Health care report 2012: Decentralization viabilityHealth systems in the midstate have been adding locations away from hub of operations
Business strategy guided by consumer demand and technology is not new to most industries.
Yet for the health care market, both are relatively recent drivers in planning and meeting ongoing challenges.
Those forces are causing health systems and businesses to become decentralized: moving their services out into the community rather than saturating a large campus with all of their offerings.
“People want to relate to primary care providers in their own communities,” said Jennifer Englerth, chief executive director for York-based Family First Health. “It’s not only a burden to drive a long distance, but patients might also then feel like the provider doesn’t know them or know the community.”
Basic needs such as primary care, diagnostics and laboratory services should be as convenient for people to visit as possible, she said.
Ease of receiving care also has spurred the slow spread of health systems across geography, said Sally Dixon, CEO of Memorial Hospital, based in Spring Garden Township, York County.
“They don’t want to have to wait, they don’t want to have to get wound up in a large system,” she said. “When people come to a hospital, they go through a large registration process and are mixed in with very sick people when they may not really be sick. They want fast and focused on their specific needs at that point in time.”
While more affordable, basic care is creeping farther from health system centers, core services with the most expensive equipment and highest level of medical expertise will stay centralized, she said.
General ancillary services such as CT scans, X-rays and ultrasounds can and should be deployed throughout the community a health care system operates in, said Jan Bergen, executive vice president of Lancaster General Health and president of the Lancaster General Health Network. LG Health works to distribute its basic services using a 10-minute access rule, she said.
Medical equipment is more affordable and accessible, also allowing outpatient centers to move into the community, she said.
A step above the basic access is specialized services, such as outpatient surgery or physician specialists, she said. Though they aren’t placed in as many locations as those for general care, LG Health looks at having a small number of those around the community, she said.
For inpatient services or particular surgeries, LG Health believes it needs to be more purposeful in staying centralized because of the large costs, staff expertise, patient safety levels and financial implications, she said.
“It’s more acceptable for a patient to travel to a hospital, because they realize they’re going there for the expertise and resources,” Bergen said.
Some of the decentralization of health systems also has been driven by capturing more market share, Dixon said.
Expanding services via mergers and acquisitions has been a trend throughout the midstate and the nation. Purchasing or partnering with health providers has been caused mainly by financial concerns and care coordination, not to gain geography, Bergen said.
However, gaining more patient volume and a larger coverage area has been a “secondary implication,” she said.
It would seem that opening more service locations, whether for outpatient surgery, primary care or diagnostic needs, would be more costly than keeping them at a central campus, said Bruce Bartels, president of York Township-based WellSpan Health.
However, hospital infrastructure is very expensive and adding square footage to separate facilities or leasing space can be more economical than adding to a main site, he said.
Ambulatory services, where patients can walk in and walk out within a few hours, actually help to decrease costs, because the services are less costly than the same procedure might be in a hospital, he said.
Health providers are being smart about where they open locations in communities, LG Health’s Bergen said.
Rather than shifting business, health systems need to add to their revenue base to absorb the cost of the new locations, she said.
When the Lancaster-based health organization opened urgent care centers around three years ago, they shifted about 1.5 percent of emergency room visits for nonurgent needs, she said.
“We’ve also been caring for more patients who do not have a primary care physician and are not receiving regular medical care; so we are meeting the needs of that new patient base,” she said.
Sometimes, patient volume is not large enough to support bringing services into a certain community, she said.
Care quality under decentralization
As an industry, health care providers had thought quality would be easier to achieve with the economy of scale in centralized services, Englerth of Family First said.
“What happened is that the patient experience started dropping off, health outcomes started dropping off, preventative measures started dropping off,” she said. “The scale becomes difficult to manage.”
Having the same standards and guidelines applied to each operated site helps to maintain consistency for quality, said Richard Schaffner, chief operating officer of Cumberland County-based Holy Spirit Health System.
Ongoing efforts to improve quality measures across the country, instituted by both the government and private insurers, continue to keep health systems focused on care, said William Pugh, chief financial officer of Harrisburg-based PinnacleHealth System.
Rewarding for quality outcomes via reimbursement methods is becoming more of the norm, thus incentivizing health care providers to keep quality standards high within the decentralization trend, he said.
Decentralization has been made possible by the advancement of technology, said James Wissler, president and CEO of Hanover Hospital.
