Shift­ing the mind­set from be­ing a hos­pi­tal sys­tem to a health sys­tem

Modern Healthcare - - NEWS -

The seis­mic shift to out­pa­tient care is af­fect­ing nearly ev­ery facet of the de­liv­ery sys­tem. Hos­pi­tals are re­think­ing their def­i­ni­tion of mar­ket share, grow­ing their clinic models and in­vest­ing in tele­health. The drive to re­struc­ture the way care is de­liv­ered is so dra­matic that or­ga­ni­za­tions like Mercy now think of them­selves as a large clinic that op­er­ates hos­pi­tals, said Michael McCurry, chief op­er­at­ing of­fi­cer of the Mis­souri-based sys­tem.

In­creas­ingly, COOs are lead­ing this change in their or­ga­ni­za­tions, en­sur­ing that care co­or­di­na­tion, re­im­burse­ment and technology sys­tems are aligned. Mod­ern Health­care hos­pi­tal op­er­a­tions re­porter Alex Kacik re­cently con­ducted a round­table con­ver­sa­tion with McCurry; Tracy Rogers, COO of As­cen­sion Wis­con­sin; and Michael Hule­feld, COO of Ochsner Health Sys­tem in Louisiana, to gain a deeper un­der­stand­ing of how the push to out­pa­tient care af­fects op­er­a­tions and over­all strat­egy. The fol­low­ing is an edited tran­script.

Mod­ern Health­care: How is out­pa­tient care evolv­ing, es­pe­cially as we see a grow­ing num­ber of pro­ce­dures move to that set­ting?

Tracy Rogers: We ob­vi­ously see out­pa­tient care grow­ing ex­po­nen­tially, and, more im­por­tantly, we see it evolv­ing through more diver­si­fied of­fer­ings, so in ad­di­tion to our physi­cian clin­ics and re­tail clin­ics, we see more imag­ing cen­ters, mi­cro hos­pi­tals, surgery and pro­ce­dure cen­ters, off-hour clin­ics. So, again, emerg­ing in many dif­fer­ent forms and shapes.

Michael Hule­feld: The vast ma­jor­ity of our cap­i­tal in­vest­ment right now is go­ing into out­pa­tient ar­eas, whether it’s can­cer cen­ters or imag­ing cen­ter ex­pan­sion. We view tele­health as in this bucket as well. It’s some­thing that’s re­ally go­ing to take off over the course of the next cou­ple years, so we’re very fo­cused there as well.

Michael McCurry: Our doc­tors fun­da­men­tally be­lieve that by tak­ing care of peo­ple in their homes, keep­ing them well, you get bet­ter health and lower cost. So, it’s re­ally cen­tral to the model of care that we are pur­su­ing.

MH: Tracy, you brought up new entry points that we’ve seen pro­lif­er­ate. What im­pact does the growth in re­tail clin­ics, ur­gent-care cen­ters and vir­tual ac­cess have on over­all out­pa­tient-care strat­egy?

Rogers: As Mike noted, it is hav­ing an im­pact on our abil­ity to de­liver value at a lower cost, and we see it’s re­ally en­gag­ing our pa­tients in their care de­liv­ery as well.

The core of con­sumerism is this de­sire by our pa­tients to “do noth­ing to me with­out me.” For us, it’s help­ing them con­nect the dots in a very com­plex health­care en­vi­ron­ment. Tracy Rogers

Hule­feld: The other large com­po­nent and strat­egy of ours is around care co­or­di­na­tion. All the mem­bers of our group prac­tice are on Epic, so ev­ery test, ev­ery out­pa­tient pro­ce­dure, ev­ery re­sult is at the fin­ger­tips of ev­ery­one who prac­tices with us.

The way that you get lower cost is through re­duc­tion, du­pli­ca­tion and utiliza­tion. That’s cer­tainly a big key for us be­cause out­pa­tient care can be very dis­parate if we’re not care­ful about it.

