16 Pros and Cons of Accountable Care Organizations

Accountable Care Organizations (ACOs) are groups of healthcare providers, hospitals, and doctors who come together to voluntarily provide coordinated high-quality care to patients in the United States who have Medicare. The goal of this system is to ensure that each patient receives the correct care at the proper time while working to avoid unnecessary service duplication. By placing the focus on the patient, the goal is to prevent medical errors that can sometimes creep into the system.

When Accountable Care Organizations succeed in their goals, then the savings they achieve by spending money more wisely and being more efficient with their services benefits their profit margins and the Medicare program itself. More than 50% of the U.S. population lives in an area that is served by at least one ACO. Athena Health notes that 28% of Americans live in a region served by 2+ of these networks.

Up to 43 million patients, including some non-Medicare individuals, receive coverage through this model.

60% of health plans today say that they anticipate a switch to pay-for-outcome medicine instead of the current system of fee-for-service that providers have used to bill patients for the past 30 years. With their emphasis on value-based payments, now is the perfect time to consider the pros and cons of Accountable Care Organizations to see if one is right for you.

List of the Pros of Accountable Care Organizations

1. It creates better communication throughout the entire exchange.
Accountable Care Organizations work to promote health information exchanges which allow all of the providers in the network to communicate more efficiently with one another. This process creates an effective data exchange that makes it easier to coordinate the care of each patient so that service duplication is minimized. Because this advantage is one of the necessary goals for Stage 2 or Stage 3 certification in the United States, joining an AOC can give a provider a head start on their requirements while patients see an improvement in their overall care.

2. There are cost advantages to consider when joining an AOC.
When you join up with an Accountable Care Organization, then you will not have to pay for all of the expenses of improved patient care by yourself. Shared risks mean that there are responsibilities to share at the same time. Building the network together helps to defray the costs that all members face as everyone works to upgrade the patient care process.

When you join with other providers, then you will also gain access to a wider net of data aggregation, obtain better population health control, and have more options to offer for your patients when they receive Medicare coverage. There is even better financial security if you practice on your own because the ACO gives you the opportunity to lean on fellow members for the aid that is necessary for new investments that benefit everyone.

3. It provides an opportunity to offer more comprehensive care.
Accountable Care Organizations allow patients to receive more comprehensive care whenever they need to visit a medical provider. This advantage means that the average person feels like their doctor, nurse, or specialist cares about their health outcomes. It becomes possible to offer more significant benefits to each person as well, such as a care planning liaison. ACOs can even theoretically provide tailored services to everyone because reimbursements only occur of medically necessary procedures and tests. By focusing on the value of the outcome instead of the number of services offered, a patient’s interdisciplinary care team can improve the accuracy of each diagnosis, support patients with multiple conditions better, and reduce the discomfort associated with managing chronic diseases or complex cases.

4. ACOs are the system that payers want to see in American care.
Most payers want to see a system that is similar to Accountable Care Organizations throughout the United States. That is why many providers see the structure of an ACO as the future of medicine. The financial side of this voluntary network also provides a robust case for implementation since it shares risks and increases rewards. You are working harder to coordinate the care of your patients, which means their outcomes improve while you can earn more through the provision of value.

That means essential care needs, such as preventative medicine, patient engagement, and home monitoring can help to provide better outcomes without a financial sacrifice. Instead of seeing the family doctor as the decision-maker, families are starting to see them as partners in a continuum of health and wellness.

5. It allows physicians to start driving the care plans instead of the insurance agencies.
Many of the physicians who decided to join an Accountable Care Organization find the emphasis of this voluntary network allows them to pursue the good that they wanted to do when attending medical school. ACOs ask them to guide the healthcare delivery system, and then provides the tools which are necessary to empower better patient care at every level. By leading this change with the most experienced providers in the industry, it becomes possible to save lives, improve patient access, and create a fulfilling career experience.

6. There is already evidence to suggest that the AOC model can be successful.
North Carolina primary care physicians jointed together to create a statewide network of 14 different medical home Accountable Care Organization networks. Although the medical providers in these groups have seen an increase in their work, they started with several Medicaid initiatives and found numerous rewards waiting for them.

The medical providers from this example are experiencing a renewed empowerment and leverage of their interests as they contract with facilities and payers. Even though there is uncertainty, there is also more resolve because each doctor feels like they are more prepared to face the upcoming changes to the healthcare system in the United States.

7. It can eliminate some of the expenses that patients pay.
One of the advantages that medical providers can give to patients through the ACO model is a reduced cost for better access. It is not unusual for there to be an elimination of all out-of-pocket charges for certain screening and preventative care needs. This improvement leads to better health outcomes at the individual level, which means the community feels more satisfied with the care they received.

