Accountable Care Organizations

An accountable care organization (ACO) is a group of health care providers who work to deliver coordinate care and are collectively accountable for the cost and quality of care.

ACOs have received a great deal of attention and press through peer-reviewed articles and news stories, and various efforts are underway to develop tools needed to be a successful ACO. Success in an ACO world is different from success in a capitated environment, where the focus is only on managing costs. In an ACO, providers have at least some financial responsibility and they are also accountable for the quality of care they provide. How does an ACO succeed in this environment of dual responsibility for costs and quality? How do pharmaceuticals fit in? It will be important to understand the role of pharmaceuticals in helping ACOs succeed in meeting financial and quality targets.

The Role of Pharmaceuticals in ACOs

Pharmaceuticals have a critical and unique role to play in ACOs, where the value-based environment will call for a greater emphasis of pharmaceutical management. For example, the Centers for Medicare and Medicaid Services' quality measures for a variety of conditions, such as congestive heart failure (CHF), directly involve pharmaceuticals. For these conditions, pharmaceuticals will play an important role in reducing costs and improving quality for ACOs. Despite accounting for a small portion of overall costs for the treatment of a condition like CHF, pharmaceuticals have demonstrated a potential to significantly reduce costs through their role in preventing hospitalizations. Efforts to focus on outpatient medical management and the prevention of hospitalizations through medication could lead to lower costs and higher quality for ACOs.

ACO Best Practices Case Studies

In conjunction with seven provider organizations, the National Pharmaceutical Council (NPC) and its partners, The American Medical Group Association (AMGA) and Premier, Inc., developed a framework to better understand role of pharmaceuticals in achieving success in a value-based ACO model. The costs and benefits of medications in various conditions were considered and the article was published as a web exclusive in the July 2012 issue of the American Journal of Managed Care.

A follow-up study, “Are ACOs Ready to be Accountable for Medication Use?” was published in the January 2014 issue of Journal of Managed Care & Specialty Pharmacy. (View the related infographic.) An updated study, “Optimization of Medication Use at Accountable Care Organizations,” was published in the October 2017 issue of the Journal of Managed Care & Specialty Pharmacy. (View the updated infographic.)

To address gaps discovered in implementation readiness, NPC and its partners reviewed four ACO case studies highlighting best practices discovered for each: