In­te­grated health net­works face com­mon chal­lenges

IHN ex­ec­u­tives cite com­mon chal­lenges for ef­fi­cient op­er­a­tions

Modern Healthcare - - MODERN HEALTHCARE -

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.

Fa­mil­iar names

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.

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