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An Evolutionary Tip for Healthcare Systems: Adapt or Die

 |  By Philip Betbeze  
   August 22, 2014

The future belongs to the nimble, the innovative and, perhaps most important, the efficient, says the CEO of the Providence-Swedish Health Alliance.

Change in healthcare may come glacially, but when it does come, the principles of biology, evolution, and natural selection offer a good analogy for what will happen in healthcare: only those who take chances will survive, one CEO says.


Joe Gifford, MD

As leader of the ACO formed by Providence Health & Services - Washington and Swedish Health System, Joe Gifford, MD, is on the forefront of an as-yet uncertain era for health systems, payers, and physicians. All three groups are under the gun to increase value by decreasing waste and overutilization and to right-size their infrastructure and cost structure.

An ACO created at least partially to work directly with employers, such as initial participant Boeing, the Alliance provides an ACO structure to two health systems that combined in 2012. Swedish became a division of Providence Health & Services, but they maintained their distinct identities, as Swedish is predominant in the greater Seattle area, while Providence is much larger regionally.

"This is no longer about creating high-margin institutional services, it's about serving populations efficiently for greater value," says Gifford. "That's a challenge for everyone's financials."

Surviving the fallout from such a transformation does involve risk, but it doesn't mean being rash. It means not being afraid to seek out new relationships and new partnerships to help solve the problem of high costs and poor outcomes locally.

So while part of the Alliance's reason for being is to cover both health systems' entire market geographically and expand the reach of both, it's also meant to serve broader communities with the same infrastructure.



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If such a system has infrastructure that can provide 1,000 surgeries for a county over a given period of time, and that's being reduced, for example, because of efforts to reduce overutilization, Gifford's idea is to serve two counties with the same infrastructure. And making care convenient such that patients from such employers stay in network for their care is critical to managing the cost of that care, he says.

"Growing at primary care level is an important part of the strategy," he says. "On the other side of that, we do have within Providence and Swedish, some top-of-the-line, world-class subspecialists in some really specialized niches like neuro and cardio and others, and super-high quality services along those lines, which makes up a pretty nice portfolio."

On the surface, the Providence-Swedish Alliance is an ACO. But in reality, it's much more than that. It's a way to guarantee healthcare access for large employers such as Boeing, and to be able to better control and influence patient outcomes, another key, because the ACO structure provides incentives for reaching certain care targets and meeting benchmarks for care.

That can be better accomplished in a system that despite the different surface names of the facilities, is consistent, with the same electronic medical record system, clinical performance metrics, and back office functions.

Gifford believes healthcare is in an evolutionary stage right now that will leave some behind, while the Alliance shows the adaptability of Providence and Swedish. Growth in volume won't ensure hospital or even system longevity any longer. In the future, embracing the interconnections between care pathways and organizations that had been insular and protective will separate organizations that will thrive and those that will not.


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"We are all interconnected in complex ways we never maybe have seen before," he says. "Healthcare represents a really complex ecosystem, and we have to talk to all [potential partners] and keep our minds open about connections and partnerships that will add value going forward."

So is taking a bigger piece of a shrinking pie the avenue for success? Partly, but it can't all be about survival of the fittest. Gifford maintains that success will be measured by how well healthcare entities and their partners service the customer—the patient, if you will.

Tactically, the combination of so many sites of care and avenues for patients to touch the interconnected health system provides a measure of safety as well as a template for adaptation. No longer will a change in care protocols mean one site of care will implement them and others will ignore them because they are not part of an integrated organization. He equates the changes coming in healthcare to a biological extinction event.

"When the climate changes or the meteorite hits, those who are most adaptable will survive—those who have not put all their chips on one bet," he says.

"You have to be willing to talk to all potential partners and find out how to add value. Even pharma and device companies, for example. How can we mutually serve the customer? No matter what, you're servicing a customer. You should always put yourself in their shoes. That's a great North Star for anyone moving into this world."

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Philip Betbeze is the senior leadership editor at HealthLeaders.

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