The 4th pillar of the value agenda: INTEGRATED CARE -Integrate Care Delivery Systems

Credit: vaccine express

Harvard Business Review
Michael Porter and Thomas Lee
October 2013

This is an excerpt of the paper: “The Strategy That Will Fix Health Care“, published in 2013, focused on the topic above.

The Value Agenda Detailed 

  1. IPUs — Organize into Integrated Practice Units (IPUs)
  2. OUTCOMES & COSTS — Measure Outcomes and Costs for Every Patient
  3. BUNDLED PAYMENTS — Move to Bundled Payments for Care Cycles
  4. INTEGRATED CARE — -Integrate Care Delivery Systems
  5. GEOGRAPHY — Expand Geographic Reach
  6. IT PLATFORM — Build an Enabling Information Technology Platform

4: Integrate Care Delivery Systems

A large and growing proportion of health care is provided by multisite health care delivery organizations. In 2011, 60% of all U.S. hospitals were part of such systems, up from 51% in 1999. Multisite health organizations accounted for 69% of total admissions in 2011. Those proportions are even higher today. Unfortunately, most multisite organizations are not true delivery systems, at least thus far, but loose confederations of largely stand-alone units that often duplicate services. There are huge opportunities for improving value as providers integrate systems to eliminate the fragmentation and duplication of care and to optimize the types of care delivered in each location.

To achieve true system integration, organizations must grapple with four related sets of choices:

  • defining the scope of services, 
  • concentrating volume in fewer locations, 
  • choosing the right location for each service line, and 
  • integrating care for patients across locations. 

The politics of redistributing care remain daunting, given most providers’ instinct to preserve the status quo and protect their turf. Some acid-test questions to gauge board members’ and health system leaders’ appetite for transformation include: Are you ready to give up service lines to improve the value of care for patients? Is relocating service lines on the table?

Define the scope of services.

A starting point for system integration is determining the overall scope of services a provider can effectively deliver-and reducing or eliminating service lines where they cannot realistically achieve high value. For community providers, this may mean exiting or establishing partnerships in complex service lines, such as cardiac surgery or care for rare cancers. For academic medical centers, which have more heavily resourced facilities and staff, this may mean minimizing routine service lines and creating partnerships or affiliations with lower-cost community providers in those fields. Although limiting the range of service lines offered has traditionally been an unnatural act in health care-where organizations strive to do everything for everyone-the move to a value-based delivery system will require those kinds of choices.

Concentrate volume in fewer locations.

Second, providers should concentrate the care for each of the conditions they do treat in fewer locations. The stated promise of consumer-oriented health care-”We do everything you need close to your home or workplace”-has been a good marketing pitch but a poor strategy for creating value. Concentrating volume is essential if integrated practice units are to form and measurement is to improve.

Numerous studies confirm that volume in a particular medical condition matters for value. Providers with significant experience in treating a given condition have better outcomes, and costs improve as well. A recent study of the relationship between hospital volume and operative mortality for high-risk types of cancer surgery, for example, found that as hospital volumes rose, the chances of a patient’s dying as a result of the surgery fell by as much as 67%. Patients, then, are often much better off traveling longer distance to obtain care at locations where there are teams with deep experience in their condition. That often means driving past the closest hospitals.

Concentrating volume is among the most difficult steps for many organizations, because it can threaten both prestige and physician turf. Yet the benefits of concentration can be game-changing. In 2009, the city of London set out to improve survival and prospects for stroke patients by ensuring that patients were cared for by true IPUs-dedicated, state-of-the-art teams and facilities including neurologists who were expert in the care of stroke. These were called hyper-acute stroke units, or HASUs. At the time, there were too many hospitals providing acute stroke care in London (32 of them) to allow any to amass a high volume. UCL Partners, a delivery system comprising six well-known teaching hospitals that serve North Central London, had two hospitals providing stroke care-University College London Hospital and the Royal Free Hospital-located less than three miles apart. University College was selected to house the new stroke unit. Neurologists at Royal Free began practicing at University College, and a Royal Free neurologist was appointed as the overall leader of the stroke program. UCL Partners later moved all emergency vascular surgery and complex aortic surgery to Royal Free.

These steps sent a strong message that UCL Partners was ready to concentrate volume to improve value. The number of stroke cases treated at University College climbed from about 200 in 2008 to more than 1,400 in 2011. All stroke patients can now undergo rapid evaluation by highly experienced neurologists and begin their recovery under the care of nurses who are expert in preventing stroke-related complications. Since the shift, mortality associated with strokes at University College has fallen by about 25% and costs per patient have dropped by 6%.

Choose the right location for each service.

The third component of system integration is delivering particular services at the locations at which value is highest. Less complex conditions and routine services should be moved out of teaching hospitals into lower-cost facilities, with charges set accordingly. There are huge value improvement opportunities in matching the complexity and skills needed with the resource intensity of the location, which will not only optimize cost but also increase staff utilization and productivity. Children’s Hospital of Philadelphia, for instance, decided to stop performing routine tympanostomies (placing tubes into children’s eardrums to reduce fluid collection and risk of infection) at its main facility and shifted those services to suburban ambulatory surgery facilities. More recently, the hospital applied the same approach to simple hypospadias repairs, a urological procedure. Relocating such services cut costs and freed up operating rooms and staff at the teaching hospital for more-complex procedures. Management estimated the total cost reduction resulting from the shift at 30% to 40%.

In many cases, current reimbursement schemes still reward providers for performing services in a hospital setting, offering even higher payments if the hospital is an academic medical center-another example of how existing reimbursement models have worked against value. But the days of charging higher fees for routine services in high-cost settings are quickly coming to an end. (See again the sidebar “Why Change Now?”)

Integrate care across locations.

The final component of health system integration is to integrate care for individual patients across locations. As providers distribute services in the care cycle across locations, they must learn to tie together the patient’s care across these sites. Care should be directed by IPUs, but recurring services need not take place in a single location. For example, patients with low back pain may receive an initial evaluation, and surgery if needed, from a centrally located spine IPU team but may continue physical therapy closer to home. Wherever the services are performed, however, the IPU manages the full care cycle. Integrating mechanisms, such as assigning a single physician team captain for each patient and adopting common scheduling and other protocols, help ensure that well-coordinated, multidisciplinary care is delivered in a cost-effective and convenient way.

About the authors

Michael E. Porter, is the Bishop Lawrence University Professor at Harvard University. He is based at Harvard Business School.

Thomas H. Lee, is the chief medical officer at Press Ganey and the former network president of Partners HealthCare

A version of this article appeared in the October 2013 issue of Harvard Business Review.

Originally published at on October 1, 2013.

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