Which arrangement best aligns with population health management and cost containment?

• A. Pay for performance only
• B. Accountable Care Organizations
• C. Fee-for-service only
• D. One-sided risk

Answer: (B)

Focusing on population health management and cost containment means creating a delivery and payment setup where providers are collectively responsible for the health outcomes and total costs of a defined group of patients. Accountable Care Organizations fit this perfectly because they coordinate care across multiple providers, set shared quality and cost targets for a defined population, and share savings (and sometimes losses) based on performance. This structure incentivizes preventive care, effective care coordination, and reducing unnecessary or duplicative services, all of which drive better outcomes at lower total cost.

Pay for performance only improves quality metrics but doesn’t inherently align incentives with total cost or ensure cross-setting care coordination. Fee-for-service only rewards more services, which can encourage higher costs and fragmented care rather than population-level efficiency. One-sided risk offers some upside if costs come in under budget but lacks full downside exposure, which can weaken the incentive to invest in broad population health management and comprehensive care coordination. In sum, the concerted accountability and shared financial risk of Accountable Care Organizations best align with population health management and cost containment.