The concept of accountable care organizations (ACOs) has been set forth in recently enacted national health reform legislation as a strategy to address current shortcomings in the U.S. health care system. This paper focuses on implementation issues related to these organizations, building on some initial examples. We seek to clarify definitions and key principles, provide an update on implementation in the context of other reforms, and address emerging issues that will affect the organizations' success. Finally, building on the initial experience of several organizations that are implementing accountable care and complementary reforms, we propose a national strategy to identify and expand successful approaches to accountable care implementation.

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Prepaid group practices (PGPs) multispecialty groups that vertically integrate the organization, financing, and delivery of health services to a specific population—were once viewed as the most cost‐effective and efficient model for achieving national health care reform (e.g., McNeil and Schlenker 1981; Saward and Greenlick 1981). Policy reformers who extolled the benefits of health maintenance organizations (HMOs) in the late 1970s and early 1980s emphasized in particular the cost and quality advantages of PGPs vis‐à‐vis solo and single‐specialty fee‐for‐service (FFS) providers. A comprehensive review of comparative empirical studies (HMOs versus FFS) since 1950 concluded that the total costs for HMO enrollees were 10 to 40 percent lower than those for comparable enrollees with conventional indemnity insurance (Luft 1978). Although PGPs did not originate as a competitive response to fee‐for‐service indemnity health insurance, many proponents viewed them as a promising means of helping contain rising medical costs, encouraging a more rational allocation of health care resources, and improving the access to and delivery of quality services (McNeil and Schlenker 1981).

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