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Utilizing Clinical Integration to Foster Successful Hospital Operations Improvement

Frank G. Flosman, MBA, Bonnie Barndt-Maglio, RN, PhD, and Patricia A. Hines, RN, PhD, for HealthLeaders Media, October 29, 2009

In order to successfully prepare for the challenges of impending healthcare reform and address the effects of the extended economic downturn, many hospitals and health systems need to not only improve their operating performance, but also should consider doing so within the context of enhancing clinical integration, service and process coordination, and aligning resource utilization across the care continuum. While considerable uncertainty still exists surrounding the details of healthcare reform, certain consequences of reform are likely that hospitals will need to address.

Most reform proposals being discussed will result in significant reductions in reimbursement per case and an increase in service demand. These proposals will likely lead to further requirements to reduce costs, manage resources, and coordinate services. The table below summarizes the operational components that will require increased attention given the potential results of healthcare reform. Responding successfully to these effects of healthcare reform may well require a new approach to improving hospital operations.

View a chart outlining the potential results of healthcare reform.

Pressures to better manage costs and more effectively manage resources will most likely continue unabated. Achieving necessary improvements will require gaining efficiencies across the care delivery spectrum. Hospitals will need to develop new approaches to operational processes, structures, and service integration in order to thrive in an environment that requires them to "do more with less" in other words, survive on reimbursements resembling current Medicare rates. Operational improvement initiatives will need to incorporate elements such as clinical integration—that is, the coordination of services, information, and resources across a care continuum. Other elements that need to be included are provider relationship enhancement, fundamental process redesign (including coordination across service delivery components), new accountability and management structures and methods, and revised approaches to utilization of limited resources.

The inclusion of CI components into redesign efforts will be critical to improving operations going forward for a number of reasons:

1. Proposed healthcare reform scenarios include requirements to improve the manner in which clinical care is organized, delivered, and reimbursed across inpatient, outpatient, and ancillary service providers. Hospitals and health systems will need to provide new service models while receiving less revenue per unit.

2. Service performance, quality, and outcomes will increasingly be measured and even rewarded based on a growing standardized set of recognized metrics.

3.Cost pressures in the recent past have led many hospitals and health systems to achieve significant cost improvements in operational areas within their facilities. Additional efficiencies will be derived from improving integration and service utilization across the service delivery system and managing the resultant costs across these components.

4. Increases in the number of individuals with healthcare coverage will lead to amplified service demands (especially from currently decreased levels). This in turn will lead to a number of ripple effects:

  • Demand increases may occur in service lines or among payer types that do not represent optimal reimbursement levels or rates. If revenue per unit of service decreases, hospitals will need to reduce costs per unit as well.
  • Current clinical staffing shortages are not likely to be ameliorated in the near future. Healthcare providers will need to develop new approaches and tools to align limited resources with increased demand.
  • If patients cannot readily access their physician, perhaps due to potential capacity issues in physician's offices, such as was exhibited in Massachusetts, they will likely seek primary care services through a hospital's emergency department. This will exacerbate already over-crowded EDs and cause a cascade of heightened throughput issues throughout a variety of hospital functions—from ancillary areas to hotel services to patient care units. Hospitals should proactively work with referral sources to design a coordinated service continuum that considers care management, process alignment, resource utilization, information gathering and dissemination, as well as capacity management. Regardless of ED capacity issues, improved levels of care coordination and resource alignment and management will be critical for effectively addressing increased service and performance requirements.

5. Hospitals and health systems will need to consider CI requirements when improving service and resource efficiency so that related process, utilization, and organizational enhancements both improve costs and facilitate increased service coordination.

6. In order to realize operational efficiencies that factor in CI components, hospitals and health systems will be required to review their role in the care delivery system and create new models for relationships with providers across the service spectrum.

In order to ensure that CI is sufficiently considered and utilized when conducting an operations enhancement initiative, such efforts should include an evaluation of the level of utilization of key CI components:

  • Clinical data systems, warehouses, portals, and information availability/dissemination
  • Care coordination training/education for staff and key other providers
  • Resource management tools
  • Care and disease management coordination across service components
  • Best practice-based data (including quality indicators and core measures) used to evaluate/monitor/manage performance, identify improvement opportunities, and develop goals
  • Use of evidence-based medicine protocols
  • Alignment of financial information, incentives, and risks across care components
  • Clinical integration leadership and support structures
  • Utilization data including capacity, length-of-stay, bed turns, etc.
  • Cost and revenue per volume metric
  • Identification of improvements required to enhance clinical integration capabilities. These include:
    • Resources required to achieve improvements
    • Impacts of CI enhancements including cost/benefit
    • Intra-area and cross-functional components
    • Accountability and management structures

Once operational improvement opportunities have been identified, specific enhancements should be planned and implemented with CI in mind so that maximum efficiencies and service advancements can be realized. Feedback from providers and other stakeholders should be used to develop and institute detailed improvement plans which consider:

1. Creation of cross-functional processes that include CI components (e.g., capacity management, communication, critical paths, etc.)

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