The Health Care Delivery System and Managed Care
Organizing the U.S. Health care Delivery System for High Performance
· Healthcare Delivery Systems in the United States
• Perspectives on Healthcare
• An In-depth Look at the ISyE Health Systems
· Graduate Program at Georgia Tech
Health Systems
As Professor François Sainfort indicates in this issue, healthcare is the largest industry in the
Healthcare is a very large, complex, and inefficient industry. The complications of the underlying issues are enormous. Fragmentation and competing interests are laced throughout the system. There are no ultimate decision makers other than arduous political processes. Yet, given the above projections, we have no choice but find ways to manage the complexity and gain significant efficiencies.
Professor Sainfort argues that this provides tremendous opportunities for industrial and systems engineering. This perspective is certainly supported by Bill George, interviewed in this issue. Bill is one of our many alumni CEOs who has achieved great success. He is now sharing his experiences and insights with aspiring executives at Harvard Business School.
In this interview, Bill outlines his ideas on transformational leadership. His most notable success was as CEO of Medtronic, a high-tech leader in the healthcare industry. Bill also discusses healthcare as an overall system, includ-ing issues of competition, measurement, and incentives. He provides a strong dose of articulate, clear thinking. Several articles in this issue describe the Health Systems Program in ISyE. This program was founded in 1958 and has approximately 600 alumni. In more than 40 years of evolution, the program has grown to have three major themes:
Ø Biological and Biomedical Operations Research
Ø Healthcare Delivery Operations Research and Management
Ø Knowledge Management and Information Technology
These areas dovetail nicely with the College of Engineering’s major initia-tives in Bioinformatics, Quantitative Medicine, and Computational Biology; as well as Nanomedicine. This issue of Engineering Enterprise describes the research of many ISyE faculty members in areas ranging from cancer treatment to visual impair-ments to dental services. The scope of these efforts ranges from individual patients, to delivery processes, to overall system models. It is very clear that the breadth of ISyE competencies is well aligned with problems and opportunities in healthcare.
Nevertheless, healthcare is a big challenge with enormous consequences for everyone. We will need lots of ingenuity and initiative to succeed with this challenge. Fortunately, Georgia Tech engineers are well endowed with these attributes. Frankly, they will need all the talent they and others can muster to gain success in this undertaking.
The problems facing the U.S. health care system are often portrayed as unique to this country. Indeed, our system has the most expensive price tag and the highest rate of cost-related barriers to health care of any com -parable nation. Yet we may not be as different as we imagine. Costs in some other developed countries are rising at about the same rate, and con -cerns over gaps in quality and safety are widespread internationally.
The ubiquity of this trend indicates that policies for financing health care alone are unlikely to resolve cost challenges. Real progress will require a multipronged strategy that promotes greater organization and integration of health care—a goal that should be an explicit focus of the next adminis -tration’s policies.
Organization of health care providers is itself a means to an end; it will establish and promote systems that improve efficiency, reliability, safety, and patient-centered care—goals detailed in the book’s introduction.
Greater organization of care has the potential to lead to important benefits such as better integrated and more efficient care, but it will also make dif -ficult demands on health care providers.
WHO is an organizer and coordinator of international cooperation on the issues of medical science and health care.
The goal of WHO is: “Achievement by people a minimum of level of health level”. According to WHO, Health is defined as a state of complete physical, mental and social well-being and not merely an absence of disease and physical deformities.
Functions of WHO:
Ø • Co-ordination of international activity for health care.
Ø • Grant to the states of the proper information.
Ø • Grant of help on matters related to the organization of health care.
Ø • Assistance and development of efforts in the fight against epidemic, endemic and other illnesses, and also in psychological health care.
Ø • Conducting of common researches related to health care.
Ø • Assistance in training of the medical personnel.
The international problems of health care, is also taken care by the WMA besides the WHO. World medical association (WMA) was founded in 1948 and is financed by voluntary National medical associations, which is represented by over million doctors from all over the world.
The World health organization (WHO), meets annually in
For co-ordination of international activity related to health protection WHO, in the early 80s set up a “Strategy for achievement of health for all by the year 2000″, and which in the year 1997 was changed to “Achievement of health for all by the twenty first century”.
“Achievement by all people such health level will give them a possibility to lead a life which is economically and socially productive”. This is primary purpose of the proposed strategy.
The primary goal of the European program are:
Ø • achievement of justice and even rights on the questions of health protection for the population of different European countries;
Ø • improvement of health of the most vulnerable groups of population (invalids,older people , children, young people; women and persons with chronic diseases) ;
Ø • considerable decrease in the incidence of common health problems like (Cardiovascular diseases malignant disorders, trauma ,infectious and psychological disorders)
For achievement of the indicated aims, certain facts are to be taken into consideration for there is a wide difference between the indices of the state of health of population of different countries of the European region and different groups of population within the country. Yes, in different countries of
Basic factors, which predetermine such differences are:
• stress at work and lifestyle;
• inadequacy and unavailability of medical care;
• Habits, which are harmful to health like smoking, drinking e.t.c.
Program of “Health for all by the twenty first century” foresees reduction in the indices of health by:
• introduction of monitoring of differences in indices between different countries and within one’s own country .
• provision of proper food, housing, educational facilities, safe drinking water and sanitation.
• greater attention and help to the underdeveloped countries.
The most vulnerable group of the population comprises of the following groups:
• invalids;
• Old age group people;
•children and young people;
• women;
• people with the chronic diseases.
10 % of population of
In order to achieve this goal it is required to provide:
• assistance, and a positive attitude toward invalids in society;
•assistance to increase their independence by rehabilitation and social support;
•grant of special help not only to the invalids but also to those, who take care of them.
Children and young people in
•strongly observing the substantive provisions of Convention of UNO on rights for a child (in 1989);
•organization of systematic supervision of the health of children and young people, including high-quality help to pregnant women, protection of health of children of preschool and school age group ;
strengthening of propaganda of healthy way of life among children and young people;
•special socio-economic and psychological support to the children and their families of the lower socio – economic strata.
Health and social state of women, as compared to men is of greater concern in view of their reproductive function. The rates of morbidity and unemployment are higher and the incomes are lower in women as compared to her counterpart due to which there is a need for a detailed study of this group of population (women) in a wider perspective.
People suffering from chronic diseases (e.g. cardiovascular, neurological, allergic, chronic respiratory diseases and diabetes) also belong to the most vulnerable categories of the population. To reduce the incidences of such indices of morbidity and disability from these illnesses it is needed to:
• develop perfect primary medical and sanitary help;
• common services of health and, public welfare care for support of both patients and those who take of care them;
• creation of specialized centers to grant social help to the persons who suffer from chronic diseases.
One of important aims of the European strategy of achievement of health for all by the 21st century ” is a prophylaxis and a means to reduce the number of most widespread and socially important groups of diseases, lik; cardiovascular diseases, malignant disorders, traumas, psychological diseases, suicides, and infectious diseases.
35 % of death cases among males and 30 % of cases of death in women of age of 65 years are due to cardiovascular diseases and in the age group of 65 years and more the death rate is 54 % in men and 60 % in women also due to cardiovascular disease.
These illnesses cause one third of all cases of disability among the population of the European region. Differences in the levels of death rate among the population of to 65 years are made from 70 to 256 per 100 mils of population at men and from 22 to 104 – among women, and in age 65 and senior to disagreement arrive at 3-4 times at men and 3-5 at women.
The most effective approaches for reducing death rate in a population due to cardiovascular diseases.
They are the following:
• active encouragement to the healthy way of life (by stopping to smoke in those who have just started to smoke, and reduction of smoking
in those who have been chronic smokers ; advice on consumption of balanced diet);
• providing effective methods of diagnosis and treatment for the sick;
• the provision of medico- social help , including physical, psychological and social rehabilitation , and avoidance of risk factors like smoking , alcohol consumption .
Among other causes of death malignancies comprise about 35 % of death in men and about 40 % of death in women under the age of 65 years in
The increase of general death rate due to malignant tumors in men is usually due to the cancer of lungs (1/3 all cases of death), and in women due to the cancer of the breast under age 65 and after 65 years.
Various methods have been proposed to reduce the death rate due to malignant tumors, which are given below:
•activation of fight against smoking (by adopting this there is a tendency of decrease of malignant conditions in both men and women.
•introduction of the automated registers of information about patients with malignant new formations, as the most effective method of planning, management and estimations of measures on the fight against them;
•provision of effective methods of diagnosis and treatment for the sick;
• introduction of effective screening methods and subsequent treatment of patients with the cancer of breast and cancer of cervix. It has been found to be one of the most effective methods of decreasing the incidence of new formations in these sites.
