Accountable Care Organization (ACO) —
A type of organization created by the Patient Protection and Affordable Care
Act (PPACA). ACOs offer financial incentives for healthcare providers to band
together to better coordinate services for groups of patients and thereby
improve the quality of care, all while lowering costs. Another focus of ACOs is
to promote a reduction in hospital readmission rates for certain conditions,
such as heart attack/heart failure and pneumonia.
ACOs can include primary care physicians, specialist physicians, hospitals,
or other types of healthcare providers. Under the provisions of the ACA that
created ACOs, if an ACO achieves certain quality targets, the resulting savings
are divided between the various providers who are part of the ACO.