This article appears in the June 2012 issue of HealthLeaders magazine.
Initiating collaborative relationships is the key to improved quality, most healthcare leaders say. Many also agree that major increases in HIT spending are necessary, but others are more cautious about spending for technology improvements. And more than two-thirds see transparency as improving quality of care, while a sizeable minority has reservations about it, according to the 2012 HealthLeaders Media Economics of Better Care Survey.
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Teamwork is an emerging focus, with nearly three-quarters (72%) entering collaborative care relationships, while 28% say they are not. At the same time, healthcare leaders are reluctant to engage in shared savings programs as a risk-sharing cost-reduction tactic: 63% say they have no plans for such programs, which are a foundation of the evolving accountable care organization models.
Michelle Mahan, CFO of the 309-licensed-and-staffed-bed Frederick (Md.) Regional Health System, says the survey shows that health systems are moving slowly into the collaborative models, especially in light of their expressed concerns over shared savings and cautiousness over transparency.
"There's better coordination of care that is taking place, but we're at the starting point; it's definitely in its infancy," Mahan says. "The healthcare continuum lacks alignment; however, it is moving in the right direction with certain new incentives, such as reducing readmissions. People are still getting too sick and going back to the hospital. We need to do a better job of preventive care, with patient-centered medical homes, for instance. On the whole issue of care coordination, no question, we can do better."
The survey shows that 48% of healthcare systems anticipate a major increase in HIT spending over the next two years, but 34% describe their approach to HIT spending as an operations investment, and 24% see it as a cost of doing business; only 23% see it as a clinical investment. In describing the ROI associated with HIT spending, 42% expect net cost to decrease over time, but 31% anticipate it would increase.
Improving IT systems is absolutely the cost of doing business, says Ray Chicoine, COO of Monarch HealthCare, in Irvine, Calif., a health system that includes 2,300 physicians who contract with 18 hospitals in Southern California. "You have to have a robust infrastructure, from A to Z. None of it fits easily and none of it is cheap," Chicoine says. "I think you can't escape that fact. To be an effective, integrated delivery model, you will have to spend more on technology, and that cost will continue to grow."
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While 69% of healthcare leaders say greater transparency in healthcare will increase the quality of care, 35% say it would increase the cost of providing care.
The reason it's difficult is that so many health systems only have pieces of that care continuum, according to Julie Manas, president and CEO of the 349-licensed-bed Sacred Heart Hospital in Eau Clair, Wis., and division president of the Western Wisconsin division of Hospital Sisters Health System, which includes the 193-licensed-bed St. Joseph's Hospital in Chippewa Falls. "While there is discussion about moving that patient as seamlessly as we can, with incentives or lack of incentives, it's difficult because of the payment method and how we have been reimbursed. I'm embarrassed to say it drives some of our behaviors, but I think it does," she says.
When asked about interventions most likely to reduce the costs of healthcare, survey respondents identify these: adopt a care coordination plan, 69%; improve process efficiencies, 57%; automate systems and processes, 46%; and increase patient engagement, 44%.
When asked what initiatives their organization would adopt to control costs and improve care, 50% of the respondents say they would develop or join a patient-centered medical home; 48% say they would join an integrated delivery system. Manas says there are many variables involved in establishing a medical home, with success increasingly depending on patient responsibility.
Of those who have not embarked on a collaborative care program, 41% indicate they do not have interested partners to collaborate with, and 26% and 21%, respectively, acknowledge that their organization had no financial or strategic interest to do so. Mahan says the lack of interest might be attributed to healthcare systems "that could not find an interested partner, possibly because of demographics, or hesitancy within the culture of its relationship with physicians."
Chicoine explains that various organizations are dealing with coordinated care in different ways, depending on their needs and expectations, as a result of healthcare reform. "Some organizations are focused. They believe in coordinated care and population management," he says. In that way, it's "full steam ahead."
Other systems are more cautious, however. "There's a middle group that I would say has always been supportive of more coordinated care, but just doesn't have the business need or the business model to put the time and energy into it," Chicoine adds. "Then there are the naysayers who are doing all they can to hang on to the status quo and maintain it as long as possible because their business model is based on inefficient volume-based care. A lot of hospitals, unfortunately, fall into that category."
Eventually, Mahan expects health systems to embrace shared savings and do better with care coordination programs. Improved population management programs will "ensure the health of the individual, and ensure that once patients leave the hospital there's a safety net," she predicts.
The availability of meaningful use money probably will spur IT use, as well as marketing by vendors, according to Manas. For some government funds, "It's a one-time shot and we're going to go after it. If you don't, you'll never get those dollars again."
Besides IT, Mahan says transparency must improve, especially involving the purchase of medical devices and the working relationships among physicians and hospitals.
As healthcare leaders anticipate future economic issues, Mahan says one problem is that hospitals don't necessarily control their own cost base. "But if we have better alignment, with the idea of population management, and work toward ensuring the health of the individual, the cost of treating the patient could improve. It's better for the patient, and healthcare will be moving more toward a cooperative than competitive model," she concludes.
This article appears in the June 2012 issue of HealthLeaders magazine.
Reprint HLR0612-3
Joe Cantlupe is a senior editor with HealthLeaders Media Online.
