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FTI Journal | Critical Thinking at the Critical Time

All Hands On Deck

Accountable care organizations are the talk of the industry in the United States, but precious few actually exist — and that means few guideposts for getting an ACO up and running. That hasn’t stopped this health system.


Much of the hope of U.S. healthcare reform is pinned to the accountable care organization, or ACO . In theory, at least, an ACO links hospitals and physicians contractually to share risks, rewards and incentives as they standardize and coordinate care, reduce waste and improve quality and efficiency. In November 2010, Norton Healthcare — an integrated, not-for-profit health system in Kentucky with five Louisville hospitals and more than 100 treatment locations — began transforming itself into the state’s first commercial ACO . Steven T. Hester, M.D., Norton Healthcare’s senior vice president and chief medical officer, talks about the process.

Why Did Your Organization Decide To Become An ACO?

We saw it as a way to prepare for healthcare reform and to help develop the framework for what’s to come. There weren’t many regulations spelling out how an ACO should operate, so we worked with Humana and the Brookings- Dartmouth ACO Pilot Project — they’re both developing ACO models — to establish a process with twin goals of creating an infrastructure to exchange data effectively and of using that infrastructure to improve patient care.

Everyone Seems To Be Talking About ACOs, But What’s Your Definition?

For us, accountable care is about creating value for patients and a safe environment, and doing so as costeffectively as possible.

More than
quality indicators about Norton Healthcare hospitals and physicians are available on its public Website.

You have to see where costs are and what’s efficient and what’s not. Then you make improvements. If readmission to the hospital is a big expense, how do we get patients the care they need to keep them from having to come back? How do we work with clinicians to evaluate their level of patient referrals and hospitalization? How do we get patients engaged in building their accountability — for following doctors’ orders and making follow-up appointments?

Central To All Of This Is Data About Care And Costs. How Are You Acquiring And Using Data?

We are building a platform that will enable us to view broad sets of patient data from multiple sites and providers and give clinicians the data support they need. For example, we know there’s variation in the tools and processes clinicians use. With data on clinical outcomes, we can work toward standardizing usage to provide the strongest possible care in a costeffective way.

FTI Consulting helped improve our processes even before we started working on becoming an ACO . They helped us benchmark our organization against other top institutions so we could understand the opportunities for improvement. They also helped us look at our supply chain to evaluate clinical effectiveness and identify opportunities for standardization that would reduce costs.

What Has Been The Biggest Challenge In Changing Your Organization’s Culture?

It’s essential for clinicians to understand that change is important. That requires communication about goals — that this effort is about improving patient experience and outcomes and building more value into the process.

It’s essential for clinicians to understand that this effort is about improving patient experience and outcomes and building more value into the process.

The biggest difficulty has been communicating what an ACO is. The federal regulations for ACO s just came out on March 31; before that, there were no real guidelines, and there are still lots of unknowns, and no single blueprint for creating an ACO . That makes it challenging to get people aligned around our changes. The best way to overcome that is to keep communicating our message and to recruit the physicians who get it to work as change agents with their peers.

Reducing Length Of Hospital Stays Is One Crucial Way To Limit Costs. How Are You Attacking That Issue?

By demonstrating to our physicians the importance of working with nonphysician care managers who are charged with moving patients effectively through the system. Everyone tends to think they have maximized their efficiency; it’s not until you’re able toshare performance data that you can demonstrate where physicians stand compared with their peers and how operational improvements can help.

One Goal Of Becoming More Efficient Is To Attract New Business. How Will You Market Your Organization’s Accomplishments?

It’s not so much marketing as it is demonstrating value in how we deliver patient care. Our public Website includes data on more than 600 quality indicators about Norton Healthcare hospitals and physicians, and it shows where we rank against state and national averages. We also measure patient satisfaction with tools that benchmark our performance against hospitals nationwide.

What Advice Would You Give Other Organizations Planning To Create ACOs?

It’s crucial to have the data infrastructure to help you succeed — and people in the organization who understand the need for change and can help make it happen.

Published September 2011

© Copyright 2011. The views expressed herein are those of the author and do not necessarily represent the views of FTI Consulting, Inc. or its other professionals.

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The views expressed in this article(s) are those of the author and not necessarily those of FTI Consulting, Inc., or its professionals.
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