The infectious diseases affects a third of population of
Implementation of such programmes is possible by providing obligatory vaccination of children and the susceptible groups.
Another major problem of the European countries is trauma. This is testified, by the fact that one third of all cases of death among 15-24 years is due to Road Traffic Accidents attributed largely to the use of alcohol.
The reduction of indices of disability and death rate due to trauma can be brought about by engineering, medical, educational and legal services.
A large disturbance causes growth of number of psychological disorders.
In
Studies have shown that suicides are a leading cause of death in 15 % of teenagers and in young men in age group of 15 to 24; 19% in the age group of 25 to 34 years; and women suicides constitutes about 12 – 14 % of deaths in the above age groups . Level of suicides in persons of 65 years and older exceeds that of the other age groups. This problem will deepen together with the process of senescence of population.
The program undertakes measures such as those mentioned below to reduce the number of psychological diseases and suicides:
• development of comprehensive services of psychological health at local territorial level with the increase in the role and participation of primary medico –social help;
• development of special educational programs for the categories of population, which are directly affected by crises unemployment and social isolation.
• development and introduction of special programmes at national, regional and local level pertaining to prevention of suicides.
• Development of more humane forms of grant for the help of the psychical patients and distribution of the grants to the special medical establishments for the provisions of optimal services at the local territorial level.
For achievement of justice and fundamental rights pertaining to health protection of population of different European countries, the improvement of health of the most vulnerable groups and decrease in the number of the most widespread diseases the program foresees such methods:
– encouragement of population to adopt a healthy way of life;
– Adopting a healthy environment;
– providing the population with a proper medical and sanitation facilities help.
A traditional phased approach identifies a sequence of steps to be completed. In the “traditional approach”, five developmental components of a project can be distinguished (four stages plus control):
HOW DO WE WANT HEALTH CARE TO BE DELIVERED?
In a more organized health care delivery system, Frank, Sally, and Trent would have markedly different patient experiences:
· During his hospitalization, Frank would be actively engaged in planning for his care after discharge. His discharge plan would consider his medical needs, as well as needs for clinical nursing, physical therapy, and help with daily activities (e.g., cooking and cleaning). He would leave the hospital with clear instructions about how to manage his illness, and have an appointment with his primary care practice scheduled for soon after discharge. A nurse, physician, or other clinical care manager would check in with him on a daily basis for a few days after discharge. He might even be given equipment to let his care team remotely monitor his medical status. During his first post-discharge physician visit, the details of his hospitalization would already be in his electronic medical record, and his primary care team would have communicated with the hospital team to coordinate a treatment plan. Frank would have avoided another hospitalization, and enjoyed a better quality of life.
· Sally’s physician and other office staff would have participated in a quality improvement collaborative with other practices to improve their care management processes, and they would have an electronic health record (EHR) system to help optimally manage Sally’s care. The EHR would have reminded both Sally and her physician to have the recommended tests. In addition, Sally’s physician would be tracking over time performance indicators based on evidence-based clinical guidelines for all of his diabetic patients, and working with other practices to learn how to achieve benchmark performance. With better care, Sally would be more likely to prevent long-term complications associated with diabetes.
· Trent would have been able to schedule an evening or weekend appointment when he needed it. Although his regular doctor may not have been available every evening or on weekends, there would always be a physician or other clinician who has access to Trent’s electronic medical records. Trent would have been able to avoid a costly emergency room visit and enjoy a quicker recovery from his asthma exacerbation.
In each of the cases, someone—a person, practice, or other organization—would be clearly accountable for the total care of the patient and would ensure that the patient receives high-quality, patient-centered care. In short, an ideal health care delivery system would be organized to have the following attributes:
1. Patients’ clinically relevant information is available to all providers at the point of care and to patients through electronic health record systems.
2. Patient care is coordinated among multiple providers and transitions across care settings are actively managed.
3. Providers (including nurses and other members of the care team) both within and across settings have accountability to one another, review one another’s work, and collaborate to reliably deliver high-quality, high-value care.
4. Patients have easy access to appropriate care and information, including after hours; there are multiple points of entry to the system; and providers are culturally competent and responsive to patients’ needs.
5. There is clear accountability for the total care of the patient.
6. The system is continuously innovating and learning in order to improve the quality, value, and patients’ experiences of health care delivery.
Each of these attributes is discussed in more detail below.
Attribute 1: Patients’ clinically relevant information is available to all providers at the point of care and to patients through electronic health record systems.
It is critical that providers have access to a patient’s full medical history at the point of care in order to deliver the most clinically effective and efficient care. To have this information available in real time, the most feasible approach is to implement interoperable electronic health record systems. Patients also should have access to their medical records, either through a portal to their provider’s EHR system or through a direct transfer of information to patients’ personal and portable health records. In addition to providing timely and relevant clinical information, EHRs have tools to support providers, including clinical decision support systems, reminders for preventive and other routine services, disease registries for population management, and e-prescribing.
Systematic reviews of the literature have demonstrated the potential for health information technology to transform the delivery of health care, making it safer, more effective, and more efficient. EHRs, when successfully implemented, improve the quality of care by increasing adherence to clinical guidelines, enhancing providers’ capacity for disease surveillance and monitoring, and reducing medication errors. In terms of controlling costs, in addition to efficiencies gained from better care management and reduction of duplicative tests, EHRs can improve administrative efficiency. Practices that have implemented EHRs report savings from reduced transcription services, decreased labor and supply costs for chart maintenance and creation, and decreased physical space requirements for medical records.
Attribute 2: Patient care is coordinated among multiple providers and transitions across care settings are actively managed.
As patients navigate through our health system, they see multiple providers (e.g., primary care providers and specialists, psychologists, social workers, and physical therapists) across different settings (e.g., hospitals and physician offices). It is therefore critical that their care is coordinated, and that transitions among care settings are actively managed. Without such management, patients are likely to be frustrated, medical errors are more likely to occur, and unnecessary or avoidable utilization of health care services will increase.
There is strong evidence that, if properly implemented, systems of care coordination could improve health outcomes and reduce costs, especially for patients with complex care needs. In North Dakota, MeritCare Health System and Blue Cross Blue Shield of North Dakota collaborated to conduct a chronic disease management (CDM) pilot program that linked diabetes patients to a CDM nurse in their primary care clinic. This team-oriented approach to coordinating diabetes care resulted in a significant increase in the receipt of recommended care and improved clinical outcomes, including better control of blood sugar and cholesterol, lower tobacco use, and decreased hospital admissions and emergency department visits. Total costs per member per year were $530 lower than expected in the intervention group, based on historical trends, saving an estimated $102,000 for 192 patients in the pilot.
Geisinger Health System has used coordination within a primary care setting through its Advanced Medical Home program. There is great interest now in the “medical home” concept, which is an approach to providing primary care that is accessible, continuous, comprehensive, patient-centered, and coordinated. At Geisinger, patients at high risk for disease complications are assigned a nurse case manager, who is employed by the health plan but embedded as a member of the primary care team in local Geisinger clinics as well as non-Geisinger medical groups. The nurse care manager coordinates with patients’ primary care physicians to develop and carry out customized care plans, including instituting evidence-based protocols and conducting outreach and follow-up when appropriate. The nurse also ensures that all patients admitted to the hospital receive timely follow-up care after discharge and analyzes what happened if a patient has to be readmitted. The system has documented improvements in care processes and cost control, such as savings of about $100 per member per month from reductions in avoidable hospital use among diabetes patients.
As with care coordination programs, there is evidence that care transition programs can result in better outcomes and lower costs. In the Advanced Practice Nurse (APN) Transitional Care Model developed by Mary Naylor of the University of Pennsylvania, APNs follow up with hospitalized heart failure patients after discharge to provide customized care in their homes. A randomized clinical trial of this protocol revealed increased mean time to first readmission for the intervention group, compared with the control group, and significantly fewer total rehospitalizations and lower mean total costs at 52 weeks after discharge. Together, these changes resulted in a one-third reduction in total Medicare outlays. Similarly, Eric Coleman of the University of Colorado Health Sciences Center determined that patients and their caregivers who received tools and support from a nurse “transition coach” upon hospital discharge were significantly less likely to be rehospitalized. Using his Care Transitions Measure, Coleman demonstrated that hospitals that provide adequate information to patients on how to manage their conditions following discharge are significantly less likely to have patients return to the hospital or the emergency room for the same condition.
Attribute 3: Providers (including nurses and other members of the care team) within and across settings have accountability to one another, review each other’s work, and collaborate to reliably deliver high-quality, high-value care.
