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Categorizing Accountable Care Organizations: Moving Toward Patient-Centered Outcomes Research That Compares Health Care Delivery Systems

A reporter once asked Mahatma Gandhi, the key leader of the Indian rebellion against British colonial rule, “Mr. Gandhi, what is your opinion of Western Civilization?” Gandhi thought for a moment, and then replied: “I think that it would be a very good idea.”

Given the high cost and variable quality of U.S. medical care, it would also be a very good idea if there were organizations that take responsibility for the cost and quality of care for their patients and that work proactively and systematically to improve their patients' health. Accountable care organizations (ACOs) are intended to be just such organizations (Crosson 2011; Lewis et al. 2013). If ACOs succeed, they will be a critical and lasting legacy of the Affordable Care Act, which led to the creation of the Medicare Shared Savings, Pioneer, and Advanced Payment ACO programs (Center for Medicare and Medicaid Innovation 2014). Some health insurance companies and state Medicaid agencies have also been signing ACO-like contracts with provider organizations (Song et al. 2012). The article by Shortell et al. in the current issue of Health Services Research, as well as other recent publications, shows that the number of ACOs has grown very rapidly in just a few years (Petersen, Muhlestein, and Gardner 2013; Muhlestein et al. 2014). Details of the contracts vary, but the ACO contracts of both public and private payors give ACOs financial incentives to contain the overall cost of care for a defined group of patients whom the payor “attributes” to the ACO, as well as incentives to score well on measures of patient experience and of the quality of care.

Shortell et al. make four useful contributions to the study of ACOs and to health services research more generally, based on their first national survey of ACOs that is a milestone in itself:

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