Hospital Consolidation Gets a New Playbook
Population health and long-term contracts
Most hospitals and health systems haven't had the head start on managing populations that at Montefiore was essential to its continued existence, but that doesn't mean they can't catch up with something similar, as most healthcare organizations will need to adapt to the increased accountability.
There are other blueprints toward managing population health, though many are in their infancy. Texas Health Resources' CEO Douglas Hawthorne, FACHE, recognizes that, and as a longtime veteran of the healthcare industry, he wants to lead the transition, partially through innovative structural deal-making that broadens the Dallas/Fort Worth Metroplex–based health system's business footprint. Part of that transition includes being able to manage the health of populations. He thinks Texas Health will achieve that goal at least in part through a contract, not an acquisition. He says even very large organizations must bet their future, at least in part, on the performance of partners who can aid in achieving quality and cost-of-care targets. In Texas Health's case, that contract is with Healthways, a disease management company that seeks such big, geographically exclusive partnerships as its main growth strategy.
"Most of what we've done in our existence is diagnose and treat those who appear at our doorstep, and we've done a good job at that," Hawthorne says. "As we evaluate that population, we might admit the same patient for the same reason multiple times, so we're seeing a revolving door from acute stage to chronic stage."
However, future reimbursement, and thus, the margin case for his business, rests on the premise of providing accountable care essentially from birth to end of life. The 10-year contract, terms for which are undisclosed, and the value of which can vary greatly depending on the achievement of performance targets for Healthways, focuses on prevention and patient and family involvement in a patient's care. Practically, that means that Healthways will provide the following services to Texas Health-affiliated physicians:
- Analytical tools that identify at-risk patients to create individual personalized plans
- Smoking cessation, coaching, and weight-loss programs
- Cell phone reminders encouraging healthy behaviors
- Prescription refill tracking and intervention
- Emergency room admissions data and follow-up needs to reduce readmission rates
Those interventions might sound simple and practical, but perhaps not revolutionary. The practical truth is, however, that given the astronomical cost of an inpatient admission, preventing one can pay off substantially. But doesn't that mean, at least in many cases, that Texas Health will be preventing itself from much-needed revenue that admissions bring?
As if anticipating the question, Hawthorne, who has invested in a health system merger and large physician group practice acquisition as well as an organic build-out of ambulatory care locations during his tenure, admits the twitchy nature of the conversion in payment methodologies, as payers, including the government, haltingly make changes to the way they pay for care.
"We're working against traditional models, and as we transition, we want someone who's aligned with us through the long term," he says. But best utilizing the evidence-based information and data capability that Healthways brings to the equation won't happen overnight, he concedes.
"That's why transforming communities will take more work than adding a new service to the hospital."
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