Value-based care (VBC) is increasingly seen as the future in healthcare. VBC shifts the focus in healthcare from paying for volume to paying for quality, linking payment to health outcomes and other indicators of quality and efficiency, rather than to the number of services provided. It targets and measures quality, costs and outcomes across all levels of a healthcare system.

A particularly promising option for moving towards VBC is the Accountable Care Organization (ACO), an arrangement that integrates all aspects of healthcare delivery and finance, and drives improvement through incentives as well as the initiatives and leadership of clinicians. The ACO model is highly adaptable to local circumstances and can accommodate public and private providers and financing, making it appropriate for countries with mixed healthcare markets, and for those in which payment and provision are divided between public and private sectors.

This Policy Working Paper explains ACOs, their characteristics, benefits and factors driving ACO success in the US; it then outlines the relevance for emerging markets and developing economies, where the ACO model holds considerable promise.