McCurry: Con­sumerism is our strat­egy. Ev­ery five to six years, we set a new strat­egy. Right now it’s called the Vi­sion 2020. It is a way we can bring to bear all of our ca­pa­bil­i­ties in vir­tual care, in care man­age­ment, which we be­lieve we are very good at, and sur­round the pa­tient with op­tions that give them quick ac­cess to the clos­est lo­ca­tion that can take care of them.

We’re in­volv­ing con­sumers in the way we build lo­ca­tions and the way we build ser­vices. We’re try­ing very hard to re­spond to what they tell us are their key needs, and also in­no­vat­ing in ways that we think peo­ple might not bring up but will sat­isfy them in the long run.

MH: When you look at con­sumerism tak­ing a larger role in health­care and how the out­pa­tient model is af­fected by that trend, what in­flu­ence has con­sumerism and the push to­ward val­ue­based care had on the de­liv­ery of health­care?

McCurry: It’s com­pletely changed it. Con­sumerism is about meet­ing pa­tients where they are. It is pro­vid­ing ser­vices that they want in the time frame they want at a price point that they can af­ford. The big prob­lem in health­care is that folks can’t af­ford the high-de­ductible plans. We’re a large re­li­gious min­istry not-for-profit health sys­tem, and our char­ity care al­most dou­bled be­tween 2015 and 2017.

It was driven by peo­ple who have in­sur­ance, which tra­di­tion­ally has been the sweet spot for health sys­tems. It was the high de­ductible that they sim­ply couldn’t pay and they would ap­ply to us for help. To com­bat that, we’re try­ing to build ser­vices in those con­ve­nient lo­ca­tions that have a price point that is af­ford­able.

We’re try­ing to build that into our con­sumer strat­egy, along with a care model that gets them the care that they need and not more, seeks to proac­tively care for them, not re­ac­tively. We think that it’s a win­ning strat­egy in the mar­kets we serve.

Hule­feld: We’re tak­ing a very sim­i­lar ap­proach. We’ve got to go to where the pa­tients are, meet them when they want to be met, and again, make it af­ford­able.

Rogers: The core of con­sumerism is this de­sire by our pa­tients to “do noth­ing to me with­out me.” For us, it’s help­ing them con­nect the dots in a very com­plex health­care en­vi­ron­ment.

As we see this shift to out­pa­tient, there are more dots to con­nect. That al­lows us to play a very vi­tal role in en­gag­ing the pa­tients, giv­ing them in­for­ma­tion so that they can make in­formed de­ci­sions about their health­care.

MH: As we’ve seen this shift that re­quires greater co­or­di­na­tion, things get a lit­tle more com­pli­cated. How do you en­sure that care is stan­dard­ized and there isn’t as much vari­a­tion, that com­mu­ni­ca­tion is co­or­di­nated across var­i­ous plat­forms?

Rogers: It’s in­cred­i­bly im­por­tant that we op­ti­mize the care that we pro­vide. We use very fo­cused dash­boards and met­rics pro­cesses that we carry forth across the con­tin­uum of care. We are lit­er­ally un­yield­ing in stay­ing at that in­ter­sec­tion be­tween ef­fi­ciency and ef­fec­tive­ness.

While be­ing good ste­wards of our re­sources is es­sen­tial, we never drive cost con­tain­ment at the risk of de­tract­ing from the qual­ity that we pro­vide, and I think if you keep that at the fore­front, then we en­sure that we are, again, hard-wiring that ef­fi­ciency and ef­fec­tive­ness of the care but keep­ing the out­comes.

