By Laura Jacobs, MPH, Executive Vice President, The Camden Group
Many healthcare organizations, in the name of integration, have acquired a collection of overlapping units that fail to achieve the intended goal of system development.
There are many reasons healthcare organizations are extending their reach horizontally and vertically. Consolidating resources for efficiency, expanding access points and market presence, adding resources to assist population health management, acquiring facilities for expansion or diversification, creating a means to recruit and retain physicians…the list goes on.
Leaders at many health systems are hoping their organizations will become integrated delivery systems, but they struggle to achieve the desired goals. While geographic and service expansion may occur, too often the resulting organization is a potpourri of entities — yielding neither integration nor efficient operations. Do any of the following scenarios sound familiar?
- Acquired medical practices are not integrated with one another, let alone the hospitals with which they are affiliated.
- Hospitals within the system have competing programs and duplicative capital requests (e.g., every hospital in the system has a cardiac surgery program).
- Population health initiatives have not been integrated or may even compete with traditional operations (e.g., discharge planning, care management, hospitalist programs).
- Post-acute programs are withering from lack of referrals from within the system.
- Decision-making processes seem to take longer and fail to achieve buy-in; no one seems accountable for the resulting decision.
- There is wide variation in performance across the system within the same business units, but no movement to spread best practices.
To avoid being a system in name only, healthcare organization leaders should undergo some intensive self-evaluation, and then take concrete steps to ensure that their organizations are, in fact, integrated.
Clarify the System Strategic Plan and Each Business Unit's Role in It
Even though there may be a perfectly fine strategic plan for the system, does each business unit have a clear mandate for how it will help to achieve it? For example, if the system seeks to evolve into a population health management enterprise, how will the employed physicians be engaged to lead the redesign of care models? What will the hospitals' payer strategy be? Does the physician recruitment plan for the hospitals support the needs of a physician network for population health management? Does the strategic plan require a restructuring of the system's portfolio of services, facilities and resources?
Ensuring that the representatives of each business unit play a part in the strategic planning process is a first step, but action plans and accountabilities within each business unit then must be articulated with respect to how they will contribute to the overall vision and goals.
Ensure that Operating Plans Have Been Unified within the System
Is there a systemwide information technology plan that considers all business units (hospitals, medical groups, post-acute care, system needs, etc.)? Are payer and pricing strategies integrated for each of these business units? Is the organization giving a uniform message to the market, or are the signals conflicting?
Consider key functions and determine whether they should be centralized, or at least standardized, for geographies and entities. While many traditional functions — finance, human resources, marketing, information technology, purchasing — already may be centralized into system functions, others may be proliferating around the system in different silos. Care management, physician recruitment, risk management, patient safety, and staff education and training are just a few functions that can benefit from integration within the system, and they are often not coordinated effectively.
Retool the Governance and Management Structure to Reflect a System Focus
One of the first things to evaluate is the effectiveness of the governance and management structure of the system. Is decision-making authority clear within the system? Is there a clear path for decisions to be made and then accountability assigned? Creating a governance structure that supports local involvement, yet doesn't bog down decision-making is a delicate balance.
One of the most critical ways to integrate clinical performance is to establish a clinical leadership governance model that oversees the physician enterprise, employed physicians, clinical standards and recruitment throughout the system. Creating horizontal clinical service-line leadership and accountability (e.g., cardiovascular service line leadership responsibilities that span the system) can promote performance improvement, achieve efficiencies, avoid capital and other resource duplication, and improve market capture.
Also consider the membership of governing boards and committees. The skills and experience necessary at the system level may be different from that of the past, if the organization has grown from a one- or two-hospital institution to a multidimensional system that spans the continuum of care. Ensuring that system governance has more than an acute care focus is critical if the rest of the organization is going to evolve and integrate. The same can be said for system management positions: Make sure that the roles necessary for systemwide leadership are a match for the capabilities of the individuals assigned.
Design Performance Measurement Tools to Foster Internal Benchmarking
Dashboard reports are now fairly common within healthcare organizations, but do yours allow comparisons within the system of key performance indicators? And are these internal benchmarks compared with external best practices? This will be important to ensure that "a rising tide lifts all boats," instead of just performing to the "mean" within your own setting. In addition to the performance reporting, having a structure in place that facilitates sharing of best practices and communication throughout the organization is just as important. Having "affinity groups" of individuals in similar positions in the system can help with communication and learning, not to mention breeding opportunity for collaboration.
Align Incentives to Support System Success and Accountability
How are executives compensated within the system? Is it solely based on the performance of their business unit? How do you expect a hospital executive to give up a profitable service line in the name of better resource allocation or system strategy if it means he or she will miss a financial target on which his or her compensation is based? Making sure that systemwide goals and incentives are just as powerful as local or business unit incentives is key if system strategies are to be achieved with any speed. Likewise, do physicians' incentives reach beyond individual productivity and include measures related to systemwide performance (e.g., population health metrics)? Balancing individual with system incentives is not simple or easy, but it is important to get all oars rowing in the same direction.
Leaders Must Drive Change
Inertia is a powerful thing and, left to its own devices, each hospital within a system, each physician practice, and each post-acute or other business unit will pursue activities that have produced success in the past. In addition, individuals who have held certain positions within those organizations will be reluctant to cede control, decision-making authority, resources or power as the system attempts to create a more unified entity. This is where leadership will meet its test: Are we willing to forge ahead, confront difficult situations, even consider losing people who have been with the organization for decades, to execute the new playbook required of truly integrated delivery systems?
To fly to the moon, we needed rocket scientists and risk-takers who were willing to collaborate as a team. We wouldn't have gotten there without a group of people with the vision, skill and commitment to achieve something that at times seemed impossible.
How will you take the parts you have assembled and build a healthcare system that will sustain itself into the "deep space" of the unknown future? Set the vision, structure the enterprise, assemble the team and measure performance to ensure that you're on the right path. Then hold on and stay focused — and don't be afraid to disassemble some parts to be sure those you retain fit together to create the vehicle that will propel you to your desired destination.
Ms. Jacobs is executive vice president at The Camden Group and has been with the firm since 1990. She has more than 25 years of experience in the areas of physician-hospital relationships, physician group development and management, performance improvement, healthcare strategic planning and marketing, physician compensation, and payer strategy. She is a noted speaker and industry resource on the impact of healthcare trends, most notably the requirements for success in value-based payment models, clinical integration, and creating successful integrated delivery systems. She may be reached at firstname.lastname@example.org or 310-320-3990.