Column | Strategic Partnerships, Mergers, and Acquisitions

3 ways healthcare organizations can take integration to the next level

Column | Strategic Partnerships, Mergers, and Acquisitions

3 ways healthcare organizations can take integration to the next level

Most integrated and consolidated healthcare organizations can point to lower unit costs, greater efficiency and selected gains in quality. Now it’s time to explore a whole new round of opportunities for improvement.

One need only look around to see that  integration has yielded tangible dividends – for example, in revenue cycle, supply chain, other overhead items and some aspects of quality. But integration may have lost some of its initial luster in the process. 

Ten years ago, many consumers were excited about the potential for integrated healthcare: “Wow, my primary care physician, my specialist and I all can see the same lab results and other information. I must be in ‘good hands’!”  

However, that ‘wow factor’ may be over. One primary care physician told us: “My patients are well aware that other parts of their lives are getting faster, easier and more effective due to communications technology. But they don’t see this in healthcare.”  

It’s time for integration leaders to take integrated healthcare further.

Ways to optimize existing integrated care models

There are many ways today’s integration models can accomplish more. Here are some examples.

Customer communications and transactions. Integrated healthcare organizations know they need to make their communication and interactions with customers easier and quicker, while still lowering transaction costs. At a recent meeting, one Medicare Advantage plan leader told us, “We are going to leverage the fact that all our members have cell phones.” 1 A Medicaid provider CFO sitting nearby nodded, “All of our members do, too.”

Cell phones are only one example of the next generation of communications networking opportunities. Most agree future communication within an integrated network can achieve far more effective and efficient linkages between physician-patient communications, electronic health records, pharmacies, payer decisions and other aspects of care. 

By further integrating communications, organizations can reduce total overhead costs, better leverage physician and other clinical resources, improve accuracy and even increase consumer and payer confidence that the optimum care is being provided.  

Customer differentiation and the tailoring of services. Now that caregivers can see a wider range of patient history and integrated systems offer more forms of care, integration leaders can turn their attention to other considerations, including the following:

Which patients are candidates for home care, and what services should be included 

Which patients should receive integrated behavioral and physical healthcare 

What role social determinants of health should play in targeting care 

How personal genetics can be factored into patients’ treatment regimens  

Which patients are good candidates for online or telehealth care

For two decades, industry leaders have discussed the need for more useful segmentation in healthcare, with the goal of serving “segments of one” (i.e., delivering personal treatment for each patient using an integrated team approach). That goal still is a long way off, but some integrated systems are making substantial progress.

Culture, purpose and brand reinforcement. As health systems get bigger, communities and individual customers/patients can feel more remote, and the organizations’ brands can get diluted. Health systems need to find a way to offset these tendencies.

Health systems have long relied on their communities’ (as well as customers’) loyalties. Also, health system boards have a special role in communities, with leaders coming together to share different perspectives for a common purpose. Health systems should continue to build on these strengths. 

Some health systems are working hard to establish a new common culture and a strong common brand, across their new, larger system. This work includes honoring and taking strengths from more than one existing brand and culture and molding it into a new one. The effort includes an effective local emissary, an internal initiative to redefine a common culture and a well-thought-out series of external initiatives at the local level.

New integration models are emerging

New approaches to integration are coming. Some are pilots, some are in operation and some are still aspirational. The new models include linkages to large patient data bases (beyond the health system’s own patients). The models also include linkages to new entries into health delivery (such as Amazon and CVS) and to telehealth, and some include new linkages to social media. Some of these new models will be extensions of today’s integrated organizations. Some will simply contract with the existing models. Others will be competitors or disrupters.

No time for complacency

It’s time to reassess, revisualize and reinvest in integration. Consolidations of health systems and health plans continue today. Substantial work also continues in integrating and improving the effectiveness of the supply chain, the revenue cycle and IT capabilities. All this work has generated savings and increased effectiveness. Some customers perceive a lower trajectory of improvement, but the potential remains high.

What can we say about the next generation of integration? We expect the integrated health systems of the future will link to larger customer databases and include the ability to analyze the data. They will leverage their size and expand their capabilities to support the delivery of more personalized healthcare. Many will reinvent their brands and redevelop and re-enforce a common culture. They may or may not use the same legal approaches to link the players as they have in the past. But many will work harder to act locally even as they finance efforts nationally.

In short, a future integrated health system’s success may depend on its capacity to accommodate still more changes. 

About the Authors

Keith D. Moore, MCP,

is CEO of McManis Consulting, Denver, and a member of HFMA’s Colorado Chapter.

Dean C. Coddington, MBA,

is a senior consultant with McManis Consulting, Denver. 

Advertisements

Related Articles | Strategic Partnerships, Mergers, and Acquisitions

Column | Finance and Business Strategy

COVID-19 is the deflection point for new health system flexibility

Integrated health systems will require flexibility as they begin a process of adjusting to the new healthcare environment that follows the COVID-19 crisis.

Blog | Physician Relationships

Pace of physician practice acquisition by health plans may accelerate post-pandemic

HFMA’s Chad Mulvany says it is likely health plans will have both motive and the wherewithal to acquire physician practices or employ physicians whose practices didn’t have the balance sheet to survive the revenue shock of the COVID-19 pandemic.

Blog | Managed Care

Health plan-owned PCP clinics steer members to lower-cost sites-of-service

Hospitals and health systems need to be able to deliver high-quality outcomes in a cost-efficient manner to ensure they are not implicitly tiered out of a health plan's network.

Trend | Healthcare Business Trends

Inpatient market consolidation has led to stable inpatient markets in metro areas

After a period of rapid consolidation, U.S. metro inpatient markets are now stable oligopolies, with a small number of competing provider systems selling inpatient services to a small number of health insurers.