An Institutional Perspective on Accountable Care Organizations

We employ aspects of institutional theory to explore how Accountable Care Organizations (ACOs) can effectively manage the multiplicity of ideas and pressures within which they are embedded and consequently better serve patients and their communities. More specifically, we draw on the concept of institutional logics to highlight the importance of understanding the conflicting principles upon which ACOs were founded. Based on previous research conducted both inside and outside health care settings, we argue that ACOs can combine attention to these principles (or institutional logics) in different ways; the options fall on a continuum from (a) segregating the effects of multiple logics from each other by compartmentalizing responses to multiple logics to (b) fully hybridizing the different logics. We suggest that the most productive path for ACOs is to situate their approach between the two extremes of “segregating” and “fully hybridizing.” This strategic approach allows ACOs to develop effective responses that combine logics without fully integrating them. We identify three ways that ACOs can embrace institutional complexity short of fully hybridizing disparate logics: (1) reinterpreting practices to make them compatible with other logics; (2) engaging in strategies that take advantage of existing synergy between conflicting logics; (3) creating opportunities for people at frontline to develop innovative ways of working that combine multiple logics.