Accountable care organization (ACO)

ACO overview

ACO dermatology involves practicing within an Accountable Care Organization, a health care model that prioritizes quality, efficiency, and outcomes over volume. Dermatologists in ACO settings participate in value-based care contracts, where reimbursement is tied to patient outcomes, cost savings, and quality metrics rather than the number of procedures performed. Practices in this model benefit from enhanced data infrastructure, quality improvement initiatives, and opportunities for innovation in preventive and coordinated care.

Why dermatologists choose this

• Aligns with value-based care trends across Medicare and private payers.

• Supports innovation through quality improvement (QI) projects.

• Offers flexibility through potential prepayment and shared-savings models.

• Promotes evidence-based practice through robust data collection.

• Improves patient engagement and outcomes through coordinated care.

• Can enhance practice reputation and recruitment by showcasing measurable results.

How this model works

Practice structure

Dermatologists typically work in group practices, health systems, or integrated networks that have entered into ACO contracts. Practices may be independent but participate in larger ACO entities that coordinate care and share data.

Reimbursement model

Payment is tied to outcomes via Medicare or value-based contracts. Bonuses and penalties are based on performance in areas such as quality, cost, improvement activities, and interoperability.

Patient care model

Focuses on preventive care, chronic disease management, and improved patient outcomes. Encourages a team-based approach, integrating dermatology with primary care and other specialties.

Administrative support

ACOs often invest in EHRs, data analytics, and support teams to track quality metrics and facilitate care coordination. Practices may use tools like DataDerm^™, which simplify data reporting and benchmarking.

Compensation and benefits

Income typically includes a base salary with performance-based incentives tied to quality and cost metrics. Benefits vary by setting but often include health insurance, malpractice coverage, and CME support, especially in larger systems or hospital-affiliated ACOs.

Technology and operations

High emphasis on data-driven care. Practices are incentivized to adopt clinical decision support tools, teledermatology, and EHR integration that improve efficiency and reduce variation in care.

Career growth

Dermatologists in ACOs can take on leadership roles in QI, data governance, or clinical innovation. The model supports continuous improvement and may align with maintenance of certification or academic collaborations.

When this model makes sense

• For those motivated by improving care quality and outcomes.

• Ideal for dermatologists who enjoy data-driven practice and process improvement.

• A good fit for practices already serving Medicare or high-risk populations.

• Well-suited to dermatologists who want to lead or contribute to QI initiatives.

• Best for those open to collaboration and interested in system-level change.

Success factors

• Commit to capturing and analyzing quality data regularly.

• Use clinical registries such as DataDerm to simplify reporting and benchmarking.

• Be proactive in launching QI projects that target key outcomes.

• Engage in cross-specialty collaboration for coordinated patient care.

• Consider prepayment models or shared-savings strategies to reinvest in your practice.

Potential challenges

• Requires ongoing documentation and data submission tied to reimbursement.

• Administrative burden can be high without adequate support systems.

• Financial outcomes can vary depending on performance metrics.

• Less autonomy than private practice for setting individual reimbursement terms.

• Not ideal for those focused solely on cosmetic dermatology or fee-for-service models.

Early career advice

• Understand how your performance affects your reimbursement.

• Inquire about available tools like DataDerm for tracking quality metrics.

• Ask whether the practice participates in shared-savings or prepayment programs.

• Seek mentorship in quality improvement or data analysis.

• Choose this path if you’re interested in systems-based care and want to influence long-term patient outcomes through innovation and collaboration.

Related AAD resources

• Practice types: See our full menu of resources on practice types, from solo to institutional.

• Get started: Access our guide to getting started in practice, with resources on practice types and policies and procedures.

• Employment guide: See all our resources on contracts, questions for employers, and more.

This content was created with the particular needs of early-career dermatologists in mind. See the rest of our Career Launch resources for young physicians.