Current pressures in a rapidly changing U.S. healthcare sector, call for a new level of governance professionalism and transparency. No matter how much of the accountable care organization (ACO) movement remains within the federal law, provider- and insurance-driven ACOs will need to be more formal and disciplined in their governance structures, strategies, and style. There is general consensus in the industry that, regardless of the type of ACO in which a hospital or health system participates, two strategic observations are essential for success: 1) ACO success will be dependent on the involvement of physicians in governance and leadership, and 2) in order to lead or participate in an ACO, hospitals and health systems will need new competencies and significant resources.

In this article, James A. Rice, Ph.D., FACHE, and Douglas A. Hastings describe a third success factor: smarter governance. They also provide five key governance imperatives leaders need to carefully consider in this complex and challenging era.