In its most simplified form, the idea behind accountable care organizations was to get the healthcare providers and payers in a community to work together to improve care while also reducing its cost. Much of that purity has been lost in the noise of the ACO movement, but in Louisville, KY, Norton Healthcare and Humana are continuing the journey.
Norton, with five hospitals and more than 2,000 physicians, and health plan Humana, headquartered in Louisville but with 10 million members nationwide, began discussions of forming an ACO in 2009, “when we had no idea what an ACO really was,” says Steven Hester, MD, Norton’s chief medical officer.
Norton and Humana have formed the area’s first commercial ACO and together form one of five sites nationwide participating in the Brookings-Dartmouth ACO pilot study. But what started their discussions of working together was a shared philosophy, Hester says.
“I don’t see it really as just an ACO structure,” Hester says, “but how do we provide value. How do we change? How do we look around and see who the partners are who can help us move the agenda forward.”
The pilot study focuses primarily on the 10,000 Norton and Humana employees in the market, with other commercial plans to be added. So far the team has worked through the governance issues such as physician participation and financial modeling, as well as the performance reporting and reconciliation of shared savings.
The pilot has begun to track improvement along several initiatives, including a joint replacement accountability study that has seen a 7.3% reduction in direct variable cost, a 6.7% reduction in length of stay, and a 13% reduction in 30-day readmissions.
Norton and Humana have been working on the relationship for years, but both say that hospitals and health systems need not feel like they are years behind the ACO curve and can begin discussions anytime.
“In moving any market, you start working with the early movers and then the others come along,” says Tom James, MD, Humana corporate medical director. Hester adds that the first Norton/Humana ACO discussions and development were longer because “we spent a lot of time creating the ACO model” that others can now replicate. It helps that Norton and Humana had prior experience managing risk in an HMO, but any market with similar risk-sharing experience would have a head start on an ACO, they add.
The next level of communication will be to the consumers, Hester says.
“We have to help people get to a place where they feel they are getting value,” he says. “They don’t understand what these outcomes really mean.”
Hester, James, and Ken Wilson, MD, Norton’s vice president for clinical effectiveness and quality, will share their experience to date and future plans for ACO execution at HealthLeaders Media Rounds “The Real Value of ACOs,” simulcast from noon–3 p.m. ET on Tuesday, Aug. 16. Register today.
Jim Molpus is the director of the HealthLeaders Exchange.