This week, I had the honor of delivering the opening plenary at the NAACOS 2024 fall conference in Washington, D.C., where over 1,000 leaders from across the country gathered to discuss the future of accountable care organizations (ACOs) and value-based care.
As always, the event served as an exceptional educational forum, bringing together clinical leaders, administrators and policymakers dedicated to enhancing the quality of medical care for millions of Americans and making healthcare more affordable for our nation. I want to express my gratitude to Clif Gaus, the founder and retiring CEO of NAACOS, for his vision and leadership in organizing such a pivotal gathering. I also extend my congratulations to Jeff Micklos on his new role as CEO.
ACOs: the best hope for transforming American healthcare
In my opening remarks, I underscored a key point: ACOs represent the best hope for the future of American healthcare. In a system too often constrained by fee-for-service incentives, ACOs offer a path forward—one that emphasizes patient outcomes and quality over the sheer volume of services. Yet, despite their promise, progress toward widespread adoption of value-based care has been slower than we had hoped. The pressing question is, why?
Part of the answer lies in the inherent challenges of building effective ACOs. Bringing together diverse groups of clinicians, aligning their goals and ensuring they can jointly assume financial risk is no small feat. Success requires leadership capable of uniting doctors, hospitals and other healthcare providers around a shared mission.
But it also requires something more: A powerful tool that can improve health outcomes, prevent costly and life-threatening complications and turn the promise of value-based care into a practical, scalable reality.
A breakthrough tool: generative AI
I believe that tool has finally arrived. In late 2022, the release of ChatGPT by OpenAI marked a turning point in medicine. This technology is far more than a passing trend or another iteration of narrow AI. Generative AI represents a breakthrough with the potential to reshape how we manage health and deliver care. When applied effectively, it has the power to save hundreds of thousands of lives each year, make healthcare more affordable and reduce burnout among clinicians.
Unlike its rule-based predecessors, generative AI can analyze vast amounts of data, detect trends and empower patients to take control of their chronic diseases. The applications are extensive, from predicting disease progression to creating personalized care plans that adjust in real time.
During the plenary, I highlighted generative AI’s ability to transform the management of chronic conditions like diabetes, heart failure and hypertension—diseases that result in many of the heart attacks, strokes, kidney failures and cancers that burden our healthcare system. According to CDC data, effective management of these conditions could reduce these life-threatening complications by 30-50%.
However, effective chronic disease management demands more than episodic, office-based care. It requires continuous monitoring and proactive intervention. I am confident that ACOs, when leveraging advanced AI tools, can make this vision a reality.
Imagine a future where AI applications, seamlessly integrated with wearable devices and home health monitors, keep patients informed about their progress and enable doctors to adjust medications regularly and more rapidly than today without the need for in-person visits. Rather than today’s reality—where only 55% of hypertension patients and 30% of diabetes patients are under control—the combination of dedicated clinicians, empowered patients and generative AI could achieve optimal control 80-90% of the time. The outcome? Hundreds of thousands of lives saved annually and significant reductions in medical costs.
The challenge: moving from FFS to capitation
Technology alone will not be enough. To fully realize the benefits of AI, we must modify incentives and shift from the fee-for-service (FFS) model that has long dominated American healthcare to a capitation-based approach.
This is where ACOs are uniquely positioned to lead. A value-based mindset is deeply ingrained in the culture of ACOs and central to NAACOS’s mission. But until now, medical groups and health systems haven’t had the tools needed to achieve the level of performance required. Generative AI alters that calculus.
During my remarks, I called on ACO leaders and the nation’s largest insurers to work together to accelerate this transition. Their collaboration is essential to sharing risk and achieving the superior clinical outcomes needed. With NAACOS and its member ACOs paving the way, I’m optimistic that other clinician groups across the country will follow the path these pioneers are forging.
A path forward for ACOs and American medicine
The NAACOS fall conference served as a powerful reminder that we must embrace change, adopt new technologies and collaborate across healthcare sectors to drive real progress.
Generative AI, combined with the ACO model, offers a great opportunity to deliver the personalized, preventive care that has long eluded our healthcare system. But achieving this vision requires leadership, collaboration and the courage to take risks. The future of healthcare depends on our willingness to seize this moment. ACOs are well-positioned to lead the way.
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Dr. Robert Pearl is the former CEO of The Permanente Medical Group, the nation’s largest physician group. He’s a Forbes contributor, bestselling author, Stanford University professor, and host of two healthcare podcasts. Check out Pearl’s newest book, ChatGPT, MD: How AI-Empowered Patients & Doctors Can Take Back Control of American Medicine with all profits going to Doctors Without Borders.
