Who benefits from Accountable Care Organizations?

Accountable care organizations (ACOs) are networks of physicians, other health care professionals, and hospitals who assume responsibility for the quality of care and costs for a cohort of patients. Under this alternative payment model, ACOs are incentivized to lower costs for the cohort compared with a historical benchmark, with the promise of receiving a share of savings if they are also able to achieve quality-of-care targets. The Medicare Shared Savings Program is the prototype model for ACOs and is the largest value-based care initiative in the US. The original Medicare Shared Savings Program ACOs had a 1-sided model with only the possibility of shared savings; however, since 2018, Medicare ACOs are now required to eventually adopt a 2-sided model in which they also take on risk and share financial losses if they are unable to meet financial targets. As of 2026, 14.3 million Medicare beneficiaries are estimated to be current participants in ACOs. The strategies by which ACOs produce health care savings include reducing acute care services, such as preventable emergency department (ED) visits and hospitalizations, and increasing preventive health care. Given the population health orientation of ACOs, there has been some thought that ACOs may reduce health inequities because programming related to care coordination and chronic disease management may preferentially benefit patients with low incomes.