When you're rolling against the healthcare tide of focusing on core services, bigger appears to be better.
Even as integration has fallen out of favor--with some of the most successful system turnarounds keyed by exiting noncore businesses--SMG Marketing Group's latest Top 100 Integrated Healthcare Network ratings show that systems that do a better job of integrating are more profitable. The average profit margin for systems in the top 100 was 12.6%, compared with a 2.5% profit margin for the remaining 471 systems.
This is the fourth annual rating SMG has done for systems it tracks.
Systems in the top 100 this year averaged 48.3% more hospitals than the remaining systems studied by SMG, or 8.6 hospitals vs. 5.8 hospitals.
Topping the list is Sentara Healthcare, a six-hospital system based in Norfolk, Va. Sentara is the only system to rank in the top 10 each year that SMG, a Chicago-based healthcare information and marketing company, has compiled the list.
"We continue to focus on delivering clinically excellent care in a customer-focused way," said David Bernd, Sentara's chief executive officer. "The individual consumer is going to play a much bigger role in choosing where to have care."
Bernd's focus is supported by the book, The Changing Dynamics of Integrated Health Care: Case Studies of Market Leaders. Researchers Dean Coddington, F. Kenneth Ackerman Jr. and Elizabeth Fischer write that focusing on patients is "a traditional approach that is becoming more important" because patients have more freedom to choose a healthcare provider.
In conducting case studies of 11 successful integrated health systems, the authors also identified several other keys to good performance: having strong operational control over hospitals; gearing investments in information technology toward improving service, access, quality and coordination of care; and having a strategy that sees integration as a way to improve care.
In the SMG study, Sentara, with 82.58 points out of a possible 100 points, barely edged out last year's No. 1-ranked Intermountain Health Care of Salt Lake City (82.56 points) and Inova Health System, of Falls Church, Va., (82.54 points). Intermountain, Inova and No. 4-ranked OSF Healthcare System, Peoria, Ill., have made the list two years in a row. The fifth-ranked system, William Beaumont Hospital Corp., of Royal Oak, Mich., has made the top 10 for three years running.
Modern Healthcare will publish the complete list of the 100 recognized systems on its Web site, www.modernhealthcare. com.
The rankings are an attempt to quantify how well the systems have integrated the operations of their acute-care hospitals. SMG says it studies information systems, disease risk management, the system's primary-care base and its corporate mission.
Sentara has been working on integrating its physicians, hospitals and health plans for more than 10 years, Bernd said. Sentara employs 152 physicians and is affiliated with 2,200 others. The system also has 300,000 enrollees in its HMO, PPO and point-of-service plans. Sentara also is building another hospital with about 200 beds that is expected to open in 2002. All of the hospitals, including the planned facility, are in Virginia.
A key to its success at integrating was a process called "reinventing Sentara," Bernd said. Begun six years ago, it is an effort to take managers out of their day-to-day responsibilities for up to two years and deploy them to work on core clinical and financial processes, Bernd said.
On the clinical side, Sentara makes strides to provide "seamless healthcare," with information about patients and best practices shared between the emergency and inpatient departments and with the physician offices and home health agency run by Sentara, said Howard Kern, chief operating officer.