Consolidations and affiliations take many forms. During a panel session I moderated at our firm's Healthcare Executive Summit, held this past summer in Chicago, healthcare leaders shared their experiences and ideas about how other healthcare providers can engage in affiliations and other partnerships in their own environments.
Board members need to evaluate the best course for their organizations, taking into account all the forces at play in today's rapidly evolving healthcare landscape, said Ron Guziak, President and CEO of Sun Health Services and Sun Health Foundation.
"The board has to come to grips with questions such as, 'Who are we? What does our future look like?'" Guziak said. "One of the things we could miss is that our competition is not just the other healthcare systems as we know them today. If we are not preparing ourselves by looking at Walgreens and that type of product, I think we are missing the boat."
Life After the Health System
Sun Health is a 40-plus-year-old, community-based healthcare organization with a mission of being an advocate for healthy living. In 2008, Sun Health's board entered into a partnership with Banner Health System to operate its two hospitals.
"After 40 years of running our two hospitals, which were 85 percent Medicare, we said, 'We have to do something different. We aren't going to make it. Is there an operating partner to take on that responsibility, and can we shift gears to serve the community in a new way.'"
Guziak's message to healthcare executives and board members in health systems struggling to survive in the post-health reform world: "There is life after being a part of a healthcare system. Smaller systems have that opportunity to recreate themselves if they are willing to say, 'We don't need to be a hospital system today. It might be better for somebody else to run these hospitals, and perhaps there is another role for our organization in the community to provide services that improve the health of the community. We all recognize there is a gap in service."
For Sun Health, that "gap" consists of the 85 percent of the population who are relatively healthy. Whereas 3 percent of the population are the sickest and represent the vast majority of the healthcare dollars in the United States, and 12 percent of the population experience surgeries, emergencies, and cancer treatment, 85 percent of the population uses healthcare services periodically but thinks of themselves as very healthy—and wants to stay that way.
"Most of what I hear about population health is about the 15 percent; our system of care gives lip service to the 85 percent," Guziak said. "At Sun Health, we believe it is now our responsibility to provide services to the 85 percent using evidence-based technology and programs, while measuring outcomes."
Today, Sun Health is not only the largest locally owned senior living nonprofit in Arizona, but it also is seeing dramatic success with its community health programs, including CareTransitions. "Our goal is to use revenue from our portfolio, our foundation and our senior living operations to fund community programs," Guziak said.
In May 2013, Sun Health entered the Centers for Medicare and Medicaid pilot Community Based Care Transitions Program. The 30-day program provides in-home nursing assessment, chronic disease education, medication review and education, home safety evaluation, fall risk assessment and weekly follow-up calls.
At two hospitals, Sun Health Care Transitions has reduced the readmission rate for high-risk Medicare patients to 7 percent, ranking the program as one of the top CMS pilots in the country. Last June the Care Transitions team was visited by the Lewin Group, a healthcare-consulting firm that works on behalf of CMS to gather best practices and facilitate peer-to-peer information sharing.
Remaining Independent Through Affiliations and Partnerships
ProHealth Care, based in Waukesha County, Wis., is committed to remaining independent, said President and CEO Susan Edwards. "On an annual basis, we look at our financial position, competitive position, level of clinical integration, level of physician alignment, satisfaction and quality scores, and our relevance in the payer market, to determine whether we are in a position to remain independent. And if not, where do we have gaps and vulnerabilties?" Edwards said.
Currently, those gaps and vulnerabilities include narrow geographic coverage, limited scale and a limited ability to take on risk. "While I don't see a wholesale acquisition or merger of our organization, I do see us working toward the development of some regional partnerships or statewide collaborations," Edwards said. "As we look at partnerships and affiliations, we look for partners that can meet those needs around scale, around geography and the ability to manage risk."
Building a Complete Continuum of Care
Edwards' vision for the future of health care is complete clinical integration across the continuum of care, with a focus on prevention and creating healthier communities. ProHealth Care already has built a complete continuum of care: acute-care and tertiary-care hospitals, a rehabilitation hospital, home health, hospice, assisted living and independent living, and 15 physician clinics that employ more than 125 primary care physicians. The regional integrated health network also has joint ventures with surgeons and an affiliation with Indiana University to manage cardiovascular and thoracic surgery.
"From a clinical integration standpoint, the physicians and surgeons have been critical in making that happen," Edwards said. "We have been very fortunate. All of our surgeons are using standardized devices, because it is the right thing to do. If they understand the issues and where you're going and the role they can play, I think it's pretty straightforward."
Expanding the continuum of care beyond the hospital is an important goal for ProHealth Care. "We are putting a strategy around reducing our focus on the hospital and developing a plan to see a greater revenue base from non-hospital based services," Edwards said. The hospital is "an important part of what we do, but it is just one piece," she pointed out.
True population health management requires different types of skills sets that are not traditionally thought of within the healthcare ecosystem, such as health coaches and community nurses who focus on prevention and keeping people out of the hospitals, she said.
ProHealth Care currently employs 13 health coaches within its Medicare Shared Savings Plan, and a key to their success has been physician buy-in to the program. "We have found that the trust factor is automatically there if the physician says it is important that you work with this person," Edwards said.
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