FM002 Marketing Strategies

ACTIONSSTRRATEGIC FTHEHEALTHCARE MARKIETER

FEATURECASE: INTERMOUNTAIN HEALTHCARE

sCaseisdescriptive rather than decision oriented and requiresanalysis to understand the eS orthesituation but does not require anyrecommendationsforaction to bemade. It

ariouselementsof a model healthcare organization andinvitesstudents to considera Mo uestions and topics addressed in the text and brought to light in the story of Inter-

mOuntain Healthcare.

ormation for this case was derived from Intermountain's website at www.intermount

ainhealthcare.org.

INTRODUCTION

Afierisfoundingi6n 1975,SaltLake City, Utah-basedIntermountainHealthcareevolvedfrom o-tor-profit hospitals in Utah, Idaho,and Wyoming toafullyintegrated15Doselyaffliated not-for

system widely recognizedasone of thefinesthealthcareorganizationsin thehealthcaredelivery s) world.

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162

Healthcare Marketing: A Case Study Appro ach

COMPANY OVERVIEW 185 clinics,

and varioushealth insuranceplans from SelectHealth and brought together 1,000physiciansand clinicians in the Intermountain Medical Group. Inrernse Healthcarewasthelargesthealthcareprovider in the lntermountain West, with m. 33,000employeesservingthehealthcareneedsof Utah andsoutheastern Idabo o (AnumericaloverviewofIntermountainHealthcareisprovidedinExhibit ) Et clinical carewas thebasis of Intermountains mission and the organization's greatest

Through theyears, Intermountain came to own and operate 22 hospitalsher1omore than

mountair than

Idahoresidents Kcellent

t con-

cern.Whether through its high-tech/high-touch clinical programs or by improvinothe treatmentofcertain chronicdiseases,all three parts of Intermountain Healthcare (;.(.e., hospitals,medicalgroup, andinsuranceplans) contributed in essential ways to thesho:aring ofbestmedicalpractices--and raisingthestandards of clinical excellence.

EXHIBIT 1

Intermountain Healthcare by the Numbers (2012)

Charity cases/care 239,195/$252 million

Hospitals

Clinics

Clinics owned/supported for uninsured/low-income patients

Acute hospital admissions

Acute patient days

Emergency room visits

Inpatient surgeries

Ambulatory surgeries

Births

Patientvisits to low-income clinics (owned or supported) Employees

22

185

18

140,141

519,407

482,013

41,002

107,587

30,873

260,817

33,000

2,500

1,000

600,000

Affiliated physicians

Employed physicians

SelectHealth members

Source: Intermountain Healthcare (2013a),.

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Part IV: Strategic Actions of the Healthcare Marketer 163

MISSION AND PURPOSE

From Intermountain's earliest years, its mission was excellence in the provision of health- careservices to communities in the Intermountain region." Excellent service to patients,

customers, and physicians was the company's most important consideration.

VISION STATEMENT

Intermountain's formal vision statement emphasized its intent to be a model healthcare

system by continually learning and providing extraordinary care in all its dimensions (Intermountain Healthcare 2013b):

Clinical Excellence: We will deliver the best clinical care in a consistent, integrated

way.

Patient Engagement: We will provide a compassionate healing experience, and we will engage patients in decisions about their health and care.

•

•

• Operational Efectiveness: We will be wise and careful stewards of our resources

to enable Extraordinary Care.

Physician Engagement: We will create systems and processes that help our physi-

cians best serve their patients.

• Community Stewardship: We are committed to serving the diverse needs of the Intermountain region and to providing generally available medical services to all

residents, regardless of ability to pay.

Employee Engagement: We value our employees as our most important resource.

CORE VALUES

The company'svalues, publicly posted and widely embraced, wereas follows (Intermoun- tain Healthcare 2013b):

Mutual respect: We treat others the way we want to be treated.

Accountability: We accept responsibility for our actions, attitudes, and mistakes.

Trust: We act with integrity and can count on each other.

