Colleen Kraft, M.D., FAAP, a pediatrician at Carilion Clinic in Roanoke, Va., is seeing the impact of accountable care organizations (ACOs) firsthand.

Carilion Clinic is one of three sites participating in an ACO pilot project sponsored by the Dartmouth Institute and the Brookings Institution’s Engelberg Center for Health Care Reform.

ACOs, a heralded model for improving health care delivery, are encouraged under the federal Affordable Care Act and are driven largely by Medicare reform. The Centers for Medicare & Medicaid Services (CMS) defines them as organizations of health care providers that agree to be accountable for the quality, cost and overall care of beneficiaries. In return, ACOs receive incentive payments based on quality and efficiency in managing costs.

For Dr. Kraft, that means she is paid a base salary and has opportunities to earn bonuses for meeting care benchmarks and performance measurements, and for productivity. Investments made by an ACO...

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