There’s strength in numbers
Hospitals in systems outperform independent hospitals on key quality metrics
As reimbursement dollars are increasingly tied to performance outcomes, it’s harder for small and medium-sized hospitals to remain independent.
The push to value-based care consumes considerable resources in both staff time and money, requires a robust technology infrastructure and a healthy approach to data analytics, as well as a dedication to root out variation and improve care across the continuum. At the same time, providers face ever-shrinking reimbursement for their services.
These pressures, among other market forces, have led to a sharp decline in independent hospitals. Of the 4,862 community hospitals in the U.S., 65% are part of a system, according to 2017 data from the American Hospital Association; that compares with 5,008 community hospitals in 2009, when 58% were in systems.
While there’s ample debate on the impact consolidation has on costs, a new study suggests that the movement of independent hospitals to systems might actually be improving patient care and helping providers achieve better outcomes.
Small and medium-sized hospitals that are part of systems perform better than their independent peers on seven of 12 quality and cost metrics: inpatient mortality, 30-day mortality, core measures, average length of stay, inpatient expense, operating profit margin and overall balanced performance, according to an exclusive study conducted for Modern Healthcare by Truven
Health Analytics, IBM Watson Health.
The analysis included 2,740 hospitals from Truven’s annual 100 Top Hospitals study, which uses a variety of Medicare patient data to compare hospitals. Organizations are evaluated based on metrics such as patient-satisfaction scores and emergency department wait times.
Truven compared 12 performance metrics from 2014 to 2015 between independent hospitals and hospitals in a system. There were 882 independent hospitals included in the study and 1,858 system hospitals. Truven defined a health system as having two or more general acute-care hospitals. The hospitals were also divided into five separate categories: major teaching hospitals (400 or more acute-care beds), teaching hospitals (200 or more acute-care beds), large community hospitals (250 or more acute-care beds), medium-sized community hospitals (100-249 acute-care beds) and small hospitals (25-99 acute-care hospitals).
Truven found that there was no statistically significant difference in performance metrics between independent teaching and large community hospitals versus those affiliated with a system. This is likely because teaching hospitals and large community hospitals don’t need to rely on a system as much as small or medium hospitals, said Jean Chenoweth, Truven’s senior vice president of performance improvement and the 100 Top Hospitals program. Teaching hospitals are often supported by a research institution and large community hospitals are boosted by a large patient volume so they are able to survive on their own, she said.
On the other hand, small and medium hospitals affiliated with systems reported better performance metrics than their independent peers, the Truven study found.
Small and medium hospitals benefit from the resources, staff and tools from their affiliate systems to achieve superior performance, Chenoweth said. “The consolidation of the hospital industry is actually bringing higher value to communities. The formation of systems is allowing medium and small community hospitals to improve.”
Systems often enable small and medium hospitals to implement an integrated electronic health record system, new service lines and best
practices that improve quality, said Meg Guerin-Calvert, president of the Center for Healthcare Economics and Policy at FTI Consulting. In addition, a system might have a population health department focused on helping its hospitals implement more value-based care approaches.
“A system is able to take in information and disseminate it to its smaller hospitals,” Guerin-Calvert said.
According to Truven’s analysis, system hospitals performed on average at the 55th percentile for inpatient mortality versus independent hospitals performing at the 44th percentile. In addition, length of stay was 6.1 percentage points better at system hospitals compared to independent facilities.
Although Truven found that system hospitals report better quality, their ability to lower costs was less clear. System hospitals reported lower inpatient expenses by 3.5 percentage points, but they performed worse in Medicare spending. Per beneficiary spending was 5.14 percentage points higher at system hospitals compared with independent hospitals.
Given the fact that Medicare spending per beneficiary covers the entire episode of care including 30 days after a patient is released from the hospital, it’s not surprising systems were spending more, said David Foster, lead scientist of value-based care analytics at IBM.
System hospitals are more likely to use resources after a patient is discharged to prevent readmissions, such as using home health services or enlisting care coordinators to follow up with patients, Foster said.
Take Peoria, Ill.-based OSF HealthCare, which has focused on preventing readmissions for Medicare beneficiaries across its 11 hospitals.
