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How Hospitals Are Reinventing Themselves

Philip Betbeze, for HealthLeaders Media, June 6, 2014

Cutting services?

Among other things, it will mean that Memorial Hermann will likely have to consolidate tertiary services. So, for example, hypothetically speaking, rather than having five or six cardio programs spread among 12 hospitals, it may eventually consolidate to two or three. The same consolidation would apply to other specialist services like neonatal intensive care units, he says.

"Inpatient volumes may shrink, but the notion of consolidating them to a smaller number of centers with high volumes will maintain patient safety," he says. Where Alexander sees extraordinary growth will be in home health, and Memorial Hermann is well-positioned there. The organization is the current market leader in home health, but it controls only 4% of the 750-agency Houston market, which, like the home health industry in general, is very fragmented.

"Home health will be transformed more than anything over the next 10 years; we'll see dramatic M&A and venture capital will flood that space," he says, predicting rapid consolidation.

Home health is poised for growth because the best and often cheapest place to take care of chronic care patients is in the home, with telephonic case management technologies and iPad devices helping coordinate care, for a couple examples.

"The best place to care for people with chronic diseases—such as the obese, diabetic, or kidney patient—is at home," Alexander says.

Haupert agrees that hospitals and health systems will have to think about consolidating or even eliminating money-losing services.

"If the reimbursement is not there, hospitals will limit services to those that happen to be profitable. We had a discussion here in facing some governmental funding cuts that if they happened, we might cut mental health," he says. "It's a big cost and the reimbursement doesn't work. Ultimately, the cuts didn't come, and we were able to maintain a much needed service for the community."

As for care coordination, Grady isn't investing in coordination of care directly, but more often through partnerships.

"We've spent a lot of time building relationships with FQHCs to develop what we're calling a safety-net collaborative for care," he says, adding that Grady's care coordination model is built to cross traditional "silos" to help break them down and ensure that clinical staff understands that the responsibility to the patient's well-being doesn't end when he or she leaves a particular unit, or even when that patient may obtain healthcare outside Grady's system."

That model will manage the patients wherever they are within any modality of care. Grady is moving subspecialists into its outpatient clinics so that it becomes less likely such patients will require acute specialty care in the hospital. It's the beginning of engineering value-based healthcare and managing the health of populations.

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