A Taxonomy of Accountable Care Organizations for Policy and Practice

The Affordable Care Act (ACA) granted the Centers for Medicare and Medicaid Services (CMS) the authority to create accountable care organizations (ACOs) with the intent that this new payment and delivery model might help achieve the triple aim goals of better quality of care, greater population health, and lower growth in health care cost (Berenson and Devers 2009; Shortell and Casalino 2010; Colla et al. 2012; Fisher et al. 2012). Private insurers and Medicaid programs have also begun to contract with ACOs (Larson et al. 2012; McGinnis and Small 2012; Lewis et al. 2014). ACOs are entities that take responsibility for both the cost and quality of care for a defined population of patients. Although there are a variety of different payment arrangements, the key idea is that the ACO has financial incentives to improve quality based on predefined criteria and keep overall costs within a target budget. But given the historical difficulty of bringing together hospitals, physicians, and other delivery organizations to provide integrated care, the ACO concept has met with skepticism (Burns and Pauly 2012; Mathews 2012; Christensen, Flier, and Vijayaraghavan 2013). Yet today, there are an estimated over 600 ACOs, both federal and private, with diverse organizational attributes (Larson et al. 2012; Lewis et al. 2014; Muhlestein, Crowshaw, and Pena 2014). With so much activity under way and so little known about the ACO model (Fisher et al. 2012), there is a great need to understand these new organizations; identify some of the characteristics that may be associated with their success or failure; help target needs for technical assistance and support; and measure their progress in achieving performance goals (Fisher et al. 2012; Kroch et al. 2012; Larson et al. 2012). With these objectives in mind, we develop a conceptually based exploratory taxonomy of ACOs that policy makers, practitioners, and researchers can use to achieve the above objectives.