Lever­ag­ing a part­ner­ship im­proves hos­pi­tals’ qual­ity, low­ers costs: re­port

Modern Healthcare - 100 Top Hospitals - - FRONT PAGE - By Beth Kutscher

Lever­ag­ing a part­ner not only im­proves qual­ity, but low­ers costs.

Ac­qui­si­tion ac­tiv­ity has reached a fever pitch, mo­ti­vated in large part by health­care re­form and eco­nomic un­cer­tainty. But what has long been a clear busi­ness case for con­sol­i­da­tion may also be among best prac­tices for clin­i­cal out­comes.

Squeezed by de­clin­ing vol­umes and shrink­ing re­im­burse­ment, hos­pi­tals are find­ing it harder to go it alone. And new re­search from Tru­ven Health An­a­lyt­ics has found that the im­pact of be­ing an in­de­pen­dent hos­pi­tal is felt not only on the bal­ance sheet, but also at the bed­side.

Hos­pi­tals that are part of sys­tems not only pro­vide more cost-ef­fi­cient care, but they also de­liver a higher qual­ity of care, ac­cord­ing to the Tru­ven anal­y­sis, which used data from its 100 Top Hos­pi­tals and 15 Top Health Sys­tems stud­ies.

(The 15 Top Health Sys­tem list ap­pears on p. 12. The list of 100 Top Hos­pi­tals starts on p. 17.)

Its re­search found that hos­pi­tals that were part of larger chains out­per­formed their in­de­pen­dent peers on safety, qual­ity and cost-ef­fec­tive­ness mea­sures. In ad­di­tion, hos­pi­tals that were part of sys­tems were about three times more likely to ap­pear on the 100 Top Hos­pi­tals list.

“While the for­ma­tion of health sys­tems was pri­mar­ily for eco­nomic rea­sons, his­tor­i­cally, we are find­ing that be­ing part of a sys­tem is ac­tu­ally driv­ing higher qual­ity in today’s world, as of 2010,” says Jean Chenoweth, se­nior vice pres­i­dent of per­for­mance im­prove­ment and 100 Top Hos­pi­tals pro­grams at Tru­ven. “And that bodes very, very well.”

Pre­vi­ous stud­ies have not been able to show that sys­tems lower the cost of de­liv­er­ing care or im­prove pa­tient out­comes. But sys­tems have con­tin­ued to get big­ger, seek­ing out op­por­tu­ni­ties to ac­quire acute-care hos­pi­tals and other fa­cil­i­ties. Many in­de­pen­dent hos­pi­tals, mean­while, have sought to lever­age part­ner­ships.

The Pa­tient Pro­tec­tion and Af­ford­able Care Act in par­tic­u­lar has en­cour­aged col­lab­ora- tion among dif­fer­ent parts of the health­care sys­tem, Chenoweth says, par­tic­u­larly the push to form ac­count­able care or­ga­ni­za­tions or ACO-like pro­grams.

In ad­di­tion, health­care re­form has put the spot­light on im­prov­ing the qual­ity of care as well as low­er­ing the cost of care.

“I think the sys­tems of­fer many of the orig­i­nal ben­e­fits that sys­tems al­ways of­fered,” Chenoweth says, cit­ing ac­cess to cap­i­tal and economies of scale. But with the goals of health­care re­form re­quir­ing greater col­lab­o­ra­tion among dif­fer­ent types of providers, “th­ese sys­tems are pro­vid­ing a con­tin­uum of care.”

And that means in­di­vid­ual med­i­cal cen­ters no longer have to be all things to all pa­tients.

“What a smaller hos­pi­tal gains from be­ing part of a larger sys­tem is ac­cess to pro­to­cols, ac­cess to ex­per­tise,” Chenoweth says. She adds

that, rather than in­vest in ev­ery lat­est piece of tech­nol­ogy or try to add ev­ery ser­vice line, they can take ad­van­tage of telemedicine or the abil­ity to trans­fer pa­tients to an­other fa­cil­ity.

That’s how it works at Baystate Health, a three-hos­pi­tal sys­tem in Spring­field, Mass., which also in­cludes a chil­dren’s hos­pi­tal, large physi­cian prac­tice, vis­it­ing nurse as­so­ci­a­tion and hos­pice. The sys­tem has also built an aca­demic af­fil­i­a­tion with Tufts Univer­sity School of Medicine and serves as the largest teach­ing site for the in­sti­tu­tion.

Dr. Evan Ben­jamin, the sys­tem’s se­nior vice pres­i­dent and chief qual­ity of­fi­cer, notes that its two smaller com­mu­nity hos­pi­tals—90-bed Baystate Franklin Med­i­cal Cen­ter and 31-bed Baystate Mary Lane Hos­pi­tal—can draw on the re­sources of the flag­ship 659-bed Baystate Med­i­cal Cen­ter to pro­vide ter­tiary care.