Excellence: We do our best at all times and look for ways to improve.

•

• •

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164 Healthcare M arketing: A Case Study Approach

COMPANY ETHICS

Every day, patients, health plan members, and their families came to Intermo need, trusting thesystem'sproviders to deliver the very best medicalCare . Intermountain'semployeeswere committed to honoring their trust by providi clinical careand superiorservice with the higheststandards of integrity. This applied to everyaspect of the companys workand was fundamental to vision, andvalues. Intermountain expectedevery one of its employees, clinicians vendors, contractors, and volunteers to understand and follow the rules andreauies that applied to their work.

in service.

y providingexcellen

itment itsmission

nents

General Ethics Standards

1. We are committed to Intermountain's values of Trust, Excellence,ACCOuntability

2. We perform our jobs and assignments with the highest standards of honestyand

and Mutual Respect.

integrity. We treat each other, our patients and members, business partners,ven- dors and competitors fairly.

3. We know, abide by and understand the specific laws, policies and proceduresthat apply to our jobs and assignments, and to us as individuals.

4. We speak up with concerns about compliance and ethics issues. Specifically, we report observed and suspected violations of laws or policies, and we agreeto report any requests to do things we believe may be violations. Furthermore,we cooperate with any investigation of potential violations.

5. We recognize that our daily work gives us each the opportunity to seeproblems in our local areas before they become apparent to others or to management.We are empowered and responsible to raise questions about potentially noncompli- ant or unethical practices.

6. If we have questions about a situation, we ask for help. We may talk to our super visor or director, the facility/entity compliance coordinator, a company attorney the Corporate Compliance Officer, or call the 24-hour Compliance Hotline at(800) 442-4845.

Source: Intermountain Healthcare (2011).

INTERMOUNTAIN's INTEGRATED APPROACH

Intermountain's evolution into an integrated systemwas completed inphases.w organization was founded in 1975, it comprised 15 hospitals. By 1985, it was a hospital system that granted its facilities such a degree of autonomy that tney

the

multi- ctually

When

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Strategic AActions of the He althcare Marketer part V: Strat 165

ypypercdwithcac

eted,butit

calth (then called HC HealthPlans)hadrecentlybeen business and interacted little with other parts of Inter-cachother. SelectH

edas a satellite busine butitexisted in.Nearlyall the

rhe physicians who practiced at Intermountain wereindependent.

mouncain.Near

Thefirstphaseof Intermountain ho theirgoverningboards followed

ofintegration bospitals. The hospitals were reorganized into regions, and

85-1992) wastheintegrationof

ng boards followed suit. Managementwasconsolidatedand

tookonregional responsibi insteadofcompetewith eact

lities. Intermountain hospitals began to cooperate ach other

od nhase of integration (1992-present) wassystemintegration. By Thesecondphase

• aid-1990s,Intermountainhad allotion work: hospitals, the IntermountainMedicalGroup ofemployed the pieces in place to make vertical

integrationwork: physicians,and SelectHealth.

BENEFITSOF

lathen onlntermountain'sperspective, the internal and marketplacebenefits of integration

indudedthe following:

OF ALTH SYSTEM INTEGRATION

id-1980sand early 1990s, -ring the sometimes disparate components of hospitals andhealthcaresystems.

much had been written about theneed for andbenefits

Clinicalquality. As stated at the beginning of thiscase,whether through its clinicalprograms or by improving the treatment ofcertainchronicdiseases, allthree Intermountain divisionsHospitals/Health Services,SelectHealth, andthe Intermountain Medical Group-contributed inessentialways tothesharing of best medical practices and raising thestandards of clinicalexcellence. For example, in treating diabetes,SelectHealth helped educateall its enrollees about the causes,dangers, and warning signs of diabetes.Members diagnosed with diabetes werecontacted regularly by SelectHealth through educational materials and reminders about tests they

heededto help manage their disease. At the primary carelevel, through the emountain Medical Group, Intermountain offereditsDiabetesCare

Manageme wit diabetes to help them adhere to their careplans andaccessthe many

andtheseondary care physician and hospital teamwasseamless.The entire

ment program, in which caremanagers workeddirectlywithpatients

ces availablethroughIntermountain.Forpatientswithdiabeteswho guired hospitalization, the handoff berween the primarycarephysiCian

Inter workedtogether to

ntain team, from health plan tohospital,communicatedand ensure the patient received the bestpossiblecare.

