Is the Illinois Medicaid model a sign of things to come regarding Accountable Care?


Accountable care organizations (ACO’s) are continuing to proliferate.  Despite early comparisons to the Health Maintenance Organizations (HMO’s) which expanded rapidly in the late 1970’s and 1980’s after the Health Maintenance Organization Act of 1973, accountable care organizations appear to be here to stay.  One major difference is that, unlike HMO’s, ACO’s are not insurance companies.  Rather, they are provider organizations that have agreed to take on some form of financial risk in exchange for delivering high care quality at lower costs.  These objectives align with our nations’ triple aim[1] of:

  • lowering the cost of healthcare,
  • improving population health
  • improving the patient experience (including quality and access)

As a result, there is a steady growth taking place with over 20 million lives now estimated to be covered under an ACO which is up from ~10m in July 2012 and ~5m in July 2011 according to a recent update by Leavitt Partners’ Center for Accountable Care Intelligence[2].

While there are many forms of payer organizations participating in aco’s, growth in Medicaid ACO’s have been particularly significant.  Three states alone (Utah, Colorado and Oregon) have a total of 2.1 million lives covered.  Another state, Illinois (with 22% of the state being currently enrolled in Medicaid) has embarked on a statewide Medicaid ACO program.  The goal is to have all such patients moved into Accountable Care Entities (ACEs).  A couple of the unique components of the program include the fact that it is provider organized and that there is a gradual plan to transition from fee-for-service to shared savings/risk to full risk over a three year period.

As technology solutions evolve to enable better visibility into population risk, provider organizations are increasingly banking on their ability to more efficiently deliver quality care.  While the jury is still out on the financial success of aco’s, the fee-for-service environment appears to be a less viable model going forward.



[1] Institute for Healthcare Improvement (IHI).

[2] Growth and Dispersion of Accountable Care Organizations: June 2014 Update, Leavitt Partners

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