In an ideal delivery system, providers both within and across settings would work together to reliably deliver high-quality, high-value care. In order for this to be effective, providers must develop accountability to one another. At a system level, accountability would be based on the notion of group responsibility and shared commitment to quality care. This would be evidenced in the performance improvement infrastructure, including peer review procedures, processes for sharing best practices, routine monitoring and feedback of provider performance, and monitoring of overall system performance. Collaborative efforts, supported by effective leadership and shared goals, result in better performance than that of providers working in isolation. For example, large physician groups generally perform better on measures of clinical quality than small physician groups (see Section IVfor additional discussion).
In addition to having a performance improvement infrastructure, it is also important that providers offer team-based care. The Institute of Medicine identified the development of effective teams as one of the key challenges for the redesign of health care organizations, and 88 percent of Americans view doctors and nurses working as a team as an effective way to improve health care quality. For example, the IMPACT program, disseminated by the University of Washington, improves the quality and efficiency of care for patients with late-life depression through collaborative teamwork. Under this model, a depressed patient’s primary care physician works in collaboration with a care manager (a nurse, psychologist, or social worker who may be supported by a medical assistant or other paraprofessional) to develop and implement a treatment plan. A consulting psychiatrist provides weekly caseload supervision to the care manager. If the patient’s condition does not improve (by at least 50 percent after 10 weeks), the consulting psychiatrist suggests treatment changes. In multiple studies, the IMPACT program has been shown to be significantly more effective than usual care for depression in a wide range of primary care settings. A randomized controlled trial found that 45 percent of IMPACT patients had a 50 percent or greater reduction in symptoms of depression after 12 months, compared with 19 percent of patients in the usual care group. IMPACT patients had lower-than-average costs over four years for all of their medical care, a total of approximately $3,300 less than patients receiving usual care, even taking into account the cost of the IMPACT program.
Attribute 4: Patients have easy access to appropriate care and information, including after hours; there are multiple points of entry to the system; and providers are culturally competent and responsive to patients’ needs.
In a patient-centered health system, appropriate care should be easily accessible to patients. Beyond having health insurance coverage, patients should be able to access appropriate health care when it is convenient for them; that means offering same-day appointments for urgent care and office hours that extend beyond regular work hours. Providers should be culturally competent, too—that is, they should show respect for and demonstrate understanding of patients’ preferences and their cultural, social, and economic backgrounds. There should also be multiple ways for a patient to enter the health system, such as through convenient retail clinics or e-health visits, as well as through traditional primary care clinics. Finally, patients should have 24-hour access to clinicians to help them navigate the health system for urgent care needs.
There is evidence that patients who receive care in a setting that is well organized and offers enhanced access to providers (e.g., in a medical home) are more likely to get the care they need, receive reminders for preventive screenings, and report better management of chronic conditions than patients who do not receive regular care in such settings.
Attribute 5: There is clear accountability for the total care of the patient.
In our health care system, it is easy to imagine that no single physician, or entity, feels accountable for the total care of a patient, but only for the portion of care they directly deliver. Without accountability for total care, it is easy to ignore care coordination and care transitions (and risk having patients “fall through the cracks”), and to focus on high-cost, intensive medical interventions rather than higher-value preventive medicine and the management of chronic illness.
In an ideal delivery system, some entity would be accountable for the total care of patients, across providers and care settings. The locus of accountability may be with an individual physician, a medical home, or the entire delivery system.
Attribute 6: The system is continuously innovating and learning in order to improve the quality, value, and patients’ experiences of health care delivery.
In an ideal delivery system, providers and health system leaders would be continuously learning and applying their knowledge to improve the quality, value, and patients’ experiences of health care. Not only would innovation drive performance improvement for existing processes, but also new structures and models of care would be tested to deliver greater quality and value to patients (e.g., the disease management and care coordination models described above).
IS ITACHIEVABLE?
Despite the overall fragmentation of the health care delivery system, there are pockets of innovation and high performance in the United States. The Commonwealth Fund, in partnership with Issues Research, conducted case studies of 15 diverse types of delivery systems that have been widely recognized as examples of high performance (see Appendix and Exhibit 1). The case studies examine the achievements of the delivery systems on the attributes we have identified for ideal health care delivery. The subjects range from fully integrated delivery systems such as Kaiser Permanente to large multi-specialty group practices such as the Marshfield Clinic to looser forms of organization such as Community Care of North Carolina. Even among the integrated systems, there was diversity with regard to public versus private systems, whether the system also included a health plan, and the contractual relationships among the partners.
From the case analyses, four important lessons emerge:
· Existing delivery systems have achieved many of the attributes of ideal health care delivery.
· There is more than one approach to organizing providers to achieve these attributes (see box).
· Although there are diverse approaches to organization, some form of organization (i.e.,relationship among providers with established mechanisms for working across providers and settings) is required to achieve these attributes.
· Leadership is a critical factor in the success of delivery systems.
The following sections illustrate how the 15 delivery systems examined in our case studies achieved the attributes of ideal health care delivery. A summary of each health system’s performance on each attribute is found in the Appendix (Exhibit A2).
Patients’ clinically relevant information is available to all providers at the point of care and to patients through electronic health record systems.
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Iearly all the delivery systems, providers use a shared electronic medical record. Lab results and other tests are available to all providers, regardless of who actually ordered the test. In some systems, such as the Group Health Cooperative, Henry Ford, Geisinger, and Kaiser, electronic medical records have portals to enable patients to access their medical information and make appointments online. The investment in these systems was substantial, both in terms of hardware and software costs as well as training and ongoing support of provider utilization. The resources were either a direct investment by the delivery system or, as in the case of Partners HealthCare, funded in part by a payer’s pay-for-performance program negotiated by the delivery system. In either case, organization was critical not only in getting providers to adopt electronic medical records, but also in creating infrastructure to enable information exchange.
Regional Health Information Organizations or Health Information Exchange Networks may be able to facilitate information exchanges among providers. However—given the demise of high-profile health information exchange efforts such as the Santa Barbara County Care Exchange and the slow adoption of EHRs by physicians not in large organizations—widespread use of EHRs with sharing of information among providers is most likely to occur in organized delivery systems.
Patient care is coordinated among multiple providers and transitions across care settings are actively managed.
Organized delivery systems are working to ensure that patient care is coordinated and care transitions are managed. Several delivery systems, including Geisinger, Group Health Cooperative, and Henry Ford, are developing their primary care sites to be “medical homes,” or centers of care coordination for ambulatory patients. Intermountain Healthcare (IHC) emphasizes the central role of primary care physicians in managing patients’ care, enabling them to treat chronic illnesses in the context of broader health issues. For example, IHC instituted a mental health integration program in which behavioral health professionals support primary care teams in recognizing and treating patients with both physical and mental illnesses. At the Mayo Clinic, every patient is assigned a coordinating physician, whose job it is to ensure that patients have an appropriate care plan, all ancillary services and consultations are scheduled in a timely fashion to meet patients’ needs, and patients receive clear communication throughout and at the conclusion of an episode of care.
In the New York City Health and Hospital Corporation’s Queens Health Network, care managers dedicated to several different clinical areas or settings (e.g., the emergency department, diabetes, heart failure, or HIV) are responsible for identifying high-risk patients and coordinating their care across inpatient, outpatient, and community clinics, with the goal of preventing emergency hospital visits. These care managers operate under a cross-functional care management department.
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Even in less-integrated systems, such as Community Care of North Carolina (CCNC), care management is critical. CCNC is a system of 14 regional networks, each of which is a nonprofit organization consisting of essential local providers, county health departments, and social services. CCNC networks rely on case managers, whose core processes are the same across all networks, to help identify high-risk patients, assist in disease management education and follow-up, help patients coordinate their care and access services, and collect data on process and outcome measures.
A systematic approach to coordinating patient care and managing transitions requires some organizing entity. The mechanism is apparent in a single organization such as an integrated delivery system, since a single organization housing multiple providers and care settings is responsible for all aspects of that patient’s care. Individual providers or small practices that seek to offer well-coordinated care must establish multiple linkages with other providers and settings. These linkages are, in fact, the beginning of “organization.”
Delivery systems that include health plans have financial incentives to provide care coordination and care transition services. To the extent that overall costs are reduced from fewer emergency room visits or hospitalizations, these programs offer a positive return on investment. However, the case studies revealed that even in cases where no direct incentives existed, exemplary organizations made significant investments in care coordination, presumably because they saw the need for such services for providing excellent patient care.
