restructuring for accountable care• total assets $2.170 billion • annual revenues $1.668 billion...

Restructuring for Accountable Care: Achieving True Provider Integration

A MemorialCare Case Study

MemorialCare Health System

Long Beach Memorial

Orange Coast Memorial

Miller Children’s Hospital Long Beach

Saddleback Memorial San Clemente

Saddleback Memorial Laguna Hills

Community Hospital Long Beach

Six Nationally-Recognized Hospitals

MemorialCare Medical Foundation Locations

Costa Mesa

Huntington Beach

Irvine

Mission ViejoIrvine

Westminster

MemorialCare HealthExpress – 3 locations inside ALBERTSONS/Savon

MemorialCare Medical Group – 25 locations

Coming Soon! Our Newest Site

Los Altos MarketCenter•30,000 sq. ft.•19 physicians•Urgent care•Lean design•Winter 2012

Serving our Communities Together

Just the Facts

• Total Assets $2.170 billion• Annual Revenues $1.668 billion • Bond Rating AA- stable • Patient Discharges 67,000• Patient Days 327,000• ER Visits 169,000• Senior Lives 72,500 • Commercial Lives 129,300• Babies Delivered 9,500 • Surgeries 37,000• Employees 11,000 • Medical Staff 2,500

Fully Engaged for Excellence

Traditional Engagement ApproachesAcademic Affiliations & Medical EducationMedical DirectorshipsManaged Care Risk/Capitation AgreementsSaddleback Physician Services – MSORecruitment: Income Guarantees

Innovative Engagement ApproachesPhysician Society Physician Leadership Academy

Evolving Engagement StrategiesElectronic Medical Record – Inpatient & AmbulatoryOutpatient Specialty Clinics (1206D)Medical Foundation (1206L)Joint VenturesRetail Medicine

Levels of Alignment

Industry Assessment

Current Factors Driving Consolidation and Integration

Access to Full Continuum of Care

ManagementExpertise Investments

in Technology

Economies ofScale

PurchasingLeverage

PrivateEquity

Weak Economy

Physician Integration

Managed Care Expertise

Access toCapital

Unprecedented combination of macro-economic influences, industry pressures and market dynamics driving consolidation and integration

Consolidation

Physician Recruitment& Retention

Low InterestRate Environment

Operating Efficiencies

Risk BearingCapabilities

Successful and Meaningful Integration…

Often a Product of Positive Personal Relationships Rather than a Function of Economic Factors or Legal Structures

Common Themes that Lead to Success:•Articulation of clear vision and strategy•Commitment to vision at the highest levels•Demonstrated resources to fulfill vision and implement strategy•Deliberate focus on cultural integration and trust•Development of key interpersonal relationships•Absence of internal/conflict of interest factors•Track record of fulfilling deal commitments

Physician Shortage Projections

85 Percent of Physicians Seek… Employment ModelsAccording to the 2010-11 Occupational Handbook from the Bureau of Labor & Statistics

Physician/Hospital Partnership

MemorialCare Strengthening Through

Alignment: 10 Key Areas of Focus – FY13

Area of Focus #1

Growing and consolidating to meet population health management needs:

• Inpatient• Outpatient

Area of Focus #2

Responsible for the health of a population.

Area of Focus #3

Healthiest health system in the nation.

Area of Focus #4

World-class employee engagement year over year.

Area of Focus #5Through direct relationships with employers and municipalities ―

improving health of their employees

and reducing costs.

Area of Focus #6

Cost of providing care 20% lower than today. A culture of financial discipline.

Area of Focus #7

Total number of patients in our hospitals decreased, but number in our care increased.

Area of Focus #8

Preferred partner of physicians in all practice models.

Area of Focus #9

Quality and service ensuring we receive all pay for performance monies available to us ―

and

our communities will be healthier.

Clinical Quality> 75% reduction

in serious infections across our system

Providing Value in Health Care

> 85% reduction in pressure ulcers (HAPU) across our system

Providing Value in Health Care

MemorialCare Health System• Top 100 Integrated Health Network by SDI

Long Beach Memorial, Orange Coast Memorial, Saddleback Memorial• Named in U.S News & World Report 2011-12 Best Hospital

Miller Children's Hospital Long Beach• “Hospital of Choice” Award from American Alliance of Healthcare

Providers

MemorialCare Medical Group & Greater Newport Physicians• CAPG 4 Star Elite Group Award for clinical quality

MemorialCare Medical Group • Honored by IHA as one of the Top 20 performing groups in CA for

quality, patient satisfaction, and IT

Area of Focus #10

MemorialCare is the gold standard in health care.