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166 Healthcare Marketing: A Case Study Approach

Service quality One example of the way integration helped improveservice quality was via SelectHealth's Member Advocates service, which health plan members called if they needed helpaccessingvarious Intermountainservices. In addition, patient billing was simplified, and programs (such as My Health) enabled patients toaccess both their SelectHealth information and their medical records online.

Lowercosts. In the vertically integrated Intermountain organization, costs were not reduced just through economies ofscale and efhcientmanagement. The really significant cost reductions were achieved by improving the total process of medical care. By identifying and implementing best medical practices, Intermountain not only provided quality healthcare; it alsoachieved lasting improvements in cost structures. Moreover, those savings helped Intermountain maintain the financial strength required to provide freecareto those unable to pay.

Prevention. The incentives andresources of Intermountain's doctors,hospitals, and health plans were aligned to help people stay well.

Scopeofservice. With hospitals, physician clinics, health plans, homehealth agencies, occupational medicine clinics, and other services, Intermountain provided aseamless continuum of care.

Over the years, healthcare leaders throughout the world called on Intermountain for technical support and education on clinical research and process management.

PATIENT Focus

Intermountain Healthcare declared that every person who came to Intermountain forcare was unique. Its patients were individuals in the physical sense, of course, but also interms of life stories, outlooks, and personalities. Intermountain employees recognized thatthe healthcare they provided needed to be carefully designed with each patient's specialneeds in mind. Over time, Intermountain createda culture of healing connections anddeveloped many systems to help physicians, nurses, and other caregivers provide the mosteffective treatments for each patient:

Research. Through its clinical programs and services, Intermountain made the benefits of the latestresearchavailable to clinicians. The company'sboard oftrusteesestablished annual goals that targeted continual improvements in healthcare quality.

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V. Strategic Actions of the Healthcare Marketer Part IV:

167

ntermountaindevelopedadvancedclinical information formationsystems.

systems that equipped caregivers with sophisticated decision-support and

Communicationtools.

Supportfor patient health. Intermountainestablishedprevention,wellness, andcare management programs to help patients live more satisfying lives and supDorted them as they followed the treatment programsprescribed by their

doctors.

RELATINGTO THE PHYSICIAN COMMUNITY Fromthebeginning, Intermountain recognized that itneededto build strongrelationships withphysicians. In the 1980s, Intermountain began toengagephysicians more meaning- fully in the organization's operations and governance. On the basis of a recommenda- tion by a joint Intermountainphysician task force, the Intermountain Medical Group (originallycalled the IHC Physician Division) wasestablished in 1994. The task force

highlighteda number of important tenets:

Qualiry improvement and utilizationmanagement.Physiciansdirect patient care in hospitals and are critical to their efforts toimnprovecareprocesses,

anage utilization, and develop clinical programs. Prevention. Physicians can do more than treat and managedisease.They canalso help their patients prevent illness and help reduce or even prevent

hospitalizations. Security. Managed care plans areable to direct their members to certain hospitals and physicians. In the 1990s, manyphysicianssaw an alliance with Intermountain asa way of securing bothreasonablereimbursement levelsand

patients. Practicemanagement. Intermountain brings financial and administrative resources to Medical Group physicians, who are then free to focus on patient care.Theyalsoarefreed of most of the administrative workassociatedwith asolo or group practice. Furthermore, they benefit from Intermountain's investment in new,computer-basedclinical information systemsthat heln

take patient care to higher levels. Pbysician recruitment. The Intermountain area community benefits when the Medical Group createsnew physician clinics located close to the patients they

serve.