Providers (including nurses and other members of the care team) within and across settings have accountability to one another, review one another’s work, and work together to reliably deliver high-quality, high-value, care.
Across the case studies, the delivery systems created a culture of quality in which providers had a sense of group responsibility and accountability to one another. At Kaiser Permanente, this fostered transparency, the sharing of performance data among peers, and the use of feedback as a driver of performance improvement. Kaiser Permanente physicians believe they are collectively and individually responsible for the quality and cost of care; they are stewards of both member resources and member health; and they are accountable to the health plan as full and equal partners. At Kaiser and other systems, shared accountability is reflected in robust performance measurement infrastructure as well as the aligning of incentives with performance goals. For example, HealthPartners has implemented a pay-for-performance program with their medical groups, Henry Ford has rewards and recognition programs for all staff, and Geisinger and Kaiser have a robust physician incentive program.
Patients have easy access to appropriate care and information, including after hours. There are multiple points of entry to the system, and providers are culturally competent and responsive to the needs of the patient.
For example, Intermountain Healthcare extends access to underserved populations through community and school-based clinics, in addition to traditional primary care practices. HealthPartners reaches out to workers through their Well@Work workplace clinics. It is difficult to imagine how unrelated practices—those that are not part of a larger organized delivery system or active participants in an information exchange—could offer easy access to appropriate medical care, with multiple points of entry to the system.
Many of the delivery systems examined, including Group Health Cooperative, the Marshfield Clinic, and Denver Health, have reengineered their work processes to improve same-day access for their members, and most have 24/7 alternatives (e.g., call lines and urgent care centers) to emergency department care. Health information technology plays a key role in improving access to care. Electronic systems facilitate easier scheduling of appointments. In addition, systems such as the Henry Ford Health System’s interactive Web site, “MyHealth,” enable virtual medicine consults or “e-visits.”
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On its own, organization does not necessarily foster cultural competency among individual providers. Still, large delivery systems or smaller systems linked through virtual networks or shared services agreements have the resources needed to develop culturally sensitive programs for diverse patient populations. With organizational commitment, such programs can be transformative. Kaiser has developed clinics for specific patient populations. At these clinics, patients communicate with their providers in their native language and staff members are aware of and sensitive to patients’ cultural backgrounds. New York City Health and Hospitals Corporation (HHC) meets the needs of patients speaking over 100 languages through central dispatch offices for interpretation services, supported by standardized medical interpretation training for 200 bilingual and multilingual staff and volunteers, as well as multilingual publications and signs. HHC’s Bellevue and Kings County Hospitals, as well as two large community-based ambulatory care centers, are piloting the use of remote simultaneous medical interpreting, in which a remotely located interpreter uses wireless technology to interpret between providers and patients. Initial results indicate the technology improves the privacy, speed, reliability, and efficiency of interpretation, compared with traditional interpretation methods, thereby reducing linguistic and medical errors and the length of visits.
Typical development phases of an engineering project
1. initiation
2. planning and design
3. execution and construction
4. monitoring and controlling systems
5. completion
Not all projects will have every stage, as projects can be terminated before they reach completion. Some projects do not follow a structured planning and/or monitoring process. And some projects will go through steps 2, 3 and 4 multiple times.
Many industries use variations of these project stages. For example, when working on a brick-and-mortar design and construction, projects will typically progress through stages like pre-planning, conceptual design, schematic design, design development, construction drawings (or contract documents), and construction administration. In software development, this approach is often known as the waterfall model, i.e., one series of tasks after another in linear sequence. In software development many organizations have adapted the Rational Unified Process (RUP) to fit this methodology, although RUP does not require or explicitly recommend this practice. Waterfall development works well for small, well defined projects, but often fails in larger projects of undefined and ambiguous nature.
The Cone of Uncertainty explains some of this as the planning made on the initial phase of the project suffers from a high degree of uncertainty. This becomes especially true as software development is often the realization of a new or novel product. In projects where requirements have not been finalized and can change, requirements management is used to develop an accurate and complete definition of the behavior of software that can serve as the basis for software development. While the terms may differ from industry to industry, the actual stages typically follow common steps to problem solving—”defining the problem, weighing options, choosing a path, implementation and evaluation.”
There is clear accountability for the total care of the patient.
Although there are cases in which one of the delivery systems assigned an accountable physician (e.g., Mayo Clinic) or an accountable practice (e.g., Geisinger’s “Medical Homes”) for a patient, it may be more appropriate to say that each of the health systems assumed accountability for the patient. Even though patients move among different providers and across care settings, they generally remain within the health system. This arrangement is most explicit in the prepaid practices, such as Kaiser Permanente, as there is clear financial accountability for patients’ total care. However, the other delivery systems also assumed responsibility for patients, reflected in their efforts to coordinate care and manage care transitions.
The system is continuously innovating and learning in order to improve the quality, value, and patients’ experiences of health care delivery.
The case studies found widespread evidence of innovation and continuous improvement. Not surprisingly, across many of the systems, electronic medical records play a critical role as enablers of performance improvement activities. For example, the Health and Hospitals Corporation uses health information technology to implement evidence-based practices through standing orders and routine screening protocols, while HealthPartners uses EHRs for clinical reminders and safety alerts.
In addition to using health information technology, organized delivery systems take advantage of their scale and infrastructure to improve health care quality and value. For example, Intermountain Healthcare has adopted an overarching strategic plan called Clinical Integration that focuses on improving value in key work processes. The program is built on three pillars: integrated management information systems, an integrated clinical and operations management structure, and integrated incentives. Early on, they realized $20 million in cost savings from 11 clinical improvement projects. Likewise, Denver Health seeks to continually streamline operations and eliminate waste for strategic “value streams”—such as access to care, inpatient flow, outpatient flow, operating room flow, and billing—with rapid-cycle improvement projects targeted at individual processes. Health Partners has a comprehensive model for improvement that includes: setting ambitious targets; measuring optimal care; reaching agreement on best care practices and support for improvement; aligning incentives; and ensuring transparency of results. At Scott & White in Temple, Texas, every major facility and clinic has a director of quality and a Quality and Patient Safety Council who report monthly to a system-wide Quality and Patient Safety Council led by the system CEO. The system-wide Council, on which four board members (including a layperson) serve, monitors quality across the organization. Any core quality measure not achieving 90 percent becomes an organization-wide quality improvement initiative with a formally chartered team led by a physician and an operational leader.
Without an organizing entity, providers could certainly engage in performance improvement projects and take advantage of external resources (e.g., the Medicare Quality Improvement Organization program, Institute for Healthcare Improvement campaigns, or national quality improvement collaboratives), but they would lack the expertise and economies of scale that come from a larger organization. In addition, they would face enormous difficulties in working across provider settings, and would not be able to implement novel innovations such as the chronic disease management program in North Dakota or the Advanced Medical Home program at Geisinger, both described above.
In short, the cases illustrate that the care that we want—care that meets the six attributes of an ideal health care delivery system—requires organization.
IV. WHAT DO WE KNOW ABOUT “ORGANIZATION”?
Re-Forming Health Care Delivery Systems:
A Summary of a Forum for States
and Health Centers
The National Academy for State Health Policy (NASHP) would like to extend its thanks and appreciation to NASHP Academy members who serve as advisors for our work under our National Cooperative Agreement with the Bureau of Primary Health Care (BPHC), the teams of state primary care office and association representatives and state policymakers from Missouri, New Mexico, Oregon, Pennsylvania, Rhode Island, and Tennessee who participate in the work of this cooperative agreement, as well as partner national organizations, federal agencies and others who took the time to present at and participate in the June 2010 Forum which forms the basis for this paper.
The Academy Advisors and state teams helped to shape the content of the Forum and also reviewed a draft of this paper. National organization and federal partners played active roles in the Forum as speakers or breakout session facilitators, and we appreciate their assistance. We also would like to thank Research Assistants Jennifer Dolatshahi and Neesha Rao. This report benefited greatly from their assistance and input.
This publication was made possible by grant number U30CS09747 from the Health Resources and Service Administration BPHC. Its contents are solely the responsibility of the authors and do not necessarily represent the official views of HRSA or any of the organizations or agencies which participated in the Forum.
For the purposes of this report, we define “organization” as relationships among providers, with established mechanisms for communication or working across providers and settings. Although the case studies demonstrate that there are various effective approaches to organization, ranging from fully integrated delivery systems like Kaiser Permanente to looser networks of providers like Community Care of North Carolina, it is clear that some form of organization is required to achieve the attributes of an ideal health system we have identified.
