Abstract
The development of accountable care organizations (ACOs) is an appropriate goal for delivery system reform. The Medicare program can be instrumental in starting the necessary transformations in payment design, incentives, and delivery system structure. Payment reforms are critical; should come first; and may need to be substantial, cumulative in impact, and dramatic in design. Learning from successful models of physician-hospital integration and creating new models that can pass legal, regulatory, and antitrust concerns will be needed, if the promise of ACOs is to be fulfilled.
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