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168 Health care M arketing: A Case Study Approach

RELATING TO THE PAYER COMMUNITY: INTERMOUNTAIN'S FORAY INTO HEALTH INSURANCE

Until 2006, SelectHealth was known as IHC Health Plans and was presented to thepublic as an aspect of the Intermountain Healthcare brand. However, research showed public confusion and misperceptions about Intermountain, so as part of Intermountain's larger rebranding, IHC Health Plans was relaunched as SelectHealth. Like its parent compan, SelectHealth was organized as a nonprofit, which made it accountable to the community rather than to shareholders.

Intermountain launched its first health plan in 1984. Named Health Choice,the plan was a PPO, and the first enrollees were Intermountain's own employees. By the end of 1985, 93 companies were offering Health Choice to their employees andmore than 38,000 people were covered by the plan. A second product, an HMO called IHC Care, was introduced in July 1985 and had 11,000 members by year-end. In recentyears, SelectHealth offered a broad range of plans to more than 500,000 members.

In summary,SelectHealthadvancedIntermountain'smissioninseveralways:

Through SelectHealth, the entire Intermountain organization remained sensitive to the financial pressures faced by those who paid healthcare bills: employers, plan members and patients, and government. Through quality improvement and prevention, Intermountain focused on ways to keepthose costs as low as possible.

SelectHealth supported disease management programs that promoted health. For example, as part of Intermountain's Diabetes Care Management program, members of SelectHealth who had diabetes received reminders to take advantage of special benefits, such as diabetes counseling, free glucometers, and free clinics. SelectHealth wanted to keep its members healthy for the long term because doing soincreased members' quality of life and reducedcost.

SelectHealth directed a predictable Aow of patients to Intermountain physicians and hospitals, which helped keep the organization and its stakeholders fnancially secure and able to emphasize quality improvement and prevention. Through SelectHealth, Intermountain was able to work directly with many patients and customers rather than exclusively throughthe mediation of third-party insurancecompanies.

RELATING TO THE PUBLIC AT LARGE

Since its founding, Intermountain actively engaged the community, and its family- oriented image and sponsorship were present at many and varied events, including the 2002 Olympic Games, for which the company servedas official medical provider. Through theyears, conventional media campaigns including print advertisements, television,radio,

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Part V: Strategic Actions of the Healthcare Marketer 169

odbillboardswere widely used. In light of market research in the mid-2000s that sug- mested Intermountains image as a large healthcare corporation seemingly undermined its focuson high quality and cost-effective care, the company changed its longtime name fromIntermountain Health Carewidely referred toas IHC-to Intermountain Health- are.The company's logo was also changed to reaffirm Intermountain Healthcare's mission roprovide excellent care. In recent years, Intermountain began implementing social media anddeveloped a robust presence on Facebook, Twitter, YouTube, and Foursquare.

Intermountain's most difficult and prolonged legal and public relations challenge arosein the 1990s, when some county governments determined that Intermountain hospi- talsshouldpay property tax because of the increasing business orientation of the healthcare industry in general. Intermountain ultimately survived this challenge and continued as a 501(c)(3) charitable organization on the basis of its numerous gifts to the community. Foremostamong these gifts was nearly $300 million annually in charitable care to patients unable to pay.

Community Benefit Department Thevision of Intermountain's Community Benefit Department was to improve health- carefor low-income families and individuals in the community. Staff members worked with community nonprofit agencies, government entities, and healthcare providers to find waysto improve the delivery of healthcare received by uninsured, low-income patients. Partnerships,school and community clinics, collaborations, donations, and other gifts to the community made up the Community Benefit Department's wide array ofprojectsand initiatives.

As a not-for-profit healthcare system, Intermountain annually reported its com- munity benefits to the counties in which Intermountain facilities were located. Inter- mountain's Community Benefit Department helped with this reporting and also worked toimprove healthcare for low-income families and individuals. Over time, improvements weremade in such areas asaccess, delivery, funding, and the establishment of clinics.

