Norton's ACO was created within the organization's existing hospital-led and risk-averse system. An executive steering committee is overseeing the ACO implementation process and a governance board will manage its strategic direction and activities. In order to establish the ACO as a legal entity, the steering committee amended three existing Norton and Humana contractual agreements. These amendments stipulate the use of the Brookings-Dartmouth patient attribution methodology, a 2 percent risk corridor, and a 60/40 shared savings split for the first year. The amendments also link shared savings to performance on quality measures, starting in the second year. Norton is working to develop a patient notification strategy and is addressing provider concerns through open forums.
Norton aligns financial incentives with performance. Hospitals and physician practices are evaluated relative to performance targets that Norton sets at the beginning of each calendar year. Employed primary care physicians’ compensation is linked to performance (monitored at the group practice level) on established quality metrics. Currently, about 10 percent of their salary is linked to performance; this will steadily increase to 20 percent. Quality metrics are usually derived from the Physician Quality Reporting System indicators, which relate to prevention/screening, safety, productivity, and readmission rates. The data and analytics team conducts a monthly evaluation of physicians’ performance on these measures and addresses outliers if necessary. The team also analyzes hospitals’ performance on a different set of quality measures.
