By design, an accountable care organization (ACO) requires a symbiotic and profitable collaboration between a health plan and health provider network. An ACO is expected to perform, on the one hand, like a health management organization, and on the other hand, a coordinated care provider that is committed to measurably raising the health care quality and does so with the fiscal responsibility and accountability of a health plan to lower healthcare costs.

ACOs therefore require the unique and complementary strengths of health plans and provider organizations to implement qualitative shifts in the way healthcare services are produced, distributed, delivered, and paid.

This paper explores how HMOs and provider networks can work together and recommends ways to manage the quality transformation journey and healthcare cost management practices.