The argument linking greater organization with higher performance is straightforward. Information should flow more easily among providers in an organized system than among unrelated providers. More organized systems are likely to have more resources and expertise to invest in infrastructure, ranging from health information technology to staff and processes for quality measurement and improvement activities, and be able to take advantage of economies of scale. Large organizations can create financial incentives for physicians to improve the quality of care. In organized systems, physicians and other health care providers should have easy access to colleagues for formal and informal consultation and sharing knowledge. As part of an organization, providers could hold one another accountable for delivering high-quality care. An organized system also has the potential to efficiently allocate resources for the optimal care of the patient. Finally, a more organized system should offer multiple points of access to care across the continuum of health services.
We reviewed the literature examining the relationship between various types of organization and performance on measures of clinical quality, efficiency, and patient experiences. Overall, the literature demonstrates that more organized systems generally perform better than less organized systems on measures of clinical quality, show promise for reducing health care costs, and have a mixed record in terms of patients’ experiences. It is also clear, however, that organization by itself does not necessarily lead to high performance.
The passage of the Patient Protection and Affordable Care Act (referred to as the Affordable Care Act or ACA) provides new tools and resources for transforming health care delivery systems. However, using these resources effectively to address health care access, cost and quality challenges—particu-larly for vulnerable populations— lies in the hands of state policymakers and key health system stakeholders.
In June 2010, the National Academy for State Health Policy (NASHP) convened Re-Forming What We Have Into the Delivery System We Want: A Forum for State and Community Health Center Strategy Development. Based on the presentations and discussions at the Forum, this paper presents a vision for a transformed delivery system; highlights key federal resources to help achieve this vision; explores the core elements of delivery system reform; and offers specific examples of health centers and states that are partnering to design and implement innovative models of health care. Colorado’s vision. Colorado Medicaid provides an excellent example of a state working toward transforming its delivery system through the development of an accountable care organization (ACO) model. This ACO in -frastructure is being built on a medical home platform.
The Colorado Medical Home Initiative forms this plat-form providing Medicaid and Children’s Health Insurance Program (CHIP) children with access to a qualified medical home. Through this platform, Medicaid is poised to develop its ACO model, known as Regional Care Coordination Organizations (RCCOs). Seven RCCOs will be launched in 2011 to coordinate and integrate care among providers, between programs and through all phases of life. With this model, Colorado hopes to reduce costs and improve population health with an outcomes-driven system; allow regional entities to perform using their local strengths by building “pockets of excellence”; and pilot initial payment reform models which will greatly help the state move forward.
The Accountable Care Act contains a number of new tools and resources to help reform delivery systems above and beyond those that will increase coverage. Those highlighted during the Forum include: Support to states to increase Medicaid payments to 100 percent of Medicare levels for primary care •
services provided by primary care physicians for two years; A one percentage point federal medical assistance percentages (FMAP) increase for Medicaid preven- • tive services recommended by the US Preventive Services Task Force and immunizations for adults (if offered with no cost sharing);
Ninety percent Federal Medical Assistance Percentages (FMAP) support for a new state plan option • to establish health homes for Medicaid beneficiaries with chronic conditions for two years; and Creation of new CMS Innovation Center to test innovative payment and service delivery models. • ACA also included substantial assistance for federally funded community health centers. $11 billion iew funding for the Health Centers program over five years; $9.5 billion for broad • health center expansion and $1.5 billion for capital needs; $1.5 billion over five years for the National Health Service Corps
Organization and Quality
There is a growing body of evidence published in the peer-reviewed literature that more organization is associated with higher quality. Beginning with the most basic level of organization—the formation of groups of physicians—large group practices perform better than solo practices. For example, large practices are twice as likely as small groups or solo practitioners to engage in quality improvement and utilize electronic medical records. They are also more likely to practice in teams, use performance and outcome measurement for quality improvement purposes, and provide preventive services than solo practitioners or small groups. Group practices have achieved better health outcomes as well: they have been shown to achieve lower mortality in their heart attack care than solo practices. Further, physicians in group practices perform better on recertification tests than those in solo practice. Maintenance of board certification is voluntary, but there is evidence that certification correlates with better quality and outcomes and more reliable care, higher rates of preventive services, lower mortality in myocardial infarction and colon resection, and fewer low birth weight babies.
There is also evidence that relationships among groups are important. For example, physician group affiliation with networks is associated with higher quality, with the impact greatest among small physician groups. Independent practice associations (IPAs) are twice as likely to use effective care management processes as small groups with no IPA affiliation.
Finally, there is evidence that full integration may lead to even higher performance. For example, integrated medical groups in California achieve a higher level of clinical quality than IPAs. Leaders of integrated medical groups are more likely than IPAs to report using electronic medical records, following quality improvement strategies, and collecting patient satisfaction data. Medical groups are also four times more likely than IPAs to offer health promotion programs. Health maintenance organizations (HMOs) with group or staff model physiciaetworks (i.e., large networks in which the physicians are employees or members of a partnership) tend to have higher performance on clinical measures than HMOs with independent physiciaetworks.
Organization and Efficiency
There are few studies focusing on the relationship between organization and efficiency. Older studies have demonstrated that costs are about 25 percent lower in prepaid group practices than in other types of health plans, and a study of eight large, prepaid group practices found a physician-to-population ratio of 22 to 37 percent below the national rate. A more recent study revealed that chronically ill Medicare patients in integrated delivery systems use significantly fewer patient resources in the last 24 months of life, compared with the national average, including fewer hospital days and ICU days. Total physician and hospital spending for patients in organized systems were 24 percent and 2 percent less, respectively, than other practices.
There has been more research showing that health care systems that emphasize primary care provide better outcomes at lower cost. In such systems, including prepaid group practices and integrated delivery systems with fee-for-service payer environments, Medicare beneficiaries have more visits with primary care physicians and fewer visits with specialists for each episode of care, spend fewer days in intensive care, and incur lower health care costs. A study comparing Kaiser Permanente to the British National Health Service illustrates this connection between primary care and efficiency. The study found that Kaiser achieved better performance outcomes in several areas for approximately the same cost per person. The authors attributed Kaiser’s superior efficiency to “integration throughout the system.”
Organization and Patient Experiences
Most studies show that, on average, prepaid group practices perform worse on measures of patient satisfaction than fee-for-service health plans. It is difficult to tease out whether this is related to the insurance function of prepaid group practices, or to characteristics inherent to organized delivery systems. In more recent cases, large group practices (e.g., Harvard Vanguard Medical Associates in Massachusetts) have achieved high performance on measures of patient satisfaction, demonstrating that it is possible for organized systems to excel in this area. Integrated systems are more likely than solo practitioners to collect data on patient experiences and to base physician bonuses on patient satisfaction.
A recent study by the Pacific Business Group on Health found that an intervention focused on improving doctor–patient communication, coordination of care, and access to care led to improvements in patient experience scores for communication and coordination of care items. This suggests that organized care settings can improve patients’ satisfaction by focusing on provision of patient-centered care.
Finally, there is evidence that patients desire more organized care, at least in theory. According to The Commonwealth Fund Survey of Public Views of The U.S. Health Care System, 68 percent of Americans believe that patient care would improve if physicians practiced in groups, rather than on their own.
V. TRENDS IN PHYSICIAN ORGANIZATION
Despite evidence that greater organization is associated with better quality and, to a lesser extent, greater efficiency, physicians have not been migrating toward more organized systems. For their part, patients generally have not been seeking out or demanding care from organized delivery systems. The proportion of physicians in small practices (with one to five physicians) is dropping. Yet, doctors are migrating toward mid-sized, single-specialty groups in which they caegotiate higher payments, concentrate capital, and selectively provide services that garner higher profit margins, rather than toward large, multi-specialty group practices or integrated delivery systems.
During the height of managed care in the mid-1990s, physicians began to aggregate into larger multi-specialty groups, independent physician associations, or physician-hospital organizations to achieve economies of scale and take advantage of The referral benefits of having primary care physicians within the organization. At the time, large multi-specialty group practices experienced a number of advantages over other, smaller practices, including leverage with health plans and hospitals, economies of scale, improved physician lifestyle, and improved quality of care.
While the general population reported fairly high levels of satisfaction under managed care, those with chronic illnesses (with greater exposure to utilization management) were much less satisfied with their care, compared with the prior fee-for-service environment. However, satisfaction varied with factors such as ownership status (i.e., nonprofit versus for-profit) and plan type (i.e., staff model versus discounted fee-for-service). By the late 1990s, initial consumer support for managed care, particularly the more restrictive forms, had declined as consumers worried that needed care might be withheld and wanted greater control over the health care options available to them. Researchers found that patients in managed care plans valued their primary care provider’s role as care coordinators, but wanted them to refrain from acting as gatekeepers to specialty care. Employers began to demand broad, almost universal choice among providers. The backlash resulted in marketplace, legislative, and legal reactions that altered the operations of most managed care organizations and HMOs.