The system has enlisted care coordinators to follow up with patients 72 hours after they are released from an OSF hospital. The calls are to ensure the patients have scheduled a follow-up appointment, picked up their medications and to check if they have any questions about their care plan.
This practice was implemented across the system and has helped reduce readmissions, said Robert Sehring, OSF’s chief operating officer. The system has been able to keep the readmission rate below 10% because of the efforts.
Most of the time, practices are implemented across the system in an effort to eliminate variation and establish standards of care. The electronic health record is a critical instrument to establish uniform protocols across the hos-
pital, Sehring said.
OSF deployed an EHR from Epic Systems Corp. across all of its facilities. When a best practice has been established—usually by frontline staff—it is baked into the clinical decision support system. For example, if a patient is diabetic, the EHR will prompt the physician to ask if he has received a recent renal eye exam.
For OSF St. James-John W. Albrecht Medical Center, one of Truven’s 100 Top hospitals in the small hospital category, the integrated EHR enables staff to monitor the quality metrics at other OSF hospitals to see how they compare to their peers, said Brad Solberg, president of the hospital in Pontiac, Ill.
The integrated medical record also allows for easy transition between inpatient and outpatient settings. If patients need to be transferred to one of the system’s larger hospitals for more specialty treatment, their medical records follow them easily so the physician knows what the care plan is, Solberg said.
But transferring a patient from a smaller hospital to the large flagship facility in Peoria is not the goal. “One of the things we strive for is being able to treat patients closer to their home,” Sehring said. “Our mindset is how do we ensure patients get the best care at every facility.”
Specialists from across the system travel every day to different facilities that need additional help. For example, a cardiologist from OSF St. Joseph Medical Center in Bloomington, Ill., stops by OSF St. James every day to check in on
patients with heart problems. There is also an electronic-ICU at OSF St. James that allows neurologists from across the system to consult with patients suffering from a stroke or other brain issues.
Solberg said without its affiliation with a larger system, it would be much harder for OSF St. James to stay afloat. “As we look to the future, there will be more changes and to face that type of environment on our own would be quite daunting,” he said.
At Mercy Health-Cincinnati, one of Truven’s 15 Top Health Systems, its five hospitals benefit from the support of a large system in efforts to standardize care.
An entire quality team at Mercy Health regularly monitors outcomes data across the system to find inefficiencies and waste, which often leads to new process improvements. For example, in 2014 the quality team noticed high rates of
C. difficile infections. This colon infection can add on average $7,300 in costs to a single patient case. In an effort to address the issue, the quality team asked frontline caregivers for solutions. “They came up with so many marvelous suggestions,” said Janice Maupin, chief quality officer at Mercy Health.
Protocols were implemented such as limiting antibiotic use of drugs known to cause C. diff infections and standardizing guidelines for specimen collection. As a result, C. diff infections at Mercy Health-Cincinnati fell to 138 cases in 2016, down from 260 cases in 2014. Beyond reducing patient harm, cost savings tallied $890,600.
Maupin said that efforts to improve processes often result in reduced costs because waste in the system has been identified. “Our organization does a really good job monitoring costs as we look for variation,” she added.
For Fairview Health Services, a seven-hospital system based in Minneapolis, efforts to standardize process improvements have also led to decreased costs. But every Fairview hospital has a unique set of resources available, so when uniform best practices are implemented each takes its own approach to following the protocol, said Dr. Beth Thomas, interim chief medical officer of Fairview.
When the system recently decided it needed to take action to reduce sepsis across the system, it found a way to implement best practices that suited each hospital’s situation. Pharmaceutical teams were trained to quickly fill an antibiotic prescription less than two hours after its been ordered by a doctor. However, some Fairview hospitals don’t have a pharmacist on-site 24 hours a day to fill the order. Those hospitals came up with a new process to address the problem, such as storing the drugs so they can be quickly accessed by a nurse.
This system-wide approach is beneficial for Fairview’s smaller hospitals because it creates great opportunities to achieve goals and learn from each other, said John Herman, president of Fairview Northland Medical Center, a 100 Top hospital based in Princeton, Minn. “When one site has great results, we are very quick to say let’s implement it elsewhere. We are not shy about being inventive.”