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Should systems buy or build?

An NEJM Catalyst article looks at whether health systems should buy or build to expand. Among the comments:

“As in many industries, health care has experienced waves of consolidation in the name of growth. Hospitals have bought physician practices, doctors are opening ambulatory surgical centers, and there is a buy free-for-all across all parts of the continuum of care (and new forms of payment) as never before. Such vertical integration purportedly drives financial efficiencies with scale, improves clinical quality by reducing problems of care transitions, encourages teamwork, and calibrates scope of practice to services provided. Yet the jury is still out. Costs continue to rise as the market power of health systems grow (with lots of finger pointing), readmissions and problems in patient handoffs persist, anticompetitive practices emerge, and quality remains highly variable.

“Perhaps this lack of progress toward the Triple Aim suggests that we should reconsider our assumptions that vertically integrated systems will achieve productivity, patient-centeredness, and will deliver on a scalable version of Kaiser Permanente. Perhaps we should revisit the so-called rules of health care.”

To read the article, please hit this link.

Exiting silos to improve public health-health system coordination

An article in NEJM Catalyst looks at how to better coordinate the functions of public health officials and private-sector health systems. The authors write:

“Moving toward a comprehensive community wellness vision requires a fundamental transformation of how healthcare and public health engage with one another. Previously siloed organizations may find they have duplicative efforts that are ripe to be streamlined. For example, we reviewed cases where local health department funding to address certain public health objectives was made dependent on performing a certain service (e.g., reproductive health counseling), even if the local healthcare system was already efficiently and effectively providing that service for the same population. Rather than reject the funding from the state or federal government, local public health was compelled to implement a duplicative service. A structured partnership that arranges consolidation of these repeat programs could free limited resources within a community to be redirected to other health needs.

To read the article, please hit this link.

More execs being measured for population-health metrics


A small but growing number of hospital systems, among them Trinity Health System, America’s fifth biggest and based in Steubenville, Ohio, are linking executive  pay to population-health measures.As a Modern Healthcare article notes, “{T}he group is sure to expand as more health systems gravitate toward emerging value-based models and risk contracts that require hospitals to care for entire populations of people long after they leave the hospital.”

“Since Medicare began reimbursing providers based on quality and dinging them for poor performance in quality measures in programs like Medicare shared savings and value-based purchasing, providers have had to shift their focus to keeping people healthy long-term, rather than treating them only when sick. There’s ample empirical evidence that incentives drive behavior, so it made sense for hospital boards to prod leadership toward quality by putting part of their paychecks at risk.”

”Today, hospital executive compensation incentives are a mix of financial, quality, patient satisfaction and, increasingly, population health measures. Executive compensation experts say the weight is shifting toward the quality portion. Nearly all large health systems incentivize their executives based on cost, and 90 percent include quality measures, like hospital-acquired infections and readmission rates, in their annual plans, according to data from executive compensation firm Sullivan, Cotter and Associates,” Modern Healthcare reported.

But this will be difficult, given that it’s tougher to measure quality, with the subjectivity involved, than to  foll0w the metrics in old-fashioned fee-for-service medicine, especially if patient data from all appropriate providers aren’t  properly integrated in a health system.

To read the article please hit this link.



Why nurse leaders should be on hospital boards


Richard A. Hachten II, former chief executive officer of Alegent Creighton Health, the Omaha, Neb.-based regional health system now known as CHI Health, and Kathryn Mershon, MSN,  who served on the Alegent Creighton Health board for nine years and was the first woman vice president of Humana Inc., argue that putting  nurse-leaders on hospital boards strengthens the institutions. Among their remarks in Hospital Impact:

“We view this as an optimal time for health systems to add a nurse leader to their boards because the profession’s caregiving expertise and awareness of patient perspectives is needed for sound strategic decision-making. …

“Here’s our short list of ways a nurse with high-level business expertise can help a health system board strengthen profitability and patient outcomes:”

  • “A nurse who has a strong business background and substantial healthcare experience can offer practical, useful input to improve a health system’s board.”
  • “To improve quality outcomes, resource utilization and financial metrics, it’s critical that nursing leadership and front-line nurses, executives and board governance are all in partnership. Without that, change is simply not possible.”
  • ”A board without diverse perspectives risks overlooking uncomfortable yet important issues.”
  • ”There is a ready cohort of nurse leaders with the governance and healthcare expertise to be excellent board members. All the board has to do is get them oriented to the organization. This next-generation cadre of nurse leaders is ready for an important task. Their input on behalf of the critical issues and the bigger picture will be essential to protecting and reinforcing the nation’s vital healthcare sector in the coming era.”

To read their essay, please hit this link.



Wis. ACO laying off 40% of employees


The Milwaukee Business Journal reports that Integrated Health Network {IHN} of Wisconsin, an Accountable Care Organization based in Brookfield, has laid off 21 employees (40 percent of its employees) as  part of shifting some functions from ACO administrators to participating healthcare organizations.

“IHN is in the process of adjusting operations and staffing across the organization to most efficiently and effectively meet the network’s evolving strategic needs,” Kathy Allen, IHN’s vice president for  marketing and communications, told the publication.

The job cuts followed   strategic planning sessions with the ACO’s board of managers.