STRATEGIC PARTNERSHIPS THAT MADE A DIFFERENCE

Overtheyears, Intermountain Healthcare collaborated with key organizations to bring the bestof their worlds together for the benefit of the patients it served.

Huntsman-Intermountain Intermountain Healthcare and Huntsman Cancer Institute at the University of Uah joined forces to give patients the best chance of winning the fight against cancer. Conse- quently, at most Intermountain hospitals, patients hadaccessto Huntsman's outstanding researchand Intermountain's renowned best-practice methods and patient care.

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170 He althcare Marketing: A Case Study Approachv

GE Healthcare

Intermountain partnered with GE Healthcare to create a new clinical informa: basedon thelatestresearchaboutmedicalbestpractices.TheEnterpriseClinical I nforma-tion Systemwasdesigned to transform the world of healthcare delivery. FINANCING EXTRAORDINARY CARE

Caring about people required Intermountain to be caretul about money. Intermo- Healthcare'smission of providing high-quality care at an affordable cost guided comr leaders in making important financial decisions. Intermountain provided charitycare other community benefitsbecauseitwas financially strong and prudently managed.Ar th. same time, the company strived to keep its charges affordable.

ountain

and

BILLING AND COLLECTIONS ISSUES

Intermountain believed that no one should go without needed carebecausehelshefeared the cost. In addition to providing high-quality care at affordable rates, Intermountain

offered charitable assistanceprograms and billing policies that helped patients focuson getting well rather than worrying about how they would pay for care.

Charitycarepolicy Through theyears, Intermountain ofered financial assistanceon a sliding scale to families and individuals with incomes up to 500 percent of the federal poverty level.

Low interestrate. ForpatientsSwho needed to make payments on their bill, Intermountain's interest ratewas significantly lower than typical rates for unsecured loans. Patients with a demonstrated financial need could set up a zero-interestpayment plan.Patients willing and able to have their monthly payments automatically debited from their accounts qualified for areduced interest rate.

Uninsureddiscounts.Uninsured hospital patients who did not quality for otherassistanceprograms(e.g., Medicaid, CHIP) receivedan automaticZ percent discount on their bills. These patients also received an additional 1>

25

ercent off their bills if full paymentwasmadebeforeservicewasproviaeo (foratotaldiscountof 40percent)or an additional5 percentoff their biIS1 full paymentwasmade within 30daysafterservicewas provided (tor aodiscount of30percent).

ed

if total

Collectionspractices.Intermountain did not use the courts to collect anu medical bill unlesstherewasevidence of fraud. unpaid

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V: Strategic Actions of the Healthcare Marketer

pubicizedassistancepolicy Over theyears, Intermountain informed

P 171

W patieoients and the community through a variety ofmeansthat charitable Caancialassistancewas available, including signs, brochures, and counselors in facilities; information about charity care on billing statements; information ahout charitableassistanceon the outside of billing envelopes;the Inrermountain website; and information in Intermountain publications.

BUILDING NEW FACILITIES nnt-for-profit healthcaresystem, Intermountain returned all money it earned to the

Asommunity in the form of improved facilities, improvedservices,and lowercharges. In Iorermountain'sfirst 20years, it invested more than $1 billion in replacingand upgrading isfacilities. It was anticipated that Intermountain would spendapproximately $2.3 bil- lionon capital improvements to this ambitious construction program berween 2011 and 2016,all while keepingchargeslow. Intermountain Healthcare did not build new facilities roexpand its presence. New facilities were intended to help the organization keep pace with the growing population and changing community needs and to serve underserved

populations.

