As accountable delivery systems gain momentum across the country, many health plans and hospitals struggle to identify the appropriate model for their own organizations. While executives recognize the need to improve quality of care, reduce costs, and ensure optimal revenue, no standardized path to success is set. How should organizations proceed in adapting their work to deliver better care for Americans and compete in an evolving landscape? One solution is a virtual integrated delivery network (VIDN), which offers a patient-centered approach to making timely, value-based health care decisions.
‘Islands of excellence’: Integrated delivery networks
To understand the VIDN model, the best place to start is with an integrated delivery network (IDN). Comprised of a network of facilities and providers working together to offer a continuum of care, these systems offer cost-effective, high-quality care. Examples of high-performing IDNs include Kaiser Permanente, Mayo Clinic, Geisinger Health System, and Intermountain Healthcare.
At a basic level, IDNs have three common characteristics. First, the network needs to encompass the entire continuum of care within its system. By owning the end-to-end health care experience, IDNs gain a full view of quality and cost factors and can better manage outcomes. Second, integrated technology enables facilities and providers to share data and collaborate efficiently. Finally, coordinated and integrated care results from physicians, hospitals, and payers working together to deliver the most cost-effective treatments.
During President Barack Obama’s June 2009 speech to the American Medical Association, he recognized IDNs as a model for health care reform, noting:
“Let me be clear: identifying what works is. … about providing patients and doctors with the information they need to make the best medical decisions. Still, even when we do know what works, we are often not making the most of it. That’s why we need to build on the examples of outstanding medicine at. … places like the Geisinger Health system in rural Pennsylvania and the Intermountain Health in Salt Lake City, where high-quality care is being provided at a cost well below average. These are islands of excellence that we need to make the standard in our health care system.”
Extensive technology and tools gather and manage the flow of data upon which IDNs operate. Plan executives, staff, and physicians rely on network data so that they can make more informed, timely, coordinated decisions. Team members across the continuum of care utilize the network’s data-driven insights to identify gaps in care and address them through appropriate outreach and programs.
Kaiser Permanente is by far the largest IDN, with 8.7 million members in nine states and the District of Columbia. In 2002, it demonstrated that aggressive management of Northern California patients with coronary artery disease resulted in fewer deaths. In 2010, the Hewitt Health Value Initiative found it to be 17% more cost-effective and 117% better in clinical quality than the all-plan average in the markets it serves. And in 2011, the organization received the highest rating in 11 National Committee for Quality Assurance, or NCQA, effectiveness measures, more than any other health plan in the nation.
At the same time, IDNs’ success in reducing costs points to dramatic savings opportunities for the country. According to a 2008 Dartmouth Atlas study, “In addition to improving the quality of care, transforming the delivery system would also save money. … Using the Mayo Clinic as a benchmark, the nation could reduce health care spending by as much as 30% for acute and chronic illnesses; a benchmark based on Intermountain Healthcare predicts a reduction of more than 40%.”
Market dynamics shape IDN footprint
Despite their strong outcomes, however, IDNs usually serve as a guiding star rather than a practical approach for organizations to utilize in building their own accountable delivery systems. Replication of the model is limited due to the nature of certain tried-and-true success factors. For example:
- Market monopoly: Unless an IDN houses the patient’s entire health care experience, it is extremely challenging to deliver the core characteristics of complete clinical data and coordinated, integrated care. As such, the network best operates as a monopoly within a market. Competitors probably would remove some of the best facilities and physicians from the network, which raises the likelihood of patients going outside the network for certain services.
- Geography: Urban and rural market dynamics differ from each other in significant ways. Most IDNs established their leadership in one market over the course of many years, sustaining operations with slow growth. Attentive leadership and commitment to a community are necessary to build and operate a closed market and an aligned internal culture across facilities and providers.
- Model mobility: Considerable challenges surface when organizations look to adapt an existing IDN model to enter a new market. For instance, the Mayo Clinic’s strong track record at home in Minnesota was not easy to transport, even with its stature as one of the highest-quality, lowest-cost health care systems in the country; its expansion sites took at least a decade to establish themselves solidly in Florida and Arizona.
As a result of these limitations in replication, IDNs have not gained widespread usage and are simply unavailable to most patients. Many IDNs provide services within a single geographic area to a limited number of patients (see Figure 1). Add in operational and technology costs such as building and maintaining in-house data platforms, and most organizations conclude that the IDN model is too cost-prohibitive and risky to be feasible. While IDNs provide a model of excellence, the vast majority of Americans need an alternative solution.
Estimates based on reporting data available as of July 24, 2012. Source links: Kaiser Permanente; Sentara Healthcare; Geisinger Health System; ProMedica; Medicare Shared Savings Initiatives; Mayo Clinic; St. John’s Hospital Springfield (Mercy); Group Health Cooperative; WellStar Health System; Marshfield Clinic; Billings Clinic.
