Business Intelligence

Dean C. Coddington
Keith D. Moore

The promises of coordinated health care seem obvious.

Who could fail to see the advantages of delivering "seamless" care across multiple settings, such as primary care and specialist offices, ambulatory centers, acute care facilities, and rehabilitation centers? Or of using the most appropriate talents (physicians, care coordinators, others) at the right time? Or of making better use of patient information to support the care-giving process?

Closer coordination can improve care in countless ways. For example, primary care practices play a pivotal role in reducing readmissions and other costs by ensuring that their patients who have been discharged from the hospital understand their treatment plans (including monitoring signs and symptoms of relapse), fill and follow medication orders, and have appropriate follow-up visits and testing. And unneeded hospitalizations can be avoided in the first place if patients receive good office-based care (including preventive care).

Common incentives and common information systems are the primary means by which care coordination helps hospitals reduce costs and avoid unnecessary and duplicative care. By allowing information for each patient to be shared among all caregivers, common systems also prevent unnecessary duplications of patient histories, thereby helping hospitals to avoid excess capacity in diagnostic and treatment capabilities between the different care settings.

Simply put, coordinated care should result in higher quality, better access, and lower cost. Healthcare delivery systems are counting on achieving these benefits. However, many physician groups and health systems are finding that actually reaching these goals requires focus, action plans and follow-up, and changes in incentives and culture. It also requires new business intelligence in the form of new information flows and more detailed supporting analyses.

Case Example of Coordination Within Independent Practices

Catholic Medical Partners in Buffalo, N.Y., is one of several experiments in having private practices and health systems closely coordinate their care processes. Catholic Health Partners is a not-for-profit independent practice association (IPA) whose members include more than 900 private physicians, the three-hospital Catholic Health System, and a fourth hospital (Mount St. Mary's in nearby Niagara County). The health plans in the greater Buffalo area are working closely with the IPA, having made investments in the form of infrastructure grants, and having entered performance-based contracts (in essence sharing potential financial gains).

The IPA's current form and strategy was established in 2005. Since then, the IPA has invested in:

  • Organizational infrastructure-including leadership, governance, staff, and staff training
  • Electronic health records (EHRs)-with an 80 percent adoption rate
  • Participation in a regional health information exchange-tying EHRs and other data sources into a common network
  • The establishment of data feeds from the health plans
  • The addition of care coordinators in physicians' offices

Catholic Medical Partners' care coordinators are nurses employed within the physicians' offices. The care coordinators play key roles in communicating with chronic patients before and after visits, before and after hospitalizations, and between physicians. The funds are provided by Catholic Medical Partners in the form of infrastructure grants to the private practices. For primary care practices, the goal is one care coordinator for every 300 chronic care patients in the practice.

Catholic Medical Partners is already meeting several initial objectives (including improved quality scores across numerous areas, reduced hospital readmissions, and reductions in acute care sensitive admissions). To date, Catholic Medical Partners is considered a success from multiple perspectives, including the perspective of the health plans that have invested in it. However, over time, further improvements are expected.a  

Other Approaches

Two additional case studies, drawn from our recent research for the American Hospital Association, illustrate the variety of potential gains and the business analytics needed to support these efforts.

New West Physicians in west Denver (80 primary care physicians) achieves care coordination through its common EHR, periodic studies of the medical records of patients with chronic disease, and a real-time analysis of claims data from New West's primary customer, a Medicare Advantage program. As an overall result, the organization has been able to reduce its costs for professional services (both primary and specialty) to below those of Medicare fee-for-service payment.

Memorial Herman in Houston, the largest healthcare system in Texas, is betting the future of the organization on its clinically integrated network (CIN), composed of more than 2,000 of the 3,500 physicians on the medical staffs of its hospitals. Physicians who elect to be part of the CIN agree to follow clinical guidelines, share clinical information, and work together to improve quality and lower costs. Physicians from the CIN provide the leadership of the medical staffs of all 12 hospitals. This approach has already paid off in reducing the rate of increase in costs for Memorial Hermann's 22,000 employees and family members to zero, and in generating performance-based bonuses for CIN physicians.

Turning Promise into Practice

Results of previous research that we have conducted indicate that care coordination and clinical integration have paid off for integrated systems such as Kaiser Permanente, Billings Clinic in Montana, and Marshfield in Wisconsin. And others are well along on their journey and expect payoffs in the future. Based on their examples, the following recommendations appear important for delivering sustainable improvements in cost as well as quality.

Share the right incentives with care givers. Thus far, incentive payments have often been used to invest in infrastructure. Arguably, to generate sustainable savings, these dollars should be shared with the physicians and their staff, who play a major role in creating the savings.

Adjust incentives for specialists. Specialists should not continue to benefit from an incentive structure that rewards unnecessary cases. A utilization benchmarking process needs to be in effect for specialists. Many may want to consider replacement of fee-for-service payments with a salary plus bonus structure for specialists. This will be a big change for many organizations, but those that have been most successful have made this change.

Make analytics readily available to physicians and others directly involved in the care process. If those delivering the care cannot monitor their progress using analytics based on claims data, EHR-based data, and other sources, they lack essential support they need to change their behavior meaningfully.

To the extent possible, imbed disease management/care coordination for chronic care in physicians' practices. This approach promotes face-to-face patient contact, which is more likely to be successful than telephonic and other less direct approaches.

Monitor chronic care patients throughout the continuum of care. Most organizations are only just beginning to take this step.

Ensure that forecasting and budgeting processes anticipate realistic changes. The organization then should follow up to make sure it achieves those changes.

Refine measures of quality and of overall value to ensure that they are meaningful for patients, payers, and providers. Too often, the measures used today are mere proxies for quality metrics rather than more direct links to the value of services provided to the patient. Patient satisfaction surveys and prevention programs for diabetic patients are just two examples of effective means for assessing quality and overall value.

In short, based on our experience, organizations that not only consider themselves integrated but also have the business intelligence in place-i.e, the necessary information, analytics, and incentives-will more surely and rapidly achieve the promise of coordinated care in terms of both cost and quality.

Dean C. Coddington is a senior consultant, McManis Consulting, Denver, and a member of HFMA's Colorado Chapter (

Keith D. Moore is CEO, McManis Consulting, Denver (



a. Moore, K. D., and Coddington, D. C., ACO Case Study, Catholic Health Partners: Buffalo, N.Y., prepared for the American Hospital Association, January 2011. 


Publication Date: Monday, April 02, 2012

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