AWARDS AND RECOGNITIONS Overmuch of the pastdecade, Intermountain was rated by IMS Health (a company that provided technology-based analytics and services for the global health community) as the numberone integrated healthcare delivery system in the United States(or among the top

four). US health policy experts and political leaders from across the political spectrum, includingPresident Barack Obama and former Speaker of the House Newt Gingrich, singledout Intermountain asa model healthcare organization. Other notable recognitions

weremade by the following organizations:

The College of Healthcare Information ManagementExecutivesand the American Hospital Association recognized Intermountain Healthcare for its leadership in information technology. The awardalsorecognized Intermountain'sextensiveuse ofdata mining-integrated withdecision support in clinical information systems-to directly improvepatient

outcomes. Ihe Gallup Organization chose Intermountain Healthcareasone of 27 companies worldwide to earn the Gallup GreatWorkplaceAward for 2012. Ihe awardrecognizedtheseexcellentcompanies for their extraordinary ability

to createan engaging workplace culture.

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172

Healthcare Ma rketing: A Case Study Approach

TheannualMostWiredsurveysponsoredbyHospitals&Healeh Ne.

journaloftheAmericanHospitalAssociation,namedlntermountain thenation'smosttechnologicallysavvyhospitalsystemsin 12 of the12

the surveywasconducted.

the

years

Gartner, Inc., aConnecticut-based information technology researchand consultinggroup,rankedIntermountain's Supply Chain Organizario

thebest in the nation.

Organization among

•

REGIONAL PERFORMANCE As one of theleadinghealthcareproviders in the Intermountain region, Intermounr Healthcarecontributed to theregion'sperformance by providing high-quality, affordabl.

healthcare (Intermountain Healthcare 2012):

untain

Utahwaslowestin the nation in termsof healthcare costs (Centers for

Medicare & MedicaidServices,1991-2009 data).

Utahwasbestin the nation in terms of "avoidable hospital use and costs"

(Commonwealth Fund, 2009 scorecard).

Uahwaslowestin thenation in termsof infant mortality (Commonwealth

Fund, 2009 scorecard).

Utahwassecondlowestin the nation in terms of "mortality amenable to

•

healthcare (Commonwealth Fund, 2009 scorecard).

Threemetropolitanareasin Utah--Ogden, Salt Lake, and Provo-were in thelowest fourth percentile in the United States in terms of healthcarecosts

(Thomson Reuters, 2009 data).

SUMMARY

Importantlessonsaddressingkeydimensions of strategic healthcare marketing are brought to light byunderstandingand refecting on the story of Intermountain Healthcare. Among theselessonsarethe importance of mission, vision, and values in setting strategic direction

andestablishingorganizationalculture; effectively communicating an organizations opmentandimprovement initiatives; identifying and relating to patient, physician, payet, andcommunitystakeholders;developingstrategic partnerships; and linking hnancauIgoas

organizations devel-

and plans to an organization's mission, vision, and values.

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Part IV: Strategic Actions of the He althcare Marketer 173

DISCUSSION QUESTIONS

DescribeIntermountain Healthcare's attitude toward the individual patient..1. In what ways did Intermountain engage the public at large?

2. Describe Intermountain's approach to engaging the physician community. A Howdid Intermountain relate to the insurance community? 5. Describe two or more of Intermountain's strategic alliances. How could these

partnerships be marketed for maximum impact? Howmight you describe Intermountain's approach to leadership and teamwork? Howdid Intermountain link its financial goals to its organization-wide mission?7:

8. In what ways did Intermountain use market and other research to fulfill its mission? 9. Whatwere Intermountain's most important strategic advantages? How would you

marketthese advantages to advance the organization's mission?

REFERENCES

Intermountain Healthcare. 2013a. Engaging All of Us in Healthcare: Intermountain Healthcare Annual Report 2012. http:|/intermountainhealthcare.org/about/overview lannual-report-2012/Pages/home.html.

2013b. "Mission, Vision, Values." http://intermountainhealthcare.org/about /overview/Pages/mission.aspx.

mountain HealthcareAnnualReport2011. http://intermountainhealthcare

.org/about/overview/annualreport2011/Pages/home.html.

o11. Code of Ethics. Created February 23; modified August 31. http://intermount ainhealthcare.orglabout/overview/Documents/IntermountainCodeOfEthics.pdf.

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