With the rising interest in accountable care organizations, this might be a good time to take a closer look at how integrated healthcare systems represent a departure from traditional healthcare.
"Integrated health systems are set up to do things differently in a way that makes sense to them, but doesn't make sense to anybody else," Dr. Jason Hwang, executive director of Innosight Institute, a nonprofit think tank focused on healthcare and innovation, told FierceHealthcare. They deliver care at high quality, but still keep costs low.
Their worldview is totally different. "For them, a patient entering a hospital is not a revenue opportunity, it's a loss," he said. Such systems align incentives better and remove all the antagonistic relationships that currently exist, pitting insurer against hospital against medical group, with the patient stuck in the middle.
The problem with the current business model, he said, is that it's almost set up to fail. Hospitals focus on delivering acute care, not necessarily focusing on the overall health of the person. Health plans hone in on reducing medical liabilities, not necessarily protecting the wellness of the patient. "Everybody has these incentives that aren't fully aligned," he said. "The only way to align businesses that have these antagonistic relationships or opposing viewpoints is to integrate across those barriers."
After studying integrated health systems, Hwang contends that one with all those parts under one umbrella--a hospital, medical group and health plan--can truly behave differently from an organization where all parts remain separate.
The most important hurdle for those who want to create an integrated health system, he said, is to fold in the health plan so those dollars are taken into consideration at the same time as quality of care.
It's no mean feat getting all components of a health system working in concert. Hwang has visited many health systems, and while a good number contain all the pieces of an integrated system, they don't encourage patients to enroll in the narrow network. In essence, they don't promote an integrated product. Red flags for these not truly integrated systems include marketing that isn't coordinated. While one name is given to the health plan, while the hospital gets a different name. The separate components work as three separate lines of business.
"Today for the most part, those decisions [relating to spending and quality of care] are made separately, creating a very antagonistic relationship," Hwang said. A health plan, for example, may not see the wisdom in investing in prevention or screenings. It doesn't affect them from a cost cutting standpoint, because the benefits of screenings for something like heart disease or cancer don't become apparent until 20 or 30 years down the line. The most likely beneficiary would be Medicare. Plus patients switch health plans every three to five years, so insurers will not likely benefit from promoting screenings, although they may push them for moral reasons.
Integrated health systems have actually promoted aspects of healthcare that often go ignored. Some integrated systems are quite aggressive in addressing mental health issues before they explode, Hwang noted.
Closing population health disparities is another example. Recent immigrants, inner city dwellers or rural residents don't get access to the same care as others. While it's not to the advantage of business, like a health plan, to treat these people or invest in translators to close the gaps, at Kaiser Permanente, which has a lot of Spanish speaking residents in their neighborhoods who resist seeking care, they've taken a different tack. Because it makes no sense to let people wait until they're so sick they show up in a hospital, Kaiser uses promotoras, or lay people, who speak the same language and have the same conditions to educate their peers.
Why, though, would health plans that are part of integrated health systems want to go along with programs that perhaps help patients, but don't necessarily cut costs? Historically, being a private insurer that does little but deny care has traditionally been a good business, Hwang allowed. "But it's also a tough business," he said, referring to "Deadly Spin", former CIGNA executive Wendell Potter's book on the seamy underside of the insurance industry. "There's a lot of guilt there about what that business does."
Plus, Hwang said, from a financial perspective, whatever integrated systems do that make sense for their patients is good for their bottom line. As a prepaid system, they have to keep their members happy in order to collect those payments year after year. "Denying care," said Hwang, "is not the path to keeping business." - Sandra