A Decade of ACOs in Medicare: Have They Delivered on Their Promise?

Abstract

Accountable care organizations (ACOs) were envisioned as a way to address both health care cost growth and uneven quality in US health care. They emerged in the early 2000s, with the 2010 Affordable Care Act (ACA) establishing a Medicare ACO program. In the decade since their launch, ACOs have grown into one of Medicare's flagship payment reform programs, with millions of beneficiaries receiving care from hundreds of ACOs. While great expectations surrounded ACOs' introduction into Medicare, their impacts to date have been modest. ACOs have achieved some savings and improvements in measured quality, but disagreement persists over the meaning of those results: Do ACOs represent important, incremental steps forward on the path toward a more efficient, high-quality health care system? Or do their modest achievements signal a failure of large-scale progress despite the substantial investments of resources? ACOs have proven to be politically resilient, largely sidestepping the controversies and partisan polarization that have led to the demise of other ACA provisions. But the same features that have enabled ACOs to evade backlash have constrained their impacts and effectiveness. After a decade, ACOs' long-term influence on Medicare and the US health care system remains uncertain.