Background and Challenge

Accountable Care Organizations (ACOs) are one manifestation of a broad-based, ongoing trend to better align incentives for healthcare providers (hospitals, medical groups, integrated delivery networks or IDNs) and enable them to share in the benefits from reduced costs and improved care quality, coordination and outcomes.

During the early period of ACO formation, the business services division of a large healthcare services company was developing a comprehensive suite of services for ACOs. Given the nascent stages of ACO formation the company requested assistance to better understand the future of the ACO market to optimize their go-to-market strategy. Specifically, they sought to understand the number of ACOs likely to form within the next five years, the anticipated needs of ACOs through the various stages of organizational evolution, the expected spending by ACOs on outsourced services during formation and operation, and the specific strategic positioning and service offering of key competitors.

Approach and Recommendations

L.E.K. completed substantial primary and secondary research and analysis to develop a robust view of the current and future ACO landscape, the resulting demand for the organization’s services, and implications for optimizing the go-to-market strategy. Work streams included:

  • Evaluation of the market factors influencing ACO formation and implications on the evolution of the ACO market
  • Segmentation and forecast of expected ACO formation across the U.S.
  • Documentation of the ACO development timeline and processes
  • Identification of products and services that ACOs would need at each stage of development and recommendations regarding how to tailor the offerings and marketing for each ACO segment
  • Estimation of pricing for the product and service offerings
  • Assessment of key competitors’ strategies and offerings and their anticipated response to the MCO’s actions


We provided a robust and comprehensive view of the ACO market and its expected evolution to justify substantial, near-term investment in the new ACO services offering.  In addition, as a result of our recommendations, the organization made several important strategic and tactical changes to optimize its strategic positioning and better align its offering with the needs of potential customers.  The organization subsequently became a leader in the ACO business services space, and continues to serve and collaborate with numerous ACOs around the country.

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