Hule­feld: A cou­ple months ago, we ac­quired the largest ur­gent-care provider in the re­gion with 14 dif­fer­ent sites. We had two non-ne­go­tiables as we went through that

One of the most im­por­tant sta­tis­tics we look at ev­ery month is the num­ber of unique pa­tients within our clin­ics. We look at visit vol­umes and rev­enue, but the real driver is are we cap­tur­ing more lives into our physi­cian group? Michael Hule­feld

process. The physi­cians will join our clinic and there­fore meet our cre­den­tial­ing re­quire­ments and en­sure that we have con­sis­tency and ap­pro­pri­ate lev­els of qual­ity. And se­condly, that they would move off their ex­ist­ing IT plat­form and go to Epic, which is our sys­temwide plat­form, so that, again, we can pro­vide the care co­or­di­na­tion, re­duce the du­pli­ca­tion or un­nec­es­sary vari­a­tion.

As we ap­proach out­pa­tient growth and, as you men­tioned, be­come more re­gion­wide and more ge­o­graph­i­cally dis­persed, we’ve re­ally had to de­fine the philoso­phies un­der which we’re go­ing to do this, or else it could be­come again a very dis­jointed sort of ap­proach or sys­tem. We worked pretty hard to de­fine how we’re go­ing to grow. We’ve got to make sure that we are work­ing with like-minded physi­cians and or­ga­ni­za­tions in that growth.

McCurry: Our core op­er­at­ing phi­los­o­phy is driven around pro­vid­ing the value propo­si­tion to the com­mu­ni­ties we serve of high qual­ity, high ser­vice, low cost, and we re­ally mean that. We’ve made some huge in­vest­ments to help sup­port that. One of them is in CarePATH. Inside the hos­pi­tal, we take the sick­est among us, which is where qual­ity im­prove­ments are, and we au­to­mated those CarePATHs so that when a per­son comes in and gets a di­ag­no­sis we can tell you ev­ery­thing that’s go­ing to hap­pen and when it’s go­ing to hap­pen over the next cou­ple of days.

The sec­ond big in­vest­ment is an­a­lyt­ics. In health­care, the prob­lem is that we’ve al­ways tried to deal with ev­ery­thing, ev­ery­thing is im­por­tant, but to make im­prove­ments you re­ally have to ad­dress the ex­cep­tions. An­a­lyt­ics has helped pin­point the chal­lenges and the op­por­tu­ni­ties and we’ve been able to fo­cus.

The third big in­vest­ment is in vir­tual care, and I’m re­ally ex­cited about some of the work that’s go­ing on there. Our En­gage­ment@Home pro­gram uses tele­health to bring care to the sick­est of the sick, folks with many co-mor­bidi­ties.

One ex­am­ple, our test case, a pa­tient over nine months had 13 hos­pi­tal­iza­tions at a cost of over $500,000, and her qual­ity of life was aw­ful. She felt like she had no life. Her goals were sim­ple. She wanted to play bingo on Tues­day nights and be able to be with her fam­ily on the week­ends. We gave her all of the vir­tual care stuff that we use, and the rest of her life she had no hos­pi­tal in­pa­tient episodes, only had one ER visit, and re­ported a much im­proved qual­ity of life at an ob­vi­ously sig­nif­i­cantly re­duced cost.

It’s those in­vest­ments that are driv­ing our abil­ity to pro­vide higher-qual­ity care at a lower price point, and the pa­tients still love it, so we get high qual­ity ser­vice scores.

MH: You all bring up points in terms of grow­ing mar­ket share and in­vest­ing in var­i­ous pro­grams that are help­ing you stay up-to­date and evolve. How do you view out­pa­tient care in terms of grow­ing mar­ket share?

Rogers: Mar­ket share has the con­no­ta­tion of be­ing more about in­pa­tient. As we think through out­pa­tient care, it re­frames the con­ver­sa­tion to think more about how we care for pa­tient pop­u­la­tions and how we serve our com­mu­ni­ties in to­tal­ity. I love Michael’s ex­am­ple about vir­tual care. In Wis­con­sin, we have very di­verse pop­u­la­tions from met­ro­pol­i­tan mar­kets to very ru­ral health­care com­mu­ni­ties. In our ru­ral com­mu­ni­ties, we are also us­ing vir­tual care to re­ally reach ar­eas that are very hard to re­cruit; there’s a dearth of spe­cial­ists avail­able.

