While the use of accountable care organizations to improve health care quality while holding down costs may be new to Medicare, the private sector has been successfully experimenting with similar initiatives since 2007.

Long before the passage of the Patient Protection and Affordable Care Act, which authorized Medicare's use of ACOs, Minnetonka, Minn.-based UnitedHealth Group Inc. was working with the Tucson Medical Center and area physicians to help reorganize the delivery system in southern Arizona.

And in June 2008, CIGNA Corp. launched its first accountable care program with the Dartmouth-Hitchcock health care system in Lebanon, N.H., building on the success of a medical home experiment involving a Phoenix-based multispecialty medical group practice started in October 2007.

In both instances, the objective has been to transform health care delivery by changing the payment system to reward for quality and outcomes rather than pay for volume.

“When you have too many different providers trying to coordinate care, that's when we see quality and cost get challenged,” said Benton Davis, Phoenix-based CEO of UnitedHealthcare Western States. “Our interest was to partner with them and help them transform from a disorganized collection of assets that provide care—including hospitals, physicians, etc.—into an organized health care delivery system.”

Among other things, UnitedHealthcare is providing technical support to help the health care system improve care coordination and to assess and manage risk, as well as financial incentives.

For CIGNA, the goal is to achieve the “triple aim” of improved quality, lower medical costs and improved patient satisfaction by creating a care model anchored in the principles of the “patient-centered medical home” that also builds in accountability by rewarding physicians for results, according to Wendy Sherry, vp of product development in the insurer's Bloomfield, Conn., headquarters.

CIGNA helps providers do this by sharing “gaps in care” data with a care coordinator at each physician's practice who contacts individual patients to ensure that follow-up appointments are scheduled; prescriptions are filled; or necessary, but not redundant, medical tests are conducted.