QUIZ 2: UTILIZATION MANAGEMENT: AN EVOLVING APPROACH TO MANAGING CARE
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READING.4.G.COORDINATIONOFCAREANDINTEGRATEDDELIVERYSYSTEMS.ACOS-1.pptxPOWERPOINT 9 – KEY POINTS MANAGED HEALTH CARE THE RISE OF INTEGRATED HEALTH CARE DELIVERY SYSTEMS
HSA.312.A04 AND A05 SPRING 2021 CLASS
LARRY EITEL – ADJUNCT LECTURER
INTEGRATED DELIVERY SYSTEMS: 1
INTEGRATED DELIVERY SYSTEMS:
A group of legally affiliated organizations in which hospitals and physicians combine their assets, efforts, risks and rewards, and through which they deliver comprehensive health care services to the community.
The affiliated entities perform all strategic planning and payer contracting for the provider, and allocate economic rewards and capital among the various stakeholders.
✓ Parties typically focus on unified governance, the use of consolidated management and clinical systems, and the implementation of consolidated budgets for the entire system.
✓ Economic interests are unified and participants do not maintain separate economic businesses that potentially compete with each other.
✓ Physicians may be employed by the IDS or serve as independent contractors. Consolidated capital and operating budgets are prepared. Since 2004-2005, Physician employment by IDS and the purchase of Physician Practices by IDS have increased substantially.
INTEGRATED DELIVERY SYSTEMS: 2
HealthCare Systems/Alliances and Health Care Organizations: Functions of Integrated Delivery Systems in Health Care.
A health care organization (HCO) is a single health care institution. A healthcare system (HS) or alliance, also know as an Integrated Delivery System, is a group of two or more institutions which have associated themselves, either through cooptation, ownership, contractual obligation, or a looser bond, to achieve a broad or narrow range of institutional goals objectives.
Horizontal and Vertical Alliances or Integrated Delivery Systems: THEY MAY BE LED BY PHYSICIANS, HOSPITALS, OR BOTH.
Horizontally integrated health systems are formal or informal alliances among institutions that are essentially the same (hospitals, skilled nursing facilities, home health agencies).
Vertically integrated health systems are formal or informal alliances among a variety of different institutions which provide different services (there may be some overlap), but which see an advantage in banding together. A simple vertically integrated system might include a hospital, a home health agency, a surgi-center (free-standing), a skilled nursing facility, and a physician group practice.
INTEGRATED DELIVERY SYSTEMS: 3
Why are health care systems and alliances formed? Reasons for forming a strategic alliance/IDS include the following: productivity improvement, cost reduction, revenue enhancement, improved competitive position, reduction in transaction costs, implementation of continuous quality improvement programs, clinical integration of services and other organizational learning programs.
Productivity improvement: The consolidation of services (as discussed below under Cost Reduction) may also result in higher productivity (e.g. more visits per day received and treated by a particularly clinic) among the staff of one or more of the institutions in a system or alliance.
Cost reduction: For instance, by integrating administrative services, support services (for instance consolidating multiple laboratories operating in different institutions into one laboratory with one staff), or other services, overhead costs per unit of service (patient day, outpatient visit) might be reduced. Horizontally integrated systems may reduce their per unit service costs for various supplies and pharmaceuticals by being able to purchase in bulk.
Revenue enhancement: A health care system might be able to get better rates of reimbursement for its constituent institutions from an HMO than would the individual components acting alone. Also, depending on the concentration of purchasers of health care in an area (e.g. how many or few health plans or HMOs provide coverage to all the people living in an area), and the number of health care providers in an area, a health care system may increase the number of contracts its individual components have with health care plans, PPOs, HMOs, etc. Increasing the number of potential customers the institutions could then expect to treat would increase revenue.
INTEGRATED DELIVERY SYSTEMS: 3 CONTINUED
Why are health care systems and alliances formed? Reasons for forming a strategic alliance/IDS include the following: productivity improvement, cost reduction, revenue enhancement, improved competitive position, reduction in transaction costs, implementation of continuous quality improvement programs, clinical integration of services and other organizational learning programs.
Reduction in transaction costs: A transaction cost is the cost of managing a relationship between two informally related or contractually related health care organizations. In the context of a health care system, it is the cost of coordinating different levels of service between two types of health organizations, such as a hospital and a nursing home. For instance, by forming a vertically integrated health system in which a hospital is closely linked to a Skilled Nursing Facility or a Home Health Agency, a hospital might make it easier and less costly to ensure that its inpatients who were ready for discharge could be discharged to those alternative treatment settings and services.
Implementation of continuous quality improvement and organizational learning programs: Institutions may want to coordinate Quality Improvement and other organizational learning and improvement programs through specially coordinated efforts which would be too costly for individual institutions.
Clinical integration of services: All institutions may offer some of the same clinical services (e.g. cancer care services), but may also have special strengths in other services. Through an alliance institutions may set up special referral relationships, ensuring that maximum use is made of their respective centers of excellence. At the same, areas of duplication may be reduced, so that underutilization of duplicate services is reduced or ended.