The solution: Go virtual
A VIDN helps organizations deliver IDN-caliber results with an accountable delivery system platform that is cloud-based and customized to fit the needs of health plans and providers. It eliminates the burden of owning the entire continuum of care, empowering an organization to establish a robust, collaborative network that keeps information securely flowing throughout an enterprise.
Significant use of the latest health information technology, combined with a commitment to clinical and financial information transparency and properly aligned financial incentives, can help to establish virtual systems of care. Once connected and aligned, providers can more aptly proactively manage the health of member populations, coordinate care across the continuum, and make health care decisions based on overall value. VIDNs can function effectively in multiple settings, from Medicare to commercial plans, and from rural to urban markets.
With the advent of cloud-based technology and widely adopted data exchange standards, critical and timely patient information can flow securely throughout the virtually connected health care enterprise. Disparate systems can be more easily connected to create a clear, unified picture, equipping medical decision makers with complete and accurate clinical and financial data. Rules-based engines can mine this data for utilization and quality improvement opportunities, alerting each key stakeholder of meaningful utilization variance, gaps in care, or coordination opportunities that need to be addressed. A host of cloud-based applications can then aid stakeholders to facilitate action in addressing those opportunities accordingly.
Technology sets the stage for high performance, but it’s only part of the VIDN equation. Clinical and operational services are vital to attaining the full benefits of a value-based health care model — along with legal review during development, to ensure that VIDN structure and operations address all applicable laws.
A thriving VIDN relies on accountable care experts to instill and steward these success factors, including:
- Care coordination: Outstanding care coordination is the foundation of every aspect of the patient experience, including improved access to care and prevention and services such as inpatient management and transition management.
- Collaboration with payers and providers: Effective engagement builds trust as teams partner to ensure transparency of data, implement aligned incentives, and convene regular collaborative planning sessions.
- Analytic support: Experts apply information and tools to provide timely, actionable insights regarding population analysis, cost management, and quality management.
- Operational support: Field agents support each phase of VIDN development, from conducting readiness assessments and reviewing capabilities to analyzing performance, monitoring and managing contracts, and providing documentation and coding services where appropriate.
- Strong leadership: Experienced professionals guide the organization in transforming culture, deepening engagement, and coordinating care across the continuum.
- Team approach: Engaging and empowering every member of a patient’s health care team requires a shift in organizational culture to support enhanced teamwork, quality of care, and value creation.
Appropriate support of these clinical and operational success factors guides the entire continuum of care to create significant value and accelerate results. A VIDN that encompasses these components can match the success of traditional IDNs without requiring ownership of the entire system.
Most organizations will undergo a paradigm shift as they evolve from fee-for-service reimbursement to value-based reimbursement. Effective delivery of quality and cost improvements through a VIDN calls for careful planning, design, and management of these factors:
- Aligned incentives: Value-based incentives drive improved performance by rewarding results that connect clinical and financial outcomes. Alignment of these measures motivates the individual behavior and organizational culture that are critical for improving quality and reducing costs. Importantly, VIDNs equip health plans to meet physicians where they are, from assessing their experience with accountable care to providing effective support.
- Patient-centered: Each VIDN component puts patients first, and network success hinges upon getting the consumer aspect of health care right. Health plans and providers that deliver patient-centered health care improve their system’s clinical and financial performance, as well as the health of members and communities.
- Information: Meaningful, evidence-based clinical decision support enables better care. Transparent clinical and financial data needs to be gathered effectively across the continuum of care, and the quality of its usability is crucial for success. Providers need actionable information at the point of clinical thought, not a massive report of unintelligible data.
- Health information technology (HIT): Secure use of HIT to gather and share data improves patient care through newer technology and tools. VIDNs build physician engagement, trust, and improved performance by customizing tools to fit physician needs and delivering comparative, transparent information. For example, a scorecard that informs doctors about how their group compares to market averages, or which patients have not had breast cancer screenings in the past two years, alerts medical decision makers to opportunities and provides a clear view of performance.
- Accountable physician quarterbacking care: In accountable delivery systems, each patient is assigned to a physician who oversees complete coordination across the continuum of care. Accountable physicians take responsibility for seeing that every patient receives the right care in the right setting and at the right cost.
VIDNs enable high-quality, cost-effective care
There is a clear path for health plans and hospital systems to engage providers in ways proven to positively influence behavior, lower costs, and improve outcomes. VIDNs position health plans and providers to deliver better care and help bridge the current gap in value.
Successful VIDN implementation also enables a health care system to establish competitive market advantage. By instituting a continuous cycle of care coordination that enhances satisfaction and outcomes among patients and providers, a plan generates cost savings that can be used to reduce member premiums, improve product offerings, and expand enrollment.
Free from the traditional IDN burdens of ownership, VIDNs prepare organizations for the next era of health care with an integrated delivery system that aligns value, insights, and coordination. Accountable delivery systems that develop fully engaged, collaborative, and high-performing VIDNs can lead the way in enabling better health through high-quality, cost-effective care delivery.