“I think the technology today allows you to have the information and the data from various sources all sent back into your central system so that you can monitor not only the clinical quality but the patient satisfaction,” he said.
The ease of getting information regardless of where the care is being delivered creates more seamless care than ever before, he said.
Making medical records available via secure networks has made it easier for patients and doctors alike to access the information, said Steven Roth, chief information officer at PinnacleHealth.
Physicians can access a patient’s medical record from anywhere with an Internet connection, he said, using a two-pronged identification process for security.
In some rural locations, that can be a challenge without the ability to connect to a network, he said.
Patients also can access their health information at many health care systems via an online portal, he said. They can email questions to their physician, read their plan of care, view test results and fill prescriptions electronically, he said.
Technology also has opened doors for patients to receive specialized services in a setting that wouldn’t usually have that option, Roth said. In a rural hospital, a physician could remotely diagnose cardiac or stroke services needed, he said.
There also is emerging technology for at-home monitoring, Schaffner of Holy Spirit said.
As a part of the health system’s home health program, a team will set up monitors in a patient’s home, such as a scale, blood pressure monitor or respiratory monitors, he said. The information is communicated electronically to the home health office.
“If we hear or notice there’s issues, we can actually see what’s happening with them and expedite their care as needed,” Schaffner said.
Monitoring health via phone or technology is known as telehealth, Wissler of Hanover Hospital said.
“The whole idea of telehealth and telemedicine just opens up a whole other front for dealing with patients in a decentralized way,” he said.
Much of the technology in use now has been available for some time, Roth of PinnacleHealth said. However, reimbursement for such services was nonexistent. Payers have started to accept and compensate physicians more regularly for remote delivery of care, he said.
The nation’s health system and Central Pennsylvania providers are becoming more concerned with controlling costs and improving quality outcomes, Pugh said. It’s forcing a shift to be more clinically integrated and eliminate unnecessary services, he said.
“When that happens, it becomes decentralization,” Pugh said. “It comes down to what are the right services to be decentralized, pushed out to the community at a lower cost and still have good quality measures.”
Holy Spirit participates in reimbursement research
Physical decentralization is a major trend in the health care sector. Tied into it is maintaining quality at more locations and a transition to payments based on that quality.
Illinois-based Healthcare Financial Management Association asked Cumberland County-based Holy Spirit Health System to participate in Phase II of its Value Project.
The association launched the project to “provide new analytical tools and benchmark practices to help providers maximize the value that they provide to their customers, specifically high-quality and low-cost clinical care,” according to a news release.
Phase I of the project was completed in 2011, defining the concept of value in health care. It emphasized viewing value from the purchaser’s perspective and identified four key capabilities health care providers should develop to successfully manage their transitions to value-based payments: people and culture; business intelligence; performance improvement; and risk and contract management. A report and draft guidelines were released by the association to direct health care businesses.
Phase II discussions and research have begun to define value metrics and how to manage the transition from volume- to value-based payments. Research and surveys have begun, including interviews with Holy Spirit Health System, one of 34 cohort participants.
Findings thus far include a lack of consistency of value metrics required by commercial insurers, and payers and employers emphasizing similar issues.
“The HFMA Value Project gives Holy Spirit the opportunity to contribute to national research alongside many of the nation’s finest health care systems,” said Manny Evans, chief financial officer of Holy Spirit. “In addition, we hope to learn how other organizations plan to reposition themselves as we transform from a volume-based payment system to a value-based payment system.”
Decentralizing not just for health systems
Health care providers aren’t the only businesses decentralizing to meet consumers’ demands.
Pittsburgh-based Highmark Inc. in 2009 began to open retail centers for individuals to purchase insurance or ask questions in person.
“We asked, ‘How do we get out into your communities? How do we put ourselves out where you’re shopping, going out to eat, to the post office?’” said Matt Fidler, vice president of consumerism and retail marketing. “We’re driven to be more convenient for you.”
Consumers can walk in and ask questions about existing coverage, getting new coverage or even about insurance for family members, he said.
Highmark also has been increasing its mobile application technology, including sections where patients can find a doctor or view their claims via their smartphones, he said.
Health care is shifting from focusing on the health care provider to focusing on the member of the system, he said.
“(We’re) using that member as the epicenter of everything,” Fidler said.