Healthcare Analytics, Population Health Management, Healthcare Big Data

Population Health News

How Does an ACO Differ from the Patient-Centered Medical Home?

By Jennifer Bresnick

- There are few things that healthcare regulators like more than a good acronym. With alphabet soup like PCMH, ACO, MSSP, VBR, and FFS, it can sometimes be difficult to tell what the real differences are between the various quality and value-based reform options available to providers.

patient-centered medical home

After understanding what the patient-centered medical home is and how it’s structured, the next question to ask is how the PCMH model stacks up against another familiar initiative: the accountable care organization (ACO).

In this installment of’s practice transformation series, we will break down the differences between the patient-centered medical home and the accountable care organization to help healthcare providers choose a strategy for performance improvement, population health management, and quality patient care.

Different paths, different purposes

Both the patient-centered medical home and the ACO models are intended to help healthcare providers move away from volume-based, fee-for-service reimbursement and towards a more individualized, managed patient ecosystem, but each achieves this in a slightly different way.

READ MORE: Establishing the Basis for Accountable Care Organization Success

The PCMH requires providers to expand access, improve chronic disease management, and focus on the specific needs of patients and their caregivers in order to achieve an official recognition.  While PCMHs must demonstrate their commitment to continuous improvement in order to achieve recertification, But unlike in an ACO, PCMH providers are primarily accountable to themselves when investing in the development of personalized care in ways that often go above and beyond the basic requirements for recognition.

PCMH providers may certainly participate in additional value-based reimbursement programs or accountable care agreements with their payers, but there is no financial reform component required.

The ACO, meanwhile, is based on securing membership in a consortium of providers who are primarily driven by an agreement that every facility will work together to change how they receive reimbursement.  They are rewarded or penalized based on their performance at regular intervals unless they decide to leave the ACO or the organization disbands, and their actions may have an effect on their fellow providers.

Accountable care organizations demand some level of investment from participating providers, either through bundled payments for episodes of care, penalties for insufficient patient outcomes, or slices of a revenue pie for beating performance targets on established quality measures.

“Cost remains a key driver to health care purchasers,” said Chris Ellertson, regional health plan officer for Health Net to while discussing the formation of an ACO with John Muir Health.  “By further improving the quality and the coordination of patient care – including providing care at the right time and in the most appropriate setting, health care cost trends can be lowered. In turn, this will create value for our customers through improved health outcomes and decreased pressure on health insurance premiums.”

READ MORE: PCMHs, ACOs More Likely to Use EHRs for Population Health

Providers who are simply interested in raising their level of quality care may wish to adopt some or all of the provisions of the patient-centered medical home, while those with financial reform ambitions might want to investigate starting or joining an accountable care organization.

The medical home vs. the medical neighborhood

An accountable care organization is often called a “medical neighborhood,” serving as an expanded version of the patient-centered medical home.  An ACO may include multiple primary care providers, some of whom might have achieved their own PCMH recognitions, as well as local hospitals, specialists, or physician consortiums bound together by an agreement with Medicare or private payers.

The accountable care organization becomes financially responsible for patients attributed to them throughout their journey along the care continuum, with value-based reimbursement being the thread that links the patient to the ACO as a whole.  The PCMH recognition, meanwhile, only judges whether an organization is capable of providing care coordination services to patients while they are receiving primary care at that location.

But that doesn’t mean that primary care providers, whether they have earned PCMH recognition or not, can practice in a sequestered environment for much longer.  “It is important for all health care professionals involved in patient care to have a solid understanding of the role of the patient and family in articulating needs and developing a care plan,” says the American Academy of Family Physicians.

READ MORE: Decoding 10 More Top Healthcare Big Data Analytics Buzzwords

“PCMH integration enables warm handoffs at the moment the patient or family is ready and, thus reduces stigma, improves adherence and augments access to support groups, parenting programs and other medical neighborhood services.”

Planning for data analytics and population health management

The accountable care organization and the patient-centered medical home have one very important thing in common: they both rely on healthcare analytics and population health management in order to function.  EHRs and additional health IT that support health information exchange, risk stratification, care coordination, and patient engagement are vital tools for both the ACO and the PCMH.  The similarities in how this infrastructure is deployed are greater than the differences.

While the PCMH doesn’t require quite as many external connections with other organizations as an ACO might wish to develop, clinical analytics still plays a key role in tracking patients throughout their various contacts with the healthcare system.  The NCQA framework for PCMH recognition, for example, requires providers to be able to develop patient lists and provide proactive reminders based on services that have or have not been delivered to specific individuals.  This may require the implementation of dedicated population health management software or the optimization of an EHR that can provide a similar level of analytics capabilities.

Accountable care organizations won’t just focus on being able to manipulate the patient data within a single provider.  Instead, an ACO will develop health information exchange capabilities between primary care sites, hospitals, and specialists, as well as HIE and reporting to and from the payers seeking proof that the group is meeting quality metrics and other requirements for participation in value-based care arrangements.  The “medical neighborhood” created by an accountable care organization must be able to communicate easily in order to ensure that a patient’s health information follows her from care site to care site as her needs change.  This requires a much heavier investment in health IT infrastructure, the costs of which are often shared amongst participating members of the group.

When patient-centered medical homes and ACOs both work to raise the level of analytics and population health management available to their patients, their efforts can complement each other nicely.  Neither model can be created or sustained in isolation as value-based purchasing demands more from providers in terms of guidance and care coordination for patients as they move across the healthcare system.  The ACO and PCMH may each have their unique features, but both serve important purposes as the industry moves into an era of increased accountability and more highly personalized care.


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