In our crit­i­cal-ac­cess hos­pi­tals and in our ru­ral health clin­ics, we uti­lize vir­tual care to lever­age spe­cial­ists in our more met­ro­pol­i­tan com­mu­ni­ties to pro­vide con­sul­ta­tive sup­port into our pri­mary-care clin­ics, al­low­ing care to re­main lo­cal but still pro­vid­ing that very high level of ac­cess to spe­cialty medicine that they would not be af­forded else­where.

We’re still man­ag­ing and car­ing for those pa­tient pop­u­la­tions, but it re­ally kind of re­de­fines how we would tra­di­tion­ally think about share.

Hule­feld: One of the most im­por­tant sta­tis­tics we look at ev­ery month is the num­ber of unique pa­tients within our clin­ics. We look at visit vol­umes and rev­enue, but the real driver is are we cap­tur­ing more lives into our physi­cian group? To me, when I think about mar­ket share in the out­pa­tient set­ting, that is the pre­dic­tor of fu­ture suc­cess and the most im­por­tant step that we can re­ally fo­cus upon.

The other thing we’ve thought about look­ing at is how do we have a pri­mary-care physi­cian prac­tice within a five- to 10-minute drive of 80% of the pop­u­la­tion? How do we go to where the pa­tients are?

Cer­tainly, we’re in­vest­ing in tele­health as well, but there’s al­ways go­ing to be those sit­u­a­tions we feel where peo­ple are go­ing to want that ac­cess nearby to a pri­mary-care physi­cian.

As we think about mar­ket share, it’s also the ge­o­graphic cov­er­age and en­sur­ing that we’re where pa­tients need and ex­pect us to be.

McCurry: In our largest mar­ket in St. Louis, we’ve seen our in­pa­tient share in­crease by a few per­cent­age points over the past seven years, but our out­pa­tient share has quadru­pled. To­day, we have al­most twice as much out­pa­tient share as any other health sys­tem in St. Louis, but only small, in­cre­men­tal im­prove­ments in in­pa­tient share. That tells us it’s not trick­ling down like it used to.

When you’re re­ally fo­cused on utiliza­tion, try­ing to keep peo­ple well, that’s a rea­son­able ex­pec­ta­tion. We think it shows a tremen­dous im­prove­ment in the cost of care. We’re car­ing for four times as many peo­ple, but it’s not re­ally in­creas­ing our hos­pi­tal in­pa­tient utiliza­tion. It’s fairly new in­for­ma­tion, but the only ra­tio­nal con­clu­sion that we’ve come to is that we’re do­ing a bet­ter job with hos­pi­tal utiliza­tion. When we look at the pop­u­la­tion of peo­ple cared for and hos­pi­tal utiliza­tion in that pop­u­la­tion, we’ve seen a sig­nif­i­cant de­cline in utiliza­tion of hos­pi­tals on a pro rata ba­sis.

MH: Are there some spe­cific ob­sta­cles that you’ve over­come in set­ting up these out­pa­tient net­works?

Rogers: One of the big­gest is­sues that we have is shift­ing from just think­ing of our sys­tems as hos­pi­tal sys­tems ver­sus health­care sys­tems.

We work very dili­gently on our net­work of 26 hos­pi­tals and think­ing of our­selves as not a hub-and-spoke model, but a spoke-and-hub model. I use that se­quence very de­lib­er­ately be­cause our goal is to keep health­care as lo­cal as pos­si­ble and only shift­ing pa­tients to higher, more acute lev­els of care when it is nec­es­sary so that we make those com­mit­ments to the com­mu­nity and, again, build on that con­tin­uum of care as an in­te­grated sys­tem of care.

