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New Systems of Care Rely on Alignment, Coordination

Jim Molpus, for HealthLeaders Media, July 13, 2010
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Geisinger Health System, tucked away in Danville, PA, was already well-known for its ability to innovate in the quality and cost of healthcare before President Barack Obama thrust the health system into the spotlight as a model for care systems.

"We have to ask why places like the Geisinger Health System in rural Pennsylvania ... can offer high-quality care at costs well below average, but other places in America can't," Obama said in an address in 2009.

The question is whether the systems in place at Geisinger—an integrated model health system with employed physicians and a health plan—could create programs that may be transferred to other health systems that lack Geisinger's structural qualities. The questions of alignment and coordination of systems formed the discussion for the HealthLeaders Media Rounds event "Seamless Systems of Care: Better Alignment, Coordination, and Outcomes" held June 2 at Geisinger, and featuring leaders from Geisinger, Gundersen Lutheran Health System in La Crosse, WI, and The Nebraska Medical Center and Methodist Health System in Omaha, NE.

The massive expansion of coverage that came out of healthcare reform will require systems to deliver better value. Glenn D. Steele, Jr., MD, PhD, president and CEO of Geisinger Health System, whose name was mentioned in the national media as a possible candidate for the administrator of the Centers for Medicaid & Medicare Services, is optimistic that the government will pull the right levers.

"The people at CMS understand they have been given a huge new task. Of course there are a lot of complaints that what we have really done is expand our insurance capability to 32 million new people, but what has also been done is to free up a significant amount of money and discretionary capability within CMS to do innovation. That is a big deal," Steele said. Without fundamental change in care delivery, simply expanding the number of insured will mean "hell to pay in a very short period of time. The demand will go sky high. The cost will go beyond anything that has been modeled."

For hospitals and health systems that do not have the IDS-like entities that Geisinger and Gundersen Lutheran do, Steele says they still must find ways to manage parts of their patient population. Steele points out that even with its own health plan, 70% of its business comes from outside payers.

"For that 70% we are getting paid the old-fashioned piece-rate way. It is really only that 30% where we are providing care for patients and insuring them that we commit to our innovation book of business. I think a lot of folks out there are going to have to figure out how to incrementally move toward population-based care, toward a fundamental realignment of out-of-the-hospital care, at the same time they continue to run their operations largely on piece-rate reimbursement."

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