Integrated health networks face common challenges
IHN executives cite common challenges for efficient operations
The University of Michigan Health System in Ann Arbor counts itself as one of the country’s largest research and teaching institutions, but bigger doesn’t always mean better when it comes to integration.
The organization’s scale sometimes makes communication complicated, says Doug Strong, CEO of University of Michigan Hospitals and Health Centers. The UMHS includes the 880-bed hospital in Ann Arbor as well as the university’s medical school.
“We think our job is to really create the future of healthcare in many different ways, and that occurs through the research that we do, it occurs through the education of the next generation of practitioners, physicians, doctors, social workers—even scientists,” Strong says. “It occurs in our daily work, figuring out the best ways to treat our patients.”
UMHS saw 1.9 million patient visits last year throughout the system, and the National Institutes of Health funded $300 million in grants to its medical school for research in 2011, according to the system. Compared with a smaller, consolidated system, UMHS has tougher challenges when it comes to accomplishing its goals of furthering research, educating future clinicians and providing quality patient care, Strong says.
Those ongoing efforts have been validated, as UMHS—FOR the first time—earned a spot on the 2012 IMS Top 100 IHNS, which recognizes the best integrated health networks in the country. UMHS placed No. 54.
Researchers determine the rankings by compiling a system’s overall score measuring 33 attributes in eight differently weighted performance categories. Overall integration is the most heavily weighted. Other categories include integrated technology, financial stability, hospital utilization and contract capabilities. Services and access, outpatient utilization and physician services are also measured.
IMS Health, Danbury, Conn., took ownership of the list last November after acquiring data analytics firm SDI Health, and the rankings were renamed. Researchers used the organizations’ fiscal 2010 data for this year’s scores.
St. John’s Health System, Springfield, Mo., an affiliate of Chesterfield, Mo.-based Mercy health system, sits atop this year’s ranking. Another Mercy system—st. John’s Mercy Health Care in St. Louis— also made the top 10, pulling in at No. 9. The organizations in the top 10 remain the same as last year with one exception: Geisinger Health System, Danville, Pa., rose to No. 2, compared with its No. 12 spot last year. Sentara Healthcare, Norfolk, Va., which ranked No. 1 in both 2010 and 2011, dropped to fourth. That’s despite earning the same score this year as in 2011.
UMHS isn’t the only newcomer in the Top 100. The 2012 list, which represents the 15th anniversary of the rankings, also includes other first-timers: Bassett Healthcare Network in Cooperstown, N.Y.; EMHS in Brewer, Maine; Heritage Valley Health System in Beaver, Pa.; and Conemaugh Health System in Johnstown, Pa.
The individual network scores were the highest that IMS associate product director Pat Witman says she has seen since 2006. Like last year, she again credits improved returns on investments as the reason for a spike in scores in financial stability, and pointed to improved operating margins. Better performance by the recovering equities markets also boosted financial scores of most networks, Witman says.
As larger networks can boast a wider range of resources compared with their smaller peers, networks have to assume the role of Goldilocks when it comes to determining the proper scale, says Alex Hunter, managing director of Navigant’s healthcare practice in Atlanta. Administrators and physicians alike have to work together to figure out what size is just right.
Scale also determines whether a network has the resources to assume more risk. This poses a major challenge as hospitals serve more Medicare and Medicaid patients and as bad debt rises along with tightening reimbursement from federal healthcare programs. All of this is happening as overall patient volume is decreasing, with the struggling economy being blamed for much of the decline, Hunter says. This puts more pressure on administrators to make crucial decisions over the size of the workforce and what services are offered (Jan. 16, p. 6).
This is the second year the University of Michigan system has participated in the IMS Top 100 IHN survey; last year the system failed to make the cut. One way UMHS has streamlined care and improved efficiency is through adopting Lean principles, Strong says. “I think we’re doing what others are trying to do: Our assignment is to improve quality and efficiency.”
Another strategy for streamlining operations is reducing what systems own. Strong says UMHS did just that in 2006 when it sold MCare, a 200,000-member health plan, to Blue Cross and Blue Shield of Michigan.
