Accountable care organizations: principles and implications for hospital administrators

With the passage of the Affordable Care Act (ACA) in 2010, broad agreement has been reached on the need for fundamental reform of healthcare delivery and payment systems. Accountable care organizations (ACOs) have become one of the most discussed provisions of the ACA, and Medicare's Shared Savings Program (SSP), the incentive program tied to ACOs, has the potential to change the delivery of healthcare. The SSP will attempt to improve the quality of care while reducing the growth in expenditures by encouraging the formation of ACOs. The SSP is voluntary, and organizations that wish to participate will encounter advantages and disadvantages in its adoption. This article provides hospital administrators with basic information about the ACO requirements set forth by the Centers for Medicare & Medicaid Services and helps frame decision making about hospital participation in ACOs.