Norton Healthcare, Humana Launch ACO Pilot

Louisville, KY-based Humana Inc. and Norton Healthcare jointly announced this week that they have launched the region's first commercial Accountable Care Organization.

The Louisville pilot ACO, one of five such sites in the nation, was selected by the Engelberg Center for Health Care Reform at the Brookings Institution, and The Dartmouth Institute for Health Policy and Clinical Practice. 

"Norton Healthcare is proud to be a participant in the Brookings-Dartmouth ACO Pilot Project and we feel this is a tremendous opportunity to participate in an alternative model for health reform," said Steve Hester, MD, Norton Healthcare CMO. "Considering our healthcare system's industry-leading commitment to measuring and openly reporting on the quality of our care; our progress toward a system-wide integrated electronic medical record; and our large base of employed primary- and specialty-care physicians, Norton Healthcare was the logical choice in our region to be an ACO pilot participant."

The other pilot sites include Carilion Clinic, Roanoke, VA; Tucson Medical Center, Tucson, AZ; HealthCare Partners Medical Group, Torrance, CA; and Monarch HealthCare, Irvine, CA. Humana has worked with Brookings-Dartmouth since 2008 on exploring the ACO concept and other innovative payment models.

"Norton Healthcare's work in developing an integrated health care delivery system and Humana's commitment to continuous improvement in quality provide a strong foundation from which to pilot the payment reforms central to ACOs," said Elliott Fisher, MD, director of the Center for Population Health at The Dartmouth Institute for Health Policy and Clinical Practice.

The Brookings-Dartmouth team, led by Fisher and McClellan, is working with Humana and Norton Healthcare to offer technical and strategic support in the implementation of the ACO model. Each ACO site defines the patient population it serves and establishes a spending target that reflects the predicted costs for their patients. The goals of ACOs are to improve efficiency and effectiveness of care and slow spending growth. ACO providers who can demonstrate that they meet these goals will receive in return a portion of the savings achieved.

"The ACO model really gets at bending the cost curve, which is so vital to achieving a sustainable system," Fisher said. "Only health systems that can slow their spending growth, compared to previous years, will have the opportunity to receive shared savings."

Norton-Humana ACO already have identified several initial areas of emphasis, including improvements in preventive screenings and tests, such as mammograms, and vaccinations, better management of chronic illnesses, such as heart failure, more effective treatment of common problems, such as back pain, use of generic drugs, and improved access to the appropriate level of care, rather than emergency department treatment.

The Brookings-Dartmouth team will evaluate the pilots to see how ACOs can impact payment reform, with the hope that a model can be replicated across the nation, building on health reform legislation which will likely make ACOs a voluntary option with Medicare participation in 2012.

Norton Healthcare is the region's largest hospital and healthcare system, with 44% market share, and includes five Louisville hospitals; 12 Norton Immediate Care Centers; 10,900 employees; more than 400 employed medical providers; and nearly 2,300 total physicians on its medical staff.

See Also:
The Physician's Place in the ACO
ACO Management Depends on IT

Healthcare Leaders Prep for the ACO Model
Real help in setting up an ACO