Like the storybook emperor who got caught in a fabric of fiction, healthcare delivery networks may be heading into the marketplace embarrassingly underdressed.
These new conglomerations of care sites have a certain appeal-but only if they're clad in a stylish design called "integration."
Executives who plunge ahead this year with business strategies based on integration should check first that they have done enough to weave information systems into their provider networks. If not, they won't have the substance behind the idea.
They may have diligently commissioned a patchwork of technology, but it may not cover all the right places and may not be held together by special network-strength threads.
Even if payers buy into the integration promise, networks may be fooling themselves and undermining their bottom line if they accept risk for the well-being of patients only to find out they can't manage them without systems to follow their every move. Alas, they are "integrated delivery networks" in name only.
Look for healthcare networks to take a hard look in the mirror to identify informational shortcomings this year as the stark demands of managed care become all too apparent.
The shortcomings of information strategy already are making an impact among HMOs, including Oxford Health Plans and PacifiCare Health Systems, mainly because of their inability to manage the business office.
As delivery networks take on risk, the impact of insufficient information will be felt in a lot more places.
For example, hospital-centered networks finally are releasing their grip on patients and sending them to less-intensive settings for care because of incentives in managed-care contracts. But because of their orientation, by some estimates most system-building has centered on computerizing the 30% of their business now represented by inpatient care.
As a result, they are largely in the dark about the 70% they now must manage in such settings as outpatient clinics and physician offices.
Besides making sure they have information systems in the right places, delivery networks have to harness the collective value of multiple systems by custom-fitting a networkwide infrastructure. Only then will they be able to relay data from one place to another and yield reports needed for informed decisionmaking.
Look for stepped-up spending and a higher priority on computer network development, a separate project from software acquisition that has captured most of the attention up to now. Executives will be looking not only for the high-tech cabling and switching involved but also the expertise it takes to build such a complex network and keep it running.
For the fortunate few with a good information foundation, benefits of their innovation should be emerging in 1998. Look for the payoffs in lower costs, greater ability to manage patients and evidence of improved clinical and financial outcomes.
Those payoffs likely will come first from the inpatient side, where retooling of information services has been going on the longest. But the real test will be whether networks can strut out measurable benefits of computerizing physician operations.
If so, the networks will earn and flaunt the integration label.