“It was determined that owner-member health systems and health plans now have the capabilities to absorb many functions IHN provides as they continue the transition to value-based care,” Ms. Allen said. Health systems can perform some of these functions. Some of these systems run their own health plans and population-health management programs.

Ms. Allen said that many of the employees being fired are being considered for jobs within health systems that are members of the ACO.

To read the Milwaukee Business Journal article, please hit this link.

4 imperatives for population-health management



This piece in Healthcare Executive discusses “four imperatives” for population-health  management. Some excerpts:

“The role of healthcare’s leaders now centers on building organizational agility, defined as the ability to nimbly operate current business while simultaneously preparing for changing/new conditions.

“Today’s successful leaders have to be both transformers-moving healthcare to a PHM-based model-and business curators-managing the traditional business while healthcare in their community(ies) transitions to the new model.”

Imperative 3: Experiment and Innovate

“Unlike the ‘tipping point’described by Malcolm Gladwell,  which happens quickly and is hard to prepare for because predictions are lacking, healthcare organizations have had ample forewarning of the basic trajectory of health system change. Organizations that use value-based payment and delivery models now, even on a limited scale as pilot tests, are better positioned for success as the delivery system continues its progress toward broad implementation of value-based care.”

“Proactive hospital and health system leaders are innovating, looking within and beyond healthcare for models that work.”

Imperative 4. Use Integrated Planning and a Blueprint for the PHM Journey

“Revisioning and redesigning an organization’s delivery system should be staged based on the entity’s unique market, capabilities, desired role and competitive factors.”

“Leadership must ensure that the foundational planning process is grounded in fact-based market, financial and clinical/quality realities, and the organization’s current and expected performance related to these realities. Certain organizations will be able to carve out a strategy to deliver only high-end acute-care services. But for most hospitals and health systems, an effective ambulatory and virtual strategy will be key to market relevance.”

In Ariz., too, mixed record on Medicare Accountable Care



 A dust storm moves in on Phoenix.
The Arizona Republic reports that “six out of 10 Arizona health systems participating in …{the}  programs spent more money than Medicare projected last year, and one program broke even. Another three health systems saved Medicare money compared to what the agency projected spending.”

Healthcare organizations that meet  certain quality and safety goals while reaching Medicare’s savings targets can earn bonuses from the Feds.

And, the paper notes, the concept  has also gained momentum in the private sector. “Nordstrom and Aetna are among the private-sector companies that have sought Accountable Care arrangements with Banner Health Network. The Banner-Aetna arrangement serves more than 100,000 people and helped trim health spending by 5 percent in 2013.”

Other local {Phoenix area} hospitals, too, are looking to expand Accountable Care beyond the Medicare initiative.

“It really has spurred change in what we’re doing,”  Richard Silver,  M.D., senior vice president  for  population health at Scottsdale-based HonorHealth, told The Republic. “What we were doing before was not sustainable. Health care is too expensive.”

In Arizona, 10 health systems have enrolled more than 175,000 seniors in Accountable Care and saved Medicare about $2.2 million, says the Centers for Medicare & Medicaid Services.

Still, the newspaper reports, Arizona’s savings are largely due to Banner Health Network, “which saved Medicare more than $29 million in 2014, the third largest savings among programs nationwide.”

A problem has been that organizations do not necessarily know which patients Medicare assigns to  an Accountable Care network. Medicare has assigned the patients through their physicians, but hasn’t been telling the ACOs which patients are assigned to their networks until the end of the year. However, Medicare is changing that policy.



Healthcare consolidation all over


The Wall Street Journal reviews the accelerating pace of consolidation in healthcare, which, as it says, is is “transforming the medical marketplace into a land of giants.”

Proposed huge health-insurance mergers parallel what has been happening among providers, with this year on pace to have the most U.S. hospital deals since 1999; 71  have been announced through the end of August, says Irving Levin Associates,  which follows healthcare-sector transactions.

“The supersizing, which hasn’t been slowed so far by signals of regulatory concern about health-care consolidation, reflects efforts by companies in both industries to gain the scale and heft to succeed amid changes unleashed or accelerated by the  {Affordable Care Act). Those include growing pressures to constrain costs, and new forms of payment that require providers to meet efficiency and care-quality goals. Health systems are adding hospitals, doctor practices and a range of other services that enable them to manage all of a patient’s care. And each industry is bulking up to amass leverage in contract negotiations against the other.”

“The ACA is a trigger,” Robert Kocher, a former White House health adviser now at venture-capital firm Venrock, told the paper. “{A}s providers have gotten consolidated, payers have been finding they’re getting pushed by providers saying, ‘Take my rates or you’ll have no network.’  The health-plan deals aim ‘to help balance the power.”’



Hospitals on a hiring spree



To the surprises of many in the sector, hospitals and health systems are on something of a hiring spree, adding 15,900 in August, say preliminary figures from the Bureau of Labor Statistics. Indeed, the sector added more than 100,000 jobs in the first eight months of this year.

The additions to hospital payrolls this year has  been more than most other industry sectors.

What’s driving the hiring, of course, is increased admissions at many hospitals, particularly driven by the flood of aging Baby Boomers.


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