Don't do everything—a strategy to reduce costs, improve results

"World-Class Care Right in Your Neighborhood” sounds good as a marketing campaign, but as a strategy for healthcare systems, it is too often a formula for