Accountable care organization were proposed in conjunction to the Patient Protection and Affordable Care Act as a potential way to control and reduce costs associated to patient care without sacrificing the benefits such as access to care, care continuum and good outcome quality of care. The ACA act was important due the increased National expenditure on Healthcare. The below graph shows the U.S. expenditure on healthcare. The total expenses accounts to about 17% of the national GDP, and almost equal to 3 trillion for the year 2012 (Bower & Norris, 2012). Some of the facts about healthcare situation in U.S are as follows: (HealthCare.gov, 2012) One in four and two out of three Americans over the age of 65 suffer from multiple chronic conditions. 93 % of Medicare fee-for-service expenditures accounts to Care for beneficiaries with multiple chronic conditions 1 in 7 Medicare patients admitted subjected to a harmful medical mistake 1 in 5 Medicare patients readmitted within 30 days of discharge The above facts show that even though there is large amount of resources spent on healthcare, the outcomes are poor in terms of quality and overall patient satisfaction. This necessitated a major change in the U.S. healthcare field and this was bought in by the Patient Protection and Affordable care act of 2010 passed by the Obama Government. This is also nicknamed as Obama Care. Few notable points of ACA 2010 Act were: (Daemmrich, 2011) Daemmrich, A. (2011). US Healthcare Reform: Reaction to the Patient Protection and Affordable Care Act of 2010. Harvard Business School BGIE Unit case, (711-103). The act provisions for extended healthcare of childrens Broaden the horizons of prescription drug coverage in case of elderly Quick Elimination of annual or lifetime coverage cap Mandate for every American citizen to obtain insurance coverage by 2014 Program to implement long term care for the elderly Lower heath care cost and improve quality To protect the healthcare consumers from the abuses of the Insurance companies based on patients gender or past medical history Creating an Early reinsurance Program The act allows young people to remain under the health care plan of their parents to the age of 26 Improving Medicaid to bring in more low income Americans under the provision Provide Subsidy and financial assistance to low and middle income Americans to facilitate buying insurance The Act also talks about imposing a limit on contributions to Flexible spending accounts (FSAs) to about $2500. This would allow for payment of healthcare cost accommodating Pre-tax funds, facilitating the pay for a portion of healthcare reforms expenditure/costs. It also talks about creating a central repository for heath insurances which can be used by public to compare policies and rates. (Hulse,2009) (Hulse, C., & Pear, R. (2009). Sweeping Health Care Plan Passes House. New York Times, November, 7, A1) Some more changes were bought in 2011 for the original Act. Some of the notable points are : Medicare covered prevention services were removed from deduction process Co-pay of Medicare was eliminated Stricter rules on Insurance Companies making sure that at least 80% of premium collected on medical services Cut down expenditure on advertisement and salaries Justification to be submitted by the insurance companies for rate hikes Funds to increase the number of community health care centers, Providers such as doctors and nurses Affordable Health care to all segments of society The major inclusion in the ACA 2010 was the necessity to provide care based on reduced cost, improved quality and providers assuming responsibility of outcomes. This idea led to the birth of a new form of healthcare organizations called as Accountable Care Organizations (ACO). The credit of coining this name goes to two men, Elliott Fisher, M.D., of the Dartmouth Institute for Health Policy and Clinical Practice in Lebanon, N.H. and Glenn Hackbarth, chairman of the Medicare Payment Advisory Commission. The ACO touted the concept were all the providers responsibility of a group of population, take up risk and also obtain a part of savings because of such collaboration. Building an accountable care organization is mostly assumed as the Holy Grail as they help to figure out how to improve the quality of patient care and keep the care continuum as they brace in the growth of bundled payments. The major motives for formation of ACO were: Improve the quality of care Reduce the cost of the overall healthcare expenditure Hold the providers accountable for the outcome Address the deficiency in terms of use of Information technology, Continuum of care and fragmented healthcare setting Improve healthcare quality, Reduce cost growth, Increase patient satisfaction Accountable Care Organizations (ACO) An organization of healthcare providers that agrees to be accountable for the quality, cost, and overall care of Medicare beneficiaries who are enrolled in the traditional fee-for-service program who are assigned to [the organization] Source: https://www.cms.gov/OfficeofLegislation/Downloads/AccountableCareOrganization.pdf ACOs create incentives for health care providers to work together to treat an individual patient across care settings including doctors offices, hospitals, and long-term care facilities (HealthCare.gov, 2012) The PPACA 2010 signed into law by President Obama helps in creating new centers, innovative pilot programs and incentive testing payment model and delivery system. This also provisioned projects to demonstrate the budding of Accountable care organizations.