In an ACO, how are healthcare providers typically compensated?

In an Accountable Care Organization (ACO), healthcare providers are typically compensated through bundled payments for patient care. This payment model aligns financial incentives with the quality of care provided, rather than the volume of services rendered. Bundled payments mean that a single payment is made for a predefined set of services related to a specific condition or treatment episode. This encourages providers to coordinate care effectively and manage resources efficiently, ultimately aiming for improved patient outcomes and satisfaction.

The rationale behind this compensation model is to promote a more integrated approach to healthcare delivery, where providers work collaboratively to ensure that all aspects of a patient's care are addressed, rather than focusing solely on individual tests or visits. By using bundled payments, ACOs incentivize providers to prioritize value over volume, fostering a system that is aimed at reducing unnecessary procedures and costs while improving overall patient care.