As managed care organizations and health plans reduced cost containment restrictions, large multi-specialty groups, IPAs, and physician-hospital organizations lost many of The advantages that had brought them together in the mid-1990s. Physicians became more distant from hospitals and many stopped providing services they had provided traditionally, including emergency department call and service on hospital committees.
On its own, the consumer backlash against managed care does not account for the increase of mid-sized single-specialty practices rather than larger, multi-specialty groups. Practice costs increased over this time but payment rates did not follow, creating incentives for physicians with fee-for-service payments to provide additional services and emphasize technology-dependent procedures rather than cognitive services. Other barriers to the success of integrated systems include failure to manage costs, conflicts between primary care providers and specialists, and uneven regulatory environments that place a greater burden on HMOs than on fee-for-service plans. Purchasers are also partially responsible for the limited presence of large multi-specialty group practices and integrated systems. Few employers provide incentives that would lead employees to choose more integrated systems.
Despite the trend of physicians moving away from organized delivery systems, some high-performing organized systems have created an attractive work environment for physicians. For example, Kaiser Permanente reports having many more physician applicants than open positions, and is now considered a desirable place to work among physicians completing residency training.
Similarly, although patients have not been demanding care from organized delivery systems, it is clear that attributes of high-performing organized delivery systems, such as care coordination and widespread adoption of electronic medical records, are desired by patients. In addition, as noted above, some large group practices, such as Harvard Vanguard Medical Associates, have excelled in measures of patient experience. As we seek to create an environment that stimulates organization for high performance, it is important to derive lessons from these experiences to build support for organized delivery systems among providers and patients.
VI. HOW WILL WE GET THE CARE WE WANT?
In order to get the care we want, our fragmented health care system needs to be fixed. We have identified the key attributes of an ideal health care delivery system and demonstrated that more organization, while it may take diverse forms, is required to achieve them. At the same time, organization alone is inadequate to ensure high performance, especially in terms of efficiency and patients’ experiences. Therefore, policy interventions should focus on stimulating organization as an explicit path toward high performance. The policies fall into the following categories:
Provider payment reform• : Financial incentives are a powerful lever for changing provider behavior. For example, the introduction of the diagnosis-related group prospective payment system for hospitals resulted in a marked decrease in severity-adjusted length of stay overall. The predominant fee-for-service payment system facilitates our fragmented delivery system; financial incentives do not reward care coordination, efficiency, or high-value care (see box). As a result, it often acts as a barrier to greater organization and more coordinated and efficient care delivery.
Patient incentives:• Financial incentives are also a powerful lever for changing patients’ behavior. For example, payer interventions such as provider-tiering (in which insurers offer lower copayments to encourage patients to choose providers deemed to be of higher value) and network narrowing (removing lower-quality or lower-value providers from a network) have been effective at getting enrollees to change providers. Currently, there are limited incentives to encourage patients to choose high-performing organized delivery systems.
Regulatory changes: • The regulatory environment can either facilitate or act as a barrier to certain types of delivery system organization. The current regulatory environment does not encourage hospital–physician integration.
Accreditation:• Accreditation programs may stimulate the growth of organized delivery systems as well as improve their performance, particularly if payers take these programs into account when making purchasing decisions.
Government infrastructure support: • Even with appropriate incentives in place, there will be areas, particularly rural areas and other regions where small independent practices predominate, or for specific populations, in which formal organized delivery systems may not emerge. In such areas, government could facilitate the creation of shared organized delivery system infrastructure such as health information technology, performance improvement activities, care coordinatioetworks, care management services, and 24/7 access to services.
Provider training:• Educational programs, including physician and other health professional training and continuing education, develop or enhance provider competencies. Currently, most programs do not teach providers how to successfully practice as part of an organized system. Rather, they tend to focus on silos in care (e.g., inpatient care). They do not emphasize competencies in skills such as coordinating care or working as part of a comprehensive care team.
Promoting health information technology: Because the use of interoperable electronic health records is an important aspect of an organized delivery system, it may be reasonable to consider policy strategies that specifically encourage the adoption of EHRs as part of an overall strategy to promote organized delivery systems.
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Evaluating the Policy Options
In Exhibit 3, we examine policy options within each of the categories of policy levers. We discuss why each policy option would promote greater organization, highlight the pros and cons of each approach, and identify important issues that must be addressed. In Exhibit 4, we estimate the potential impact of each policy option on the six key attributes of an ideal delivery system. The estimated impacts of the policies noted in Exhibits 3 and 4 are not precise projections but instead indicate relative magnitudes of effect based on our expert opinion, experience, and evidence where available. In Exhibit 5, we estimate the impact that each policy option would have in terms of stimulating the models of organization that we have identified as capable of achieving the attributes of an ideal delivery system.
Overall, it is apparent from our analysis that there are several potentially effective policy approaches to stimulate organization for high performance, yet all entail significant challenges. In addition, it is clear that no single policy lever or approach will stimulate all six desired attributes. Further, we find that the different policy levers would have differential impacts in terms of stimulating the various models of organization.
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POLICY RECOMMENDATIONS
The Commission on a High Performance Health System believes that addressing the fragmentation of the U.S. health care delivery system is a critical element of health reform, one that is necessary to achieve transformational gains in the quality and value of care. The goal of our policy recommendations is to stimulate greater organization of the delivery system to achieve high performance. In making the recommendations, we are guided by two overarching principles:
1. the policies should move the system toward achievement of the attributes of the ideal delivery system we have identified; and
2. the policies should allow for diverse models of organizational structure that might achieve those attributes, explicitly recognizing that different regions of the country may require different models of organization.
No single policy lever or option will fix the fragmentation of our health care system. Rather, a comprehensive approach is required—one that might lead progressively over time to greater organization of the health care system and better performance. We recommend the following strategies:
Payment Reform. Provider payment reform offers the opportunity to stimulate greater organization, as well as higher performance. The predominant fee-for-service payment system supports the fragmentation of our delivery system. We recommend that payers move away from fee-for-service toward more bundled payment systems that reward coordinated, high-value care. In addition, we call for expanded pay-for-performance programs to reward high-quality, patient-centered care. Specifically, we believe that:
· Full population prepayment to organized delivery systems should be encouraged; that o is, a single payment should cover the full continuum of services of a given patient population for a period of time. This payment should be adequately risk-adjusted to avoid adverse patient selection. If full population prepayment is not feasible, payers should encourage:
o Global case payments for acute hospitalizations. Ideally, these payments should bundle all related medical services from the initial hospitalization to a defined period post-hospitalization (including preventable rehospitalizations). These payments should be risk-adjusted to avoid adverse patient selection.
o Alternative payment structures for primary care. Primary care practices that provide comprehensive, coordinated, patient-centered care (e.g., certified medical homes) should be offered an alternative to fee-for-service payments. Two promising alternatives include comprehensive prepayment for primary care services, or fee-for-service plus a per-patient care management fee.
· Pay-for-performance should be expanded. The more bundled the payment mechanism, of the higher proportion of the payment should be tied to performance. These programs should migrate away from measures that focus on individual processes in a single provider setting (e.g., hemoglobin A1C testing rates for patients with diabetes) toward broader measures of quality, such as patient clinical outcomes (e.g., blood pressure control or hospital readmission rates), care coordination, and patient experience.
· Medicare should support demonstration projects that test innovations in payment o design and care delivery.
Patient Incentives. Patients should be given incentives to choose to receive care from high-quality, high-value delivery systems. This would require performance measurement systems that adequately distinguish differences among delivery systems.
Regulatory Changes. The current regulatory environment should be modified to better facilitate clinical integration between providers.
Accreditation. There should be accreditation programs that focus on the six attributes of an ideal delivery system we have identified. Payers and consumers should be encouraged to base payment and participating provider network decisions on such information, in tandem with performance measurement data.
Provider Training. Current provider training programs for physicians and other health professionals do not adequately prepare providers to practice in an organized delivery system or team-based environment. Provider training programs should be required to teach systems-based skills and competencies, including population health, and be encouraged to include clinical training in organized delivery system environments.
Government Infrastructure Support. We recognize that, in certain regions or for specific populations, formal organized delivery systems may not develop. In such instances, we support an increased government role in facilitating or establishing the infrastructure for an organized delivery system, such as assistance with establishing care coordinatioetworks, care management services, after-hours coverage, health information technology, and performance improvement activities.
