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Breaking Through to the New Healthcare

June 19, 2012
by Mark Hagland
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Premier health alliance member organization medical executives discuss their pioneering efforts at reshaping how healthcare is organized and delivered
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The Charlotte, N.C.-based Premier health alliance, a membership organization encompassing more than 2,500 hospital organizations and more than 81,000 non-acute care sites nationwide, on June 5-8 held its Breakthroughs 2012 Conference at the Opryland Hotel and Convention Center in Nashville. Attendees participated in dozens of sessions, organized by tracks, and spanning such areas as patient safety and quality, efficiency and cost control, purchasing innovation, and strategic information technology.

On  June 7, several clinician executives from Premier member organizations, some of them conference presenters, sat down for a roundtable discussion by telephone with HCI Editor-in-Chief Mark Hagland. Each discussion panel member spent some time describing what he and his colleagues have been doing at their organization, and then they engaged in a broader discussion with Premier's enterprise-wide chief medical officer Richard Bankowitz, M.D. Below are some excerpts from that June 7 discussion.

I’d like to ask each of you to describe some of the innovations you and your colleagues have been working on in your organizations.

Evan Benjamin, M.D., senior vice president and chief quality officer, Baystate Health, Springfield, Mass:  We’re a three-hospital system; our flagship facility is a 700-bed academic medical center affiliated with Tufts University. We also have an affiliated health plan. And our goal over the past few years has been transforming the way we think about delivering healthcare and the way healthcare is financed. And as you know, we’ve had a few years of insuring 98 percent of the population here, following healthcare reform in Massachusetts. One of the big challenges has been how we continue to insure everyone and improve quality and lower costs. So we’ve been focusing on new ways to align physicians, to coordinate care, and to integrate care. So we started a bundled payments project about two years ago.

Evan Benjamin, M.D.

At that time, the only organization really doing bundled payment contracts was Geisinger Health System [Danville, Pa.], with their ProvenCare program. What we’ve done is that we’ve worked with our health plan, Health New England, which has 120,000 members, and began by focusing on total hip replacement; since then, we’ve expanded to total knee replacement, and we’re currently working on expanding out to other areas, including cardiac bypass surgery. We brought together the hospital, the health system which also included our visiting nurse association, the health plan, and our community orthopedic surgeons. We began planning this in 2010, and created an eight-step approach, and went live on January 1, 2011. It took about seven months of planning prior to go-live, which is pretty typical in terms of the amount of work required to change the model of care, set up gainsharing models with the physicians, analyze the patient population , and set up quality replacements.

How many physicians were involved in the initial total hip replacement pilot program?

Initially, it was just our four orthopedic surgeons who are doing total hips.

And what happened?

We put together those elements I’ve just mentioned—the payment model, gainsharing, quality measures. We wanted to establish a baseline on quality; and we set a bundled price, and we included a warranty like Geisinger, so the plan would feel comfortable. And we used the model of preventable complications, handling those complications without charge, like ProvenCare. And then we set our quality targets, and set up a very simple gainsharing model, so that we would share cost savings. Geisinger at first set up a 50/50 model for ProvenCare. We set it up as 45 percent for the hospitals, 45 percent for the physicians, and 10 percent for the visiting nurse association, because they were doing rehab at home, averting post-acute rehab.

What have the results been?

We’ve been hitting all our quality measurements, and saving about $800 per case. The cost savings have been coming  from two broad areas: one was inpatient medical management, where the surgeons were recognizing some non-standard practice variation. And when they’re all sitting around the room developing a bundled care model; so they had incentives to standardize. We lowered supply costs, and we lowered length of stay about three-quarters of a day, from 3.5 days to 2.75 days inpatient. The overall cost of the bundle was about $25,000 per case, and between the inpatient reduction in cost and the reduction in post-acute care services, it was about $800 per case. We just started total knee this month, June. And we’re working with the Center for Medicare and Medicaid Innovation (CMMI), and Premier on this. Premier has pulled together 18 health system member organizations as a convener, to help apply to participate in the CMMI bundled payment program. We’ll be submitting our application to the CMMI Innovation Center for the federal bundled payments program.

Dr. Wise, please tell us about your organization’s recent activities.