As healthcare has become a nationwide issue, a significant effort among healthcare providers is to coordinate care. Out of this effort, formations of Accountable Care Organizations were initiated in 2009 as part of the Affordable Care Act (Burton, 2018). ACOs are loosely defined as a collection of providers: doctors, hospitals, health plans, and other health care constituents, who voluntarily coordinate to provide better high-quality care to a population of patients (Besanko, 2016).
If the ACO succeeds in both delivering high-quality care and overall cost savings, they can utilize the savings for themselves (“Accountable Care Organizations”, 2018).
The Centers for Medicare & Medicaid Services (CMS) state that “The goal of coordinated care is to ensure that patients get the right care at the right time while avoiding unnecessary duplication of services and preventing medical errors” (“Accountable Care Organizations”, 2018). This is accomplished by placing a higher focus on the use of patient data.
As mentioned early, Physicians are more in control due to the use of the newest Electronic Medical Record software and can conduct better analytics from patient data points (Besanko, 2016).
An Example of Application in Another Industry
At its face, ACOs attempt to improve the individual by looking at the whole. This model cannot be applied broadly across most industries due to the high level of market participation for one single consumer’s transaction.
One situation where the ACO model can be applied to another business is the auto business. Due to the fragmentation of automakers, dealerships, service shops, and insurance, the consumer takes the massive hit financially through many inefficiencies. Instead, coordinated auto organizations can be formed by the above-mentioned market participants working together to maintain a healthy fleet of vehicles. If the goal of these organizations were to ensure safe vehicles on the road, it would ultimately save lives.
References
Accountable Care Organizations (ACOs). (2018, May 03). Retrieved January 15, 2019, from https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ACO/
Besanko, D., Dranove, D., Shanley, M., & Schaefer, S. (2016). Economics of Strategy (7th ed.). John Wiley & Sons, Inc.
Burton, D., MD, & Haughom, J., MD. (2018, October 17). What is an ACO? Definitive Guide: Accountable Care Organizations. Retrieved January 16, 2019, from
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