Health Information Technology. Health information technology provides critical infrastructure for an organized delivery system. Providers should be required to implement and utilize certified electronic health records that meet functionality, interoperability, and security standards, and to participate in health information exchange within five years.
CONCLUSION
Our fragmented health care system delivers poor-quality, high-cost care. We cannot achieve a higher-performing health system without reorganization at the practice, community, and national levels. This report focuses on the community level, where we need delivery systems with the following attributes:
1. Patients’ clinically relevant information is available to all providers at the point of care and to patients through electronic health record systems.
2. Patient care is coordinated among multiple providers and care transitions across settings are actively managed.
3. Providers (including nurses and other members of the care team) both within and across settings have accountability to one another, review one another’s work, and work together to reliably deliver high-quality, high-value care.
4. Patients have easy access to appropriate care and information, including after hours; there are multiple points of entry to the system; and providers are culturally competent and responsive to the needs of patients.
5. There is clear accountability for the total care of the patient.
6. The system is continuously innovating in order to improve the quality, value, and patients’ experiences of health care delivery.
This vision of health care delivery is not out-of-reach. We have demonstrated that some delivery systems have achieved these attributes, and they have done so in a variety of ways, ranging from fully integrated delivery systems to looser networks of providers created by private entities (e.g., Hill Physicians Independent Practice Association) or public–private partnerships (e.g., Community Care of North Carolina). The Commission’s policy recommendations are intended to promote the spread of organized delivery systems as a path toward high performance, while acknowledging the different forms such systems can take.
It is important to recognize that, beyond the Commission’s policy recommendations, other actions should be taken. If adopted, the policies would create an environment that would foster and promote organization for high performance. However, the policies would not teach delivery systems how to get there. Research is needed to learn about the organizational leadership and culture required to assist providers as they move toward greater organization. Research is also needed to explore the types of organized delivery systems that are most appropriate for different regions of the country. We also need to learn more about how these systems can interact optimally with public health systems and communities at large; this is critical, given the importance of preventive medicine and public health in determining overall population health. Such activities are beyond the scope of the policy recommendations included here, but should be addressed by strong and coordinated leadership.
We cao longer afford, nor should we tolerate, the outcomes of our fragmented U.S. health care system. We need to move away from our cottage industry, where providers have no relationship with, or accountability to, one another. Though we acknowledge that moving toward a more organized delivery system will be complex and difficult, the recommendations of the Commission put forth in this report offer a concrete approach to stimulate organization for high performance.
MANAGED CARE HEALTH PLANS
What is Managed Care Plan?
Managed care plan is a variety of techniques that is designed to help reduce the cost of providing improved quality of care and health benefits to organizations. The techniques that may be used are as follow: providing economic incentives for physicians; increase in the cost of beneficiary sharing; establishing cost-sharing incentives for outpatient surgery, intensifying management of high-cost health care cases and controlling inpatient admissions and their length of stay.
Health Maintenance Organization Act of 1973
I. BACKGROUND
Health care delivery in the United States has long been described as a “cottage industry,” characterized by fragmentation at the national, state, community, and practice levels. Despite the federal government’s role as the single largest payer for health care, there is no national entity or set of policies guiding the health care system. States divide their responsibilities among multiple agencies, while providers practicing in the same community and caring for the same patients often work independently from one another. Furthermore, the fragile primary care system is on the verge of collapse. This report focuses on the organization of health care delivery at the local level, considering the relationships among physicians, hospitals, and other providers in a community. Not surprisingly, fragmentation at this level is often reflected in patients’ experiences, as illustrated in the fictional cases that follow:
Frank, a 67-year-old male with Medicare fee-for-service coverage, was admitted to the hospital for an acute exacerbation of heart failure. During the week following his discharge, he tried to schedule a visit with his primary care physician (PCP), as he thinks he was told to by the hospital staff, but he somehow let it slip. Six weeks after he left the hospital, his shortness of breath was getting worse—he could barely make it across his bedroom without stopping to rest, and stairs were out of the question. During Frank’s first post-hospital visit with his PCP, she could not find a copy of his hospital discharge summary in the stack of papers that make up his chart. When Frank shows her the medications he was discharged with, she becomes frustrated and worried because she cannot reconcile them with the medications from her primary care clinic’s chart. Fearing that she cannot safely stabilize Frank at this point, she chooses to readmit him to the hospital.
There are two clear shortfalls in Frank’s case: the lack of care coordination and support as Frank made the transition from hospital to home, and the information gaps in the paper medical records in his PCP’s office. Although discouraging, Frank’s case is typical. Among Medicare beneficiaries, 17.6 percent of hospitalizations result in a readmission within 30 days and, of those, about 75 percent are potentially preventable. Hospitals only provide a simple intervention—giving written discharge instructions for heart failure patients—to about two-thirds of U.S. patients; far fewer hospitals provide a full care transition program. The lack of coordination between hospitals and ambulatory care teams is exacerbated by the scarcity of electronic medical records, making tasks such as medication reconciliation more difficult. As of early 2008, less than 15 percent of physicians used electronic medical records in ambulatory care settings.
Sally is a 42-year-old woman with type 2 diabetes who faithfully sees her internist several times a year. Each time, she complains of a new ache or pain, which then becomes the focus of the visit. Her doctor is a solo practitioner, whose primary interactions with other physicians are during occasional grand rounds and medical staff meetings at the local hospital and a week-long educational conference every few years. One day, the doctor receives a letter from Sally’s insurance company saying that, in the past two years, she has not had several of the screening tests that are recommended for diabetics, including screenings for kidney and eye disease that can be long-term complications of diabetes. The doctor knew that these were recommended tests for patients with diabetes. When he reviewed Sally’s medical record, it took him 15 minutes to confirm that she in fact had not had these tests in over two years.
Sally’s doctor is trying his best, and his knowledge of the basic management of diabetes is up-to-date. Yet, he missed two important tests for Sally—a common occurrence. According to data published in 2006, among commercially insured diabetes patients, only 55 percent had the recommended eye exams or tests for kidney complications. The critical factor in this doctor’s error of omission is that he did not have a system in place for tracking and delivering appropriate care. This could have been addressed by participation in a quality improvement initiative, or implementation of an electronic medical record system with disease registries, care reminders, and clinical decision support. However, as a solo practitioner, this doctor is markedly less likely to take either of these steps than are physicians in larger practices.
Trent is a 33-year-old investment banker who, apart from mild asthma, is fit and healthy. His asthma is usually well controlled with inhaled steroids and the use of his rescue inhaler about once a week. This winter, he caught a cold that had been going around his office, exacerbating the symptoms of his asthma. Although he could get by, he was very uncomfortable and relied on his rescue inhaler every four hours. He phoned his doctor’s office to try to get an appointment after work or on Saturday, but was frustrated because there was a wait of a few weeks for the limited times that the office had after-hours appointments. This being a very busy time at work, he didn’t want to take sick time to see his doctor during regular office hours, so he decided to “ride it out.” However, by Sunday, he had become increasingly uncomfortable. He tried calling his doctor’s office for advice, but he got an answering machine directing him to the emergency room for “medical emergencies.” Trent was not sure this qualified but, not knowing what else to do, he went to his local hospital’s emergency room. After waiting five hours to see a doctor, he was treated with an albuterol nebulizer, given a prescription for oral steroids, and sent home.
Like Frank and Sally, Trent’s experience is not uncommon. A recent survey of health care experiences found that 60 percent of U.S. patients found it difficult or very difficult to get care on nights, weekends, or holidays without going to the emergency room. Although Trent did not end up hospitalized, this happens frequently among more fragile patients who do not have optimal care management and access to ambulatory services. The frequency of such “ambulatory care–sensitive” hospital admissions varies widely across the United States. For example, there is a fourfold difference between the top-performing and bottom-performing states in rates of admission for pediatric asthma, suggesting that many of these admissions could be prevented.
These three cases illustrate some of the shortfalls in our health care delivery system, reflecting its fragmentation and disorganization. If this is not how we want health care to be delivered, what do we want and how will we get it?
This is more popularly known as the HMO Act of 1973 which was passed as a result of the discussions conducted in the Congress of the United States with Paul Ellwood. This Act provided loans and grants to help begin, provide and expand the Health Maintenance Organizations of the country. The number of employees that can take advantage of this service was reduced to 25 and certain state restrictions were also removed. This further solidified the offers of HMO and provided HMO a greater access to different employers of the market.