“If integration means you have to own something, I actually don’t think that’s a strong message that you want to send,” Strong says. “We see ourselves as integrators of a clinical network, but that doesn’t mean we have to own the clinical network.”
Another of the newcomers is five-hospital Bassett Healthcare, which holds the No. 48 spot. The system didn’t qualify for the Top 100 ranking last year but appeared on the 2011 “Best of the Rest” list, which includes systems that scored at least 50 points on the survey’s rating scale.
Information technology continues to play a key role in system integration, and that includes electronic health-record systems. Dr. William Streck, Bassett’s president and CEO, says his organization began rolling out its system seven years ago. As the network has grown, he says the EHR has matured. “We’ve gotten bigger and we’re doing things better,” he says.
Expanding healthcare IT and physician alignment have been two mantras hospital administrators have chanted for years, Hunter says.
“If you’re just now talking about getting into that, you probably have an uphill climb ahead of you,” Hunter says. “If you’re just now aligning with your physicians, it’s not that that ship has already sailed, you are either in a wonderful market—so congratulations—or you’re in a spot in when you’ve not had a strong focus when you probably should have.”
Having an EHR is one thing, but having one that meets all the needs of a network is another. IMS evaluates the strength of an EHR in its rank- ings, and this year, 87% of networks surveyed had EHR systems that met IMS standards.
Implementing an improved EHR system isn’t the only approach Bassett has taken to improve its integration. Previous Top 100 lists allow IHNS the chance to learn from peers, adopting the successes the top networks have used for years, Streck says, noting, for example, that the system has hired a network pharmacy director, a position it didn’t previously have. Case management also has improved, which he says is important as the industry moves toward accountable care and bundled-payment models of reimbursement.
“Those of us who are trying to be an integrated system are doing so in anticipation of changes in the healthcare system,” Streck says.
While the concept of accountable care organizations still appears to be in its infancy, Witman counted 28% of all systems surveyed as either the parent or member of an ACO.
The CMS’ Center for Medicare & Medicaid Innovation selected the University of Michigan as one of the 32 groups participating in the Pio- neer ACO Program, to help prepare healthcare providers for upcoming changes. UMHS is one of seven Pioneer groups that appear on this year’s Top 100 ranking.
Mercy officials in Missouri are used to seeing both St. John’s Health System, which includes a 498-bed hospital in Springfield, Mo., and another affiliate, St. John’s Mercy Health Care with its 979-bed hospital in St. Louis, rank high on the ranking of the Top 100 IHNS. This year is no different, as the Springfield-based group topped the list, while St. John’s in St. Louis ranked No. 9. This year marks the third time since 2007 and the first since 2009 that the Springfield organization ranked No. 1. Last year, St. John’s in Springfield ranked No. 3 and the St. Louis organization ranked No. 6.
Lynn Britton, president and CEO of Mercy, the hospitals’ parent, credits the high integration scores to the system’s emphasis on staff collaboration. “What it really means is our patients, when they come into a Mercy facility, they know they not only get a physician who cares, they get the whole team,” he says.
Both Britton and Jon Swope, president of St. John’s Health System in Springfield, cite their groups’ rapid integration and the quickening pace of changes nationwide. Swope notes the importance of working with physicians and their participation in the CMS Medicare Physician Group Practice Demonstration. The CMS offered incentive payments to physician groups enrolled in the demo, paying them based on how they scored on 32 performance measurements.
Last year, the fifth year of the program, St. John’s in Springfield was among seven organizations that scored benchmark performance in all measurements. The program’s goal is to reduce costs and better coordinate care, and it was the system’s doctors who persuaded executives to participate in the program.
“We were swayed significantly by our physicians,” Swope says. “They just believed that it was time for us to look at a different way in how we approached delivery of healthcare.”
Academic medicine is a core mission at the University of Michigan Health System. The Ann Arbor-based organization made IMS’ ranking of the top integrated healthcare networks for the first time this year.