MemorialCare Current State of Alignment:

MemorialCare Medical Foundation

Physicians as Partners Achievements

MemorialCare Medical Foundation

IPA Division Group Division

MemorialCare Entities

Foundation Structure: 2011

MemorialCare Medical Group October Statistics

• 181 employed Providers– 150 Physicians

• 122 Primary Care (FP, IM, Peds, Geriatrics)• 28 Specialists

– 31 Ancillary Providers (NP, PA, Acu, Pharma, Psych)

• >1000 contracted physician specialty network• 31 clinical locations, including

– 3 Retail Clinics (Health Express)– 5 Urgent Care Centers

Multiple Levels of Integration

• Medical Group into Hospital System

• 4 Medical Groups into 1 Medical Group

• Multiple new practice acquisitions (18)

• Specialists into Primary Care Group

• IPA into Foundation

Group Acquisition and Integration Fears

• Long Term Vision -Fill Beds vs. Population Health

• Culture -Care Delivery, Quality Focus

vs. Corporate

-Primary Care vs. Specialist

• Management Team -Security, Control

Fears and Excuses

Top 5 reasons NOT to integrate into one MemorialCare Medical Group:

– Rapid influx of new, unknown doctors– Adding high paying specialists to primary

care– Multiple new locations, distant geography– Different histories and cultures– Different agendas: FFS vs. HMO, community

vs. academic, independent vs. group practice

Overcoming our Fears Through a Shared Vision

Mission To improve the health and well being of individuals, families, and our communities through innovation and the pursuit of excellence.

Vision Advancing health in extraordinary ways— together.

Overcoming our Fears — Shared Vision of Integrated Delivery System

Break Down Silos Through:

•Clinical Integration

•Operational/IT Integration

•Financial Integration & Aligned Incentives

•Cultural Integration

Achieving True Provider Integration: Culture

Culture Eats Strategy…

…For Breakfast, Lunch and Dinner!

Understanding our Culture

• Patient Centered• Quality Measures• Recognition & Rewards• Transparency/Honesty• Entrepreneurship• Managed

Care/Delegated Model

Cultural Integration Strategies

• Focused on improving the culture and creating a shared vision

• Created Guiding Principles and Core Values

• Built a Strategic Plan together

Cultural Integration Strategies

• Created process to engage doctors in bringing in new doctors/groups:– Integration Committee– New Provider Orientation revamped– “Rules” around shareholder status, schedules, etc…

• Mix committee members

• Social events: Dinners, CME, Leadership

Achieving True Provider Integration: Clinical

Virtual Case Conference Program

• Interdisciplinary case management conference run in a virtual fashion through weekly teleconference

• High risk, complex cases identified by risk stratification

• 75 cases since July 7, 2011

VCC Results

• Number of inpatient admissions lowered by 31 (42%)

• Number of ER visits lowered by 18 (82%)

• Cost of claims paid decreased by $183,888 (41%)

• Average cost savings per case: $3,913

Saddleback Memorial Disease Management Pilot• Focus on CHF, COPD• 2 NPs, 2 Tele-health RNs• Home visits• Care Team Connect • 80 patients enrolled • Average age 86

Results:• Quality of life assessment

scores up 36%• Functional scores up 32%• Heart Failure readmissions

down from 30% to 8%

Achieving True Provider Integration: Financial

Shared Incentives & System Think

• Focused attention on aligned incentives– Pay for performance

bonuses– Key quality indicators– System-wide projects

(e.g. ASCs, Imaging)• System Think

Professional Services Agreement

Alignment among:• Hospitals• Foundation• Medical Group• Individual Physicians

Achieving True Provider Integration:

Operational/IT

Operational Integration

Joint Operating Committees

Technical Integration

• One patient one chart philosophy• Comprehensive EMR technology

– Inpatient– Outpatient– Ancillary sites– Patient portal

Future Integration Milestones

• Finish IT interconnectivity

• Standardize Best Practices and expand Care Coordination Model

• Develop innovative ways to communicate across the system

Barry Arbuckle, PhD barbuckle@memorialcare.org

Mark Schafer, MD mschafer@memorialcare.org