INTEGRATED DELIVERY SYSTEMS: 4
Ownership and Control:
Ownership is not always necessary for the effective control of a system or alliance. If one of the key institutions within an alliance has a great deal of market power (e.g. the majority of people in the community use a hospital’s outpatient clinics for their ongoing outpatient care, and use the hospital for the bulk of their inpatient care), it can have an exceptional degree of influence on and control over the actions and direction of even a loose alliance of which it is a member.
On the other hand control may be effective without formal ownership. Community circumstances, the goals, objectives and needs of the various institutions in an alliance, and the relative market power of individual institutions within an alliance all impact on effective rather than formal control. In our class discussion we used the example, not in health care, of McDonald’s control of product quality in the individual McDonalds food stores throughout the country.
The Henry Ford Health System in Michigan is an example of a complex vertically integrated health system.
A local example of a vertically integrated system is the New York City Health Plus Hospitals system, in 4 boroughs, which includes eleven hospitals, several neighborhood based Diagnostic and Treatment centers, physician groups, academic affiliations with major Academic Medical Centers, rehabilitation facilities, home health agencies, and other components.
The following Vertically Integrated Delivery Systems currently dominate health care services delivery in the five boroughs of New York City:
Montefiore Health System.
Mt. Sinai Health System.
NYPHS – New York Presbyterian Health System.
Northwell Health System.
NYU Langone Health System.
New York City Health Plus Hospitals System.
POSITIVE ROLE OF A VERTICALLY INTEGRATED DELIVERY SYSTEM - 1
Six Attributes of an Ideal Health Care Delivery System – Movement toward Tighter Internal Integration and Coordination:
Information Continuity: Patients’ clinically relevant information is available to all providers at the point of care and to patients through electronic health record (EHR) systems.
Care Coordination and Transitions: Patient care is coordinated among multiple providers, and transitions across care settings are actively managed.
System Accountability: There is clear accountability for the total care of patients. (We have grouped this attribute with care coordination, since one supports the other.)
Peer Review and Teamwork for High-Value Care: Providers (including nurses and other members of care teams) both within and across settings have accountability to each other, review each other’s work, and collaborate to reliably deliver high-quality, high-value care.
Continuous Innovation: The system is continuously innovating and learning in order to improve the quality, value, and patients’ experiences of health care delivery.
Easy Access to Appropriate Care: Patients have easy access to appropriate care and information at all hours, there are multiple points of entry to the system, and providers are culturally competent and responsive to patients’ needs.
POSITIVE ROLE OF A VERTICALLY INTEGRATED DELIVERY SYSTEM - 2
RESPONSIBILITIES OF A VERTICALLY INTEGRATED DELIVERY SYSTEM (FOR EXAMPLE, AN ACCOUNTABLE CARE ORGANIZATION OR ACO) FOR THE SUCCESSFUL FUNCTIONING OF A PATIENT-CENTERED MEDICAL HOME:
Support implementation of more robust and persistent systems for finding clinical best practices and assuring that these benchmark clinical models, rather than historically protected or habitual and idiosyncratic practices, become organizational standards.
Support better use of information technology to improve access to information and to support clinical decision making. Microsystems, without organizational support, lack the capacity to implement and use ideal information technologies.
Implement a deep and well-supported Human Resources development strategy to improve workforce knowledge and skills.
Support more consistent development of effective teams and teamwork.
Implement policies, procedures, and support systems to improve coordination of care among services and settings, both within and among organizations, especially with respect to the care of people with chronic illnesses.
Implement systems supporting and producing sophisticated, extensive, and informative measurement of performance and outcomes.
POSITIVE ROLE OF AN INTEGRATED DELIVERY SYSTEM – 3 - EXAMPLE - PATIENT-CENTERED MEDICAL HOMES EMBEDDED IN ACCOUNTABLE CARE ORGANIZATIONS (ACOs)
SEE READINGS 4.D., 4.E. AND 4.F.
Patient-Centered Medical Home (PCMH):It is an enhanced primary care delivery model that strives to achieve better access, coordination of care, prevention, quality, and safety within the primary care practice, and to create a strong partnership between the patient and primary care physician.
In the model, payers often reward providers with a per member per month “bonus” for improving primary care services for each patient in the medical home. Like accountable care organizations, the medical home model is referenced many times in current health reform efforts as one way to improve health outcomes through care coordination.
POSITIVE ROLE OF AN INTEGRATED DELIVERY SYSTEM – 3 - EXAMPLE - PATIENT-CENTERED MEDICAL HOMES EMBEDDED IN ACCOUNTABLE CARE ORGANIZATIONS (ACOs) - CONTINUED
ACOs ARE A TYPE OF VERTICALLY INTEGRATED DELIVERY SYSTEM
An Accountable Care Organization (ACO) is based on a strong primary care core. But ACOs are comprised of many “medical homes”—in other words, many primary care providers and/or practices that work together. Some have even dubbed ACOs the “medical neighborhood.” (EXAMPLE: MONTEFIORE ACO).
ACOs are accountable for the cost and quality of care both within and outside of the primary care relationship. As such, ACOs must include specialists and hospitals in order to be able to control costs and improve health outcomes across the entire care continuum. ACOs by nature would be larger than a single medical home or physician’s office.
There are many known benefits of the ACO structure over the medical home model, including the ability to better manage the total care for a greater population of people with a larger budget.
Being able to use the dollars across a wider range of patients and conditions allows for better overall cost management, less variation within the population, and the ability to track and trend for quality.