Hule­feld: We’ve set up our lead­er­ship struc­ture around ser­vice lines so that as we cre­ate out­pa­tient imag­ing cen­ters across the re­gion and our phys­i­cal ther­apy sites across the re­gion, we look at how we go­ing to op­er­ate these in a con­sis­tent fash­ion as we be­come more ge­o­graph­i­cally dis­persed and as we de­velop new part­ner­ships. That cer­tainly has been the struc­ture that we’ve leaned on to try to cre­ate the con­sis­tency as well as the ef­fi­ciency that we need to get. And as you grow, the world does be­come more com­plex. That’s why mak­ing sure we’re work­ing with like-minded part­ners and providers is so im­por­tant to us, so that peo­ple have the same goals.

McCurry: So, a lot of in­ter­est­ing sim­i­lar­i­ties. Tracy men­tioned see­ing them­selves as a health sys­tem. Mercy has crossed the bar­rier of no longer see­ing our­selves as a hos­pi­tal sys­tem, but see­ing our­selves as a clinic that op­er­ates hos­pi­tals, and it changes the world when you change that per­spec­tive. To­day, we see our­selves as a very large clinic. Ac­cord­ingly, our fo­cus in deal­ing with a shift to the out­pa­tient world has been physi­cian lead­er­ship.

Our care model is driven by the physi­cians, and we’ve tasked our­selves with be­ing able to de­liver care ef­fi­ciently and not bank­rupt the com­pany in a care model that seeks to pro­vide care at home that of­ten times, most times, doesn’t have a billing code as­so­ci­ated with it.

To do that, we’ve changed our physi­cian pay plan sig­nif­i­cantly and pro­vided in­cen­tives to doc­tors that are based on the en­tire health sys­tem meet­ing its goals and tak­ing on trans­for­ma­tional activities. We have one con­tract for all physi­cians.

MH: What does the fu­ture hold for out­pa­tient care?

Rogers: What we’ve seen to date is just the tip of the ice­berg. Out­pa­tient care is go­ing to con­tinue to in­no­vate. This is go­ing to be a core com­pe­tency for health­care lead­ers. Over­all, it’s go­ing to see new en­trants in this space and po­ten­tially some very in­ter­est­ing part­ner­ships from some non­tra­di­tional part­ners. I also think that the in­no­va­tion that we will see is re­ally go­ing to be driven in large part by con­sumers with the growth of even more ac­tive con­sumerism than we’ve ever seen be­fore.

Hule­feld: Tele­health will play a big­ger role. What we think of as an out­pa­tient cen­ter to­day might look dras­ti­cally dif­fer­ent. It might be peo­ple’s res­i­dence 10 years from now. And then, I also think that, go­ing back to some of Mike’s com­ments, the growth in out­pa­tient is re­ally dwarf­ing the growth in in­pa­tient. I think you’re go­ing to see some tra­di­tional in­pa­tient hos­pi­tals evolve into out­pa­tient cen­ters, free-stand­ing emer­gency de­part­ments, ur­gent-care physi­cian prac­tices and tra­di­tional out­pa­tient ser­vices, but the need for an in­pa­tient bed is just not go­ing to be there go­ing for­ward.

McCurry: I think it will be like it was in the 1960s in this re­gard, that al­most all care will be pro­vided in an out­pa­tient-based fa­cil­ity, and hos­pi­tals will be re­ally spe­cial­ized in the care they pro­vide and for re­ally sick peo­ple with lots of prob­lems.

Our care model is driven by the physi­cians, and we’ve tasked our­selves with be­ing able to de­liver care ef­fi­ciently and not bank­rupt the com­pany in a care model that seeks to pro­vide care at home that of­ten times, most times, doesn’t have a billing code as­so­ci­ated with it. Michael McCurry

Michael Hule­feld Ochsner Health Sys­tem New Or­leans

Michael McCurry Mercy Ch­ester­field, Mo.

Tracy Rogers As­cen­sion Wis­con­sin Glen­dale

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