Healthcare reform continues to make strange bedfellows among providers from across the care delivery spectrum as they brace for new demands in an era of lower reimbursements.
The Cleveland Clinic and investor-owned Community Health Systems this week announced that they are forming a "strategic alliance" to reduce costs through operational efficiencies and improved care in both health systems.
"Years ago you would not see a non-profit academic medical center and a for-profit health system come together. It's a sign of how the times are changing in healthcare," says Eileen Sheil, executive director of corporate communications for the Cleveland Clinic. "We both bring unique strengths to the relationship. They are experts in hospital operations and efficiencies and Cleveland Clinic brings tertiary care services and clinical excellence."
Under the deal both systems will remain independent, but will form joint advisory groups to consider improvement in areas such as clinical services, physician alignment, and integration, supply chain processes and other hospital operations.
"Much of the long-term pieces have yet to be determined, but we are going to start with looking at some selected CHS affiliated hospitals and work with them on the cardiac program and the quality alliance for quality metrics in their hospitals," Sheil says. "We get their expertise in hospital operations and how to run very efficient hospitals. That is something we will greatly benefit from."
Franklin, TN-based CHS is one of the nation's largest for-profit hospital companies. It leases or operates 135 hospitals in 29 states, with an aggregate of nearly 20,000 beds.
"It definitely broadens the Cleveland Clinic's reach nationally, which we haven't had before," Sheil says. "But at this point we aren't talking about putting our name on their hospitals whatsoever. It's trying to figure out how can we best work together to really drive quality in the hospitals and drive down the cost. That is what we are expected to do given healthcare reform and how we have to change the way healthcare is delivered going forward."
Adam Powell, a healthcare economist and president of Payer + Provider Syndicate, a Boston-based consulting firm, says the strategic alliance provides clear benefits to both systems.
"Cleveland Clinic maintains state-of-the-art facilities that are constrained to a few geographic areas, while Community Health Systems runs a large, multi-state network of general acute care hospitals in mid-size markets. The alliance provides Community Health Systems with access to both the processes and brand of Cleveland Clinic, while providing Cleveland Clinic with access to a wider referral base," Powell said in an email exchange.
Powell says Cleveland Clinic will help CHS capture data in a standardized format that can more easily be analyzed. "While it has not been stated explicitly, it is likely that that format will be highly-compatible with the one utilized by Cleveland Clinic so that information can be shared more easily," he says, adding that the two systems will also collaborate on process and infrastructure improvements for cardiovascular services.
In addition, Powell says the alliance likely will promote other collaborations, such as the remote delivery of care through telemedicine, second opinion services, and complex care coordination.
"Given the reputations of the two institutions, it is likely that Cleveland Clinic will be the primary provider of the services and that patients in CHS facilities will be the primary recipients," he says. "Thus, Cleveland Clinic wins by providing care for more patients, while CHS wins by obtaining access to better processes and an association with the Cleveland Clinic brand."
At this point, Sheil says the specifics of how the alliance will work are still unfolding.
"This is really about focusing on improving quality of care and reducing costs," she says. "What makes this kind of a different relationship is we are figuring it out as we go along. There are going to be lots of exciting opportunities. Both sides are very committed and bring different strengths to the table."
John Commins is the news editor for HealthLeaders.