“That’s re­ally the goal for us—to be a re­gional in­te­grated de­liv­ery sys­tem,” Ben­jamin says. “The idea is to work together.”

The Tru­ven study, Hos­pi­tal Sys­tem Mem­ber­ship and Per­for­mance, looked at per­for­mance mea­sures for 2,791 short-term, gen­eral, non­fed­eral hos­pi­tals. Of that group, 1,628 hos­pi­tals were iden­ti­fied as mem­bers of a larger sys­tem, and 1,163 hos­pi­tals as in­de­pen­dent.

Hos­pi­tals were fur­ther clas­si­fied into three sub­groups: ma­jor teach­ing hos­pi­tals; teach­ing hos­pi­tals; and large, medium and small com­mu­nity hos­pi­tals. David Fos­ter, lead sci­en­tist at Tru­ven’s Cen­ter for Health­care An­a­lyt­ics, notes that the sub­groups helped con­trol for dif­fer­ences in pa­tient mix, such as the more com­pli­cated cases that tend to be treated at aca­demic med­i­cal cen­ters.

The study used data from the CMS’ Hos­pi­tal Com­pare, MedPAR and Medi­care cost re­ports to cal­cu­late per­for­mance on 30-day read­mis­sion rates, sever­ity-ad­justed av­er­age lengths of stay, ad­justed in­pa­tient ex­pense per dis­charge, ad­justed operating profit mar­gin and pa­tient per­cep­tion of care.

The data cov­ered a pe­riod from 2005 to 2010 and was used to an­a­lyze cur­rent per­for­mance as well as five-year per­for­mance im­prove­ment.

A com­pos­ite score was used to iden­tify the best performing hos­pi­tals, and a per­centile rank was as­signed to each fa­cil­ity. And the re­sults found that hos­pi­tal sys­tem mem­bers av­er­aged a score in the 54th per­centile, com­pared with the 45th per­centile for in­de­pen­dent hos­pi­tals.

The re­sults were closer when Tru­ven an­a­lyzed five-year im­prove­ment—52nd per­centile ver­sus 48th—but sys­tem mem­bers still had the edge over in­de­pen­dent fa­cil­i­ties.

As a re­sult, hos­pi­tals had nearly a three-fold higher like­li­hood of earn­ing a spot on Tru­ven’s 100 Top Hos­pi­tals list if they were part of a sys­tem, Fos­ter says. A to­tal of 1.63% of in­de­pen­dent hos­pi­tals made the list com­pared with 4.73% of hos­pi­tal sys­tem mem­bers.

Chenoweth notes that the re­sults were “re­ally highly sig­nif­i­cant” with a p-value less than 0.0001. “The end re­sult was re­ally im­por­tant be­cause most stud­ies looked at the value of sys­tems based on eco­nomics,” she says.

While sys­tems do pro­vide op­por­tu­ni­ties to lower the cost of care, Chenoweth notes that qual­ity, safety, cost and ef­fi­ciency must be in bal­ance in order for a hos­pi­tal to be a top per­former. “Those or­ga­ni­za­tions are pro­vid­ing higher value and they’re sta­ble,” she says, adding that many sys­tems are tak­ing it upon them­selves to im­ple­ment qual­ity im­prove­ment mea­sures.

Prime Health­care Ser­vices, On­tario, Calif., has been an ac­tive ac­quirer of un­der­per­form­ing hos­pi­tals, clos­ing on one deal June 1 with two more in the pipe­line. The hos­pi­tals on its radar were “strug­gling fi­nan­cially, op­er­a­tionally—pretty much ev­ery­thing,” says Luis Leon, chief op­er­a­tiong of­fi­cer, who notes that it typ­i­cally takes about a year to get them up to its stan­dards. “It’s a com­plete over­haul; it’s over­all from A to Z.”

Some of the re­sources Prime pro­vides to the new hos­pi­tals in its sys­tem in­clude run­ning train­ing pro­grams for med­i­cal staff, build­ing a case man­age­ment team, es­tab­lish­ing a hos­pi­tal­ist pro­gram, and in­stalling a med­i­cal direc­tor to fo­cus on pa­tient care and qual­ity of care. The sys­tem has also strength­ened the cor­po­rate po­si­tion of per­for­mance im­prove­ment direc­tor.

“We tend to put em­pha­sis on all those clin­i­cal ar­eas that are prob­a­bly the ve­hi­cle to qual­ity and good pa­tient care,” Leon says. “We start from the clin­i­cal point of view” and fi­nan­cial ben­e­fits fol­low.

One strat­egy the sys­tem em­ploys is iden­ti­fy­ing suc­cess­ful prac­tices at one hos­pi­tal and try­ing to repli­cate them across the or­ga­ni­za­tion—whether it’s a fa­cil­ity that has a par­tic­u­larly ef­fi­cient linen depart­ment or Desert Val­ley Hos­pi­tal, Vic­torville, Calif., be­com­ing the

first Prime hos­pi­tal to win a 100 Top Hos­pi­tals award seven years ago.