8. There is full availability of a patient’s medical history.
Thanks to the inclusion of electronic health records in the Accountable Care Organization format, everyone on a patient’s care team has full access to their medical history whenever it is necessary for a review. That saves time during the appointment because less paperwork is needed to provide an accurate diagnosis. There are fewer transfers of hardcopy data as well, with even CAT scans and MRIs readily available for all members to review. This process results in more control and involvement in healthcare for the physician and the patient.

List of the Cons of Accountable Care Organizations

1. The cost of the IT infrastructure can be daunting to medical providers.
If an Accountable Care Organization wants to experience success, then it must invest in a strong accountable care network, which comes at a significant expense. Many healthcare facilities are behind on their IT infrastructure investments, which means almost every facility must start contributing more than the minimum needed to create meaningful use opportunities. The smallest practices in an AOC often need to evaluate whether the immediate returns of this disadvantage are worthwhile as they face ICD-10 and the Stage 2 process.

2. Sharing everything means that you also concede some decision-making opportunities.
Accountable Care Organizations share everything, which means you will also start sharing some of the decisions that are made in the network. When you have a group of practices coming together, with each one pursuing its own individual vision, mission, and set of priorities, then there can be considerable consternation present when splitting up a bill or choosing a new direction to take.

Medical providers who value their independence as a practice must consider how joining an ACO will change their governing policies before joining the organization. You will not get the final say on every decision that happens when you are part of the network.

3. There can be challenges with data security for your patients.
Because the new health-based IT systems in Accountable Care Organizations increase the amount of information being exchanged between providers, there will be more eyes on every patient chart. Data security and patient privacy concerns are becoming an increasingly essential component of joining this network. All providers in an ACO must coordinate with one another to ensure that the HIPAA regulations are strictly followed with every transfer. Proactive actions must take place to prevent the incorrect or improper use of sensitive patient information.

Providers trying to manage this disadvantage will also need to work with their patients to make sure that they don’t feel like they are being passed around the network under the guise of comprehensive care. Seeing multiple people means there can be several different opinions about how to implement a treatment plan.

4. Medical providers must start to adapt to new ways of doing things.
Doctors, nurses, and physicians are not always the most eager group of people to embrace change. Accountable Care Organizations require people to adapt to a changing environment in the healthcare industry. We have already started to see older doctors opt for an early retirement instead of joining an ACO because they don’t want to change the way that they practice medicine.

There will be growing pains when considering the pros and cons of an Accountable Care Organization. When medical providers can take the necessary steps to press forward on this journey, then better healthcare will result from the new ideas. The reality of American health is that ACOs are here to stay. It is up to each provider to determine if they wish to embrace the concept.

5. There will be more patients that come through your medical practice.
One of the first complaints that medical providers have after joining an Accountable Care Organization is that the number of patients who come through their doors can increase exponentially. Many doctors, nurses, and specialists feel like they are overworked and burned out because of the changes that the typical AOC mandates when joining this voluntary network. It is not unusual to feel like there is not enough time or resources to provide meaningful care opportunities to the people you see. Even if you can find the necessary energy, there may not be enough remaining intellectual bandwidth to feel like you should be getting involved with a patient’s treatment plan.

6. AOCs do not offer a guarantee of success.
There can be some lucrative incentives for physicians to join Accountable Care Organizations today. You can also feel that there is a level of uncertainty for providers of any size, including hospital-based AOCs, because everyone in the healthcare industry has weathered the promise of the “next big thing” that doesn’t seem to work as advertised. You might find yourself joining an AOC as a provider only to find out that you earn less, work more, and have more exposure to liability because of the actions that other members take.

7. You may be fronting a significant number of the costs in an AOC.
Because the structure of Accountable Care Organizations allows any provider to join the volunteering at work, you might find that equal members do not have the same amount of capital to invest in the system as you do. These other providers might not even have legal or business consultants on retainer that can help them make positive decisions while still caring for their patients. Even though you must start sharing in the decisions that get made within your community, you could pay an unequal share of the expenses that the network faces.

8. There is a time element to consider with Accountable Care Organizations.
After the changes to the healthcare system in the United States that started in 2010, medical providers are already finding themselves in a time shortage when trying to provide care to their patients. The effects of an overloaded system mean that there are not enough providers in place already to handle the health and wellness needs of a community. Many doctors struggle to manage the primary care needs of their current clientele. By joining an Accountable Care Organization, you are voluntarily offering to take on even more responsibilities.

The pros and cons of Accountable Care Organizations show us that the future of healthcare in the United States is a model where value is emphasized over quantity. It is a landscape that encourages more communication across all providers to ensure patients have the quality of care they deserve. The emphasis of this system is on Medicare and Medicaid coverage right now, but these voluntary networks are also looking at ways to help those with private insurance as well.

Blog Post Author Credentials
Louise Gaille is the author of this post. She received her B.A. in Economics from the University of Washington. In addition to being a seasoned writer, Louise has almost a decade of experience in Banking and Finance. If you have any suggestions on how to make this post better, then go here to contact our team.