and state society organizations and one of the topics discussed was payment reform. On the “to do” list is forming a large multi-specialty working group to make recommendations about ACOs, data standards and quality improvements that will be formed in the coming weeks.

As the budget experts at the Congressional Budget Office remind us, health care costs in America are on an upward trajectory that we simply cannot sustain. Unless our health care system wrings better value from the dollars we are spending on health care, rising costs will force us to confront terrible choices in the future… about who to drop from insurance roles, about what services have to be cut.

Accountable care, wherein providers work together and are compensated for improving the health of a defined set of patients, is the off-ramp from today’s unsustainable path. Its pioneers, Geisinger, Intermountain, and the Mayo Clinic, deliver care that costs as much as 41% less than the national average. They do this not by skimping on care, but by delivering care better.

To help spread these approaches, this year’s health reform law provides for a shared savings program within Medicare that will nudge more health care providers toward accountable care models. It is heartening that the national hospital alliance Premier Health saw the opportunity and took steps last week to restructure for accountable care.

However, there is much more work to be done. Over the next few years, providers and payers will test a variety of alternative approaches and institutional models. Proponents of independent physician associations will have a chance to prove their worth as an organizational vehicle for delivering accountable care. Providers, policy-makers, and payers will wrestle with challenges ranging from coordinating public and private payers to ensuring ACOs do not contribute to costly concentration of provider market power.

Some approaches will undoubtedly fail to deliver truly accountable care by falling short on cost or quality. Some will succeed. Strong leadership from the public and private sectors is required to ensure that the best ideas are replicated across the country by all payers.

But if America does manage to apply the lessons it learns from the pioneer ACOs like Intermountain, Geisinger, and Mayo Clinic, consumers will get excellent care - without bankrupting their family or their country.

The recently enacted health reform law includes several provisions designed to enhance the spread of Accountable Care Organizations (ACOs), a strategy that encourages providers to take more responsibility for quality while reducing the overall growth of health care costs. Like many of the important payment and delivery system reforms included in the Affordable Care Act, widespread participation and rapid testing of ACOs will be key to effective implementation and meaningful change. As such, policymakers must encourage a variety of provider configurations—from large integrated delivery systems and multispecialty group practices to smaller independent practice organizations and naturally occurring networks—to take part in pilot programs and demonstration projects.

While organizations of all sizes should be allowed to participate in new ACO pilots, a minimum set of capabilities should be demonstrated to ensure that a provider group has the capacity to assume responsibility and deliver superior outcomes for a defined group of patients. This could include, at minimum, explicit agreements among providers across the continuum of care regarding expectations, responsibilities, communication, and the flow of clinical information. To that end, health information technology infrastructure, performance reporting capability, and quality improvement activity could be used to establish minimum thresholds for provider participation.

Commonwealth Fund case studies have identified additional organizational design features that promote high performance and could be considered when establishing minimum requirements for participation in ACO payment pilots. These include a culture of continuous quality improvement, alignment of financial incentives with goals, and a governance structure that engages physicians and hospital leaders. A non-profit, mission-driven orientation that promotes public reporting and transparency also contributes to success. Participation in local or statewide coalitions, quality campaigns, and quality innovations are further drivers of high performance.

Given the variety of provider configurations and organizational design parameters new ACOs may take, the organizations should meet performance standards and be accredited. It will also be particularly important to establish a comprehensive system for performance monitoring and rapid data feedback. Close attention to indicators of clinical quality, patient experiences, risk-adjusted total cost per patient, and health outcomes would gauge the performance of ACO pilots and track the overall progress of the U.S. health system. Monitoring important investments in payment and delivery system reforms like ACO pilots will help ensure that the Affordable Care Act delivers on its significant promise to bring about a high performance health system that works for all Americans.

An ACO is an HMO on steroids.

There will be multiple approaches to creating and implementing Accountable Care Organizations, and we believe that the most successful ACOs will be physician-led and patient-centric. This is the best way to achieve the goal of reducing costs and optimizing the quality of patient care.

One of the biggest challenges to the success of new payment and delivery models is making sure that physicians in practices of all sizes can participate. This includes the many physicians who deliver care in small practices, ranging from solo practices to groups of 5-9. Independent Physician Associations (IPAs) present one model for physician practices to clinically integrate to manage quality and costs. They are already working in some areas of country, and AMA will be rolling out educational resources for physicians this month to help them participate in ACOs and other delivery innovations like bundling and medical homes.

The bottom line is that these different approaches need to be developed, tested and refined so we can see what works best.