Af­ter Desert Val­ley won its place on the list, Leon, who was then its ad­min­is­tra­tor, re­calls that an ef­fort was made to use the award cri­te­ria to re­pro­duce the re­sults across the sys­tem.

It’s that sort of ex­change that helped a fa­cil­ity such as 369-bed Cen­tinela Hos­pi­tal Med­i­cal Cen­ter in the un­der­served com­mu­nity of In­gle­wood, Calif., earn its spot on the 100 Top Hos­pi­tals list, Leon notes. Prime it­self, which owns 17 hos­pi­tals, has twice been named a 15 Top Health Sys­tem.

“We are a hands-on sys­tem,” Leon says, adding that hos­pi­tals are com­pared against each other and held to task to raise stan­dards. CEOs also meet reg­u­larly to dis­cuss what’s go­ing well and what’s not go­ing well. “For us, the mo­ti­va­tion is to be the best.”

At Baystate, which this year was named a 15 Top Health Sys­tem for the first time, board mem­bers set a goal last year of elim­i­nat­ing hos­pi­tal-ac­quired in­fec­tions and get­ting blood­stream in­fec­tions down to zero. The sys­tem tracked mea­sures that led to those com­pli­ca­tions and in­sti­tuted best prac­tices to pre­vent them, Ben­jamin notes.

“It es­sen­tially starts at a board level and cas­cades down to the in­di­vid­ual level so that ev­ery­one is aligned around that goal,” he says.

Health sys­tems, Ben­jamin notes, have the ad­van­tage of be­ing able to tap into a cen­tral­ized qual­ity depart­ment to make im­prove­ments across the or­ga­ni­za­tion.

“To do qual­ity well, you need an in­fras­truc­ture. From my ex­pe­ri­ence, most health sys­tems take ad­van­tage of back room economies of scale to fo­cus not only on fi­nan­cial (mea­sures), but also qual­ity.” —Dr. Evan Ben­jamin,

Baystate Health

“To do qual­ity well, you need an in­fras­truc­ture,” he says. “From my ex­pe­ri­ence, most health sys­tems take ad­van­tage of back room economies of scale to fo­cus not only on fi­nan­cial (mea­sures), but also qual­ity.”

The dif­fer­ence in clin­i­cal out­comes be­tween 100 Top Hos­pi­tals win­ners and their peer group is ap­par­ent.

In 2005, pa­tients treated at both groups of hos­pi­tals had about a 4.3% 30-day riskad­justed mor­tal­ity rate. But their per­for­mance di­verged over the next five years.

“Over­all, post-dis­charge 30-day mor­tal­ity is go­ing up,” Fos­ter says. But not nec­es­sar­ily at Top Hos­pi­tals, which out­per­formed their peer group ev­ery year be­tween 2006 and 2010.

In 2010, the most re­cent year the study looked at, pa­tients treated at a 100 Top Hos­pi­tals fa­cil­ity had about a 4.4% risk ad­justed 30-day mor­tal­ity rate com­pared with 4.6% for pa­tients treated at a hos­pi­tal in the com­para­tor group.

Baystate has for­mal­ized its fo­cus on pa­tient out­comes in its own Cen­ter for Qual­ity of Care, which works closely with its Di­vi­sion for Health­care Qual­ity. The sys­tem es­tab­lished the cen­ter in 2008 to con­duct re­search on safety, qual­ity and ef­fec­tive­ness.

Its stud­ies have looked at clin­i­cal is­sues such as get­ting doc­tors to wash their hands, im­prov­ing treat­ment op­tions for sep­sis and in­ap­pro­pri­ate med­i­ca­tion use in surgery pa­tients.

Ben­jamin notes that the cen­ter came to much of the same con­clu­sion in its own work to try to un­der­stand why some hos­pi­tals im­prove while oth­ers lag be­hind. “Hos­pi­tals that re­ally have ro­bust in­fras­truc­ture for qual­ity, have lead­er­ship for qual­ity, tend to do bet­ter,” he says.

Baystate Mary Lane Hos­pi­tal is part of a larger sys­tem and draws on the re­sources of flag­ship Baystate Med­i­cal Cen­ter.

Prime Health­care Ser­vices repli­cates suc­cess­ful prac­tices across the or­ga­ni­za­tion, which helped its Cen­tinela Hos­pi­tal earn a spot on the 100 Top Hos­pi­tals list. Cen­tinela, above, is in the un­der­served com­mu­nity of In­gle­wood, Calif.

The two smaller hos­pi­tals in the Baystate Health sys­tem draw on the re­sources of the flag­ship Baystate Med­i­cal Cen­ter, above. The sys­tem set goals last year to elim­i­nate hos­pi­tal-ac­quired in­fec­tions and re­duce blood­stream in­fec­tions to zero.

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