Typical Managed Care Techniques
The most significant characteristic of managed care is the use of network or panel of health care providers which can assist the listed and approved enrollees. It shares the following integrated delivery systems:
1. It has explicit standards for the selected health care providers.
2. It emphasizes on preventive care.
3. It provides financial incentives to further encourage the efficiently use the services offered by the managed care organization.
4. It has a selected list of health care providers that provides a comprehensive array of health care services to its enrollees.
5. It has a regular set of formal utilization review that aims to help improve the quality of its programs.
Different types of Organization which Offers Managed Care Plan Health Maintenance Organization (HMO)
This is the most inexpensive and basic type of health maintenance organization which provides basic healthcare coverage to its members. It has attracted many small businesses because of its relative affordability without compromising the services of its enrollees. In this type of managed care plan, the enrollees are given the liberty to choose a primary care physician (PCP) who is tasked to take care of all the basic needs of the enrollees. The task of the PCP is to coordinate the member’s care and for him to provide referrals to other specialists who can assist the health care needs of the enrollees.
Point of Service Plan (POS)
This is more comprehensive in comparison to an HMO plan. This is offered by companies and business owners to cater to the needs of its employees who seek aid of physicians who are outside of the health plan’s network. Through this managed care plan, the enrollee is still expected to choose a PCP who will handle and coordinate the health care services needed by the enrollee but it is not limited to health care providers of the managed care plan organization.
Preferred Provider Organization (PPO)
This is the most comprehensive type of managed care plan which gives utmost liberty to its enrollees in selecting health care providers. Enrollees are given freedom to choose services either from inside or outside health plaetworks but of course the payment for out-of-network services is still higher.
Managed care is a method of delivering health care through a system of network providers. There are differences in the premiums and co-payment amounts among the managed care health plans offered; however, these plans provide comprehensive medical benefits at lower out-of-pocket cost by utilizing network providers. Managed care health plans coordinate all aspects of a Plan Participant’s health care including medical, prescription drugs and behavioral health services. An annual $50 prescription deductible is applied for each individual covered on the plan each plan year.
Members who enroll in a managed care health plan must select a Primary Care Physician or Provider (PCP) from the managed care health plan provider directory or website. Always contact the physician’s office or managed care health plan administrator to find out if the PCP is accepting new patients. Special attention should be given to these participating physicians and hospitals, which Members are required to use for maximum benefits.
If the designated PCP leaves the HMO network, there are three options:
· Choose another PCP with that plan,
· Change managed care health plans, or
· Enroll in the QCHP indemnity plan.
This opportunity to change health plans applies only to the PCP leaving the network. It does not apply to hospitals, specialists or women’s healthcare providers who are not the designated PCP.
Members are notified in writing by the managed care health plan administrator when a PCP network change occurs. Members have 60 days to select a new PCP or make a health plan change.
There may be managed care health plans that are self insured and administered by the State of Illinois, meaning all claims are paid by the State of Illinois even though managed care health plan benefits apply. The plans are not regulated by the Illinois Department of Insurance and are not governed by the Employees Retirement Income Security Act (ERISA).
In order to have the most detailed information regarding a particular managed care health plan, you may ask to receive a plan’s Summary Plan Description (SPD) which describes the covered services, benefits levels and exclusions and limitations of the plan’s coverage. The SPD may also be referred to as the Certificate of Coverage or the Summary Plan Document.
Pay particular attention to the health plan’s exclusions and limitations. It is important that you understand what services are not covered under the plan. If you decide to enroll in a managed care health plan, it is essential that you read your SPD before you need medical attention. It is your responsibility to become familiar with all of the specific requirements of your health plan.
In most cases a referral for specialty care will be restricted to those services and providers authorized by the designated PCP. In some cases, referrals may also require pre-approval from the managed care health plan. To receive the maximum hospital benefit, your PCP or specialist must have admitting privileges to a network hospital.
For complete information on specific plan coverage or provider network, contact the managed care health plan and review the SPD.
NOTE: Managed care health plan provider networks are subject to change. Always call the respective plan administrator for the most up-to-date information.
Health Maintenance Organization (HMO)
HMO Members must choose a Primary Care Physician or Provider (PCP) who coordinates the medical care, hospitalizations and referrals for specialty care.
HMOs are restricted to operating only in certain counties and zip codes called service areas. There is no coverage outside these service areas unless pre-approved by the HMO. When traveling outside of the health plan’s service area, coverage is limited to life-threatening emergency services. For specific information regarding out-of-area services or emergencies, call the HMO.
Like any health plan, HMOs have plan limitations including geographic availability and limited provider networks. Most managed care health plans impose benefit limitations on a plan year basis (July 1 through June 30); however, some managed care health plans impose benefit limitations on a calendar year basis (January 1 through December 31). Contact the managed care health plan for additional information.
NOTE: When a managed care health plan is the secondary plan and the Plan Participant does not utilize the managed care health plaetwork of providers or does not obtain the required referral, the managed care health plan is not required to pay for services. Refer to the plan’s SPD for additional information.
Polісy reсommendations
Promote a flexible payment reform strategy in public programs The federal government and commercial payers should support flexible payment strategies that reward providers for forming more organized groups and accepting payment systems such as robust pay for performance, case rates, and improved capitation.
The federal government and commercial payers can improve fee-for-service payment approaches, not only to encourage a better mix of services, but also to promote conditions that are more conducive to the development of provider organizations. Certain conditions can give physicians increased reason to see participation in organized groups as the best approach to responding to the altered payment incentives, such as reducing the current distortions in public and private fee schedules that promote procedures and tests, rather than patient-centeredness and care management.
It is clear that a “one size fits all” payment strategy no longer serves the diverse types of provider organization. The current fee-for-service approach is the lowest common denominator and not appropriate to support the efforts of organized systems. The federal government will therefore need to make significant investments in moving providers toward more evolved payment systems.
Medicare is a good place to start because its fee schedule guides private payers and Medicaid programs, who would likely follow a major effort into alter the current basis for setting fee-for-service payments (see chapter 4 on payment reform for details).
The federal government should also set expenditure targets for fee-for-service payments that lack incentives for quality and efficiency, except in health professional shortage areas. Organized groups would be held accountable for group-specific performance on cost, quality, and patient experience and therefore should be exempted from the cruder expendi -ture controls that would apply to unaffiliated physicians. The federal gov -ernment can also increase the potential financial reward to providers in roportion to their willingness to accept financial risk. For example, case rates or capitation-based contracts should offer providers the potential to achieve margins greater than inflation if these providers are creative and effective in improving quality and efficiency.
Payment approaches to hospitals should be modified to promote align-ment with physician incentives, which would encourage the development of hospital-physician organizations functioning as self-contained inte -grated, delivery systems.
For example, bundling physician and hospital services—and perhaps post-acute care services, such as skilled nursing for discrete episodes of care—would reward efforts to develop integrated sys -tems and lay the ground for movement to more fully developed case rates and, ultimately, capitation. e ncourage adoption of information technologies
The federal government should promote national initiatives to make infor -mation technologies more widespread, especially electronic medical records
in physician offices (see chapter 2 on infrastructure for more detail on infor -mation technology recommendations). These initiatives should include
financial support for providers combined with mandates for adoption.
The government might arrange for long-term loans to help finance infra-structure enhancements, especially the adoption of electronic medical
records, and in some cases, short-term loans to manage cash flow dur -ing the often-difficult practice transformation. Enhanced information tech -nologies will make it much easier for organized systems to incorporate
geographically dispersed, but community-based, small practices into their
groups, thereby combining organized systems’ ability to manage cost and
quality while supporting the patient-centered attitudes that community-based small practices often display.
Open Access Plan (OAP)
The Open Access Plan combines similar benefits of HMOs and traditional health coverage. The Plan offers two managed care networks, Tier I and Tier II. Enhanced benefits are available by utilizing providers in Tier I and II. In addition, Tier III benefits (out-of-network) are available, so Plan Participants can have flexibility in selecting health care providers. The provider and tier selected for each service determine the level of benefits available.
The OAP allows Plan Participants to mix and match providers. For example, the Plan Participant can utilize a Tier II physician and receive care at a Tier I hospital. The OAP Plan Administrator can provide a directory that contains listings of the Tier I and Tier II networks. The benefit level for services rendered will be the highest if selecting Tier I providers.
· Tier I is often a 100% benefit after a co-payment.
· Tier II is generally a 90% benefit with a 10% coinsurance after the annual plan deductible is met.
· Tier III (out-of-network) is generally paid at 80% of the Usual and Customary (U&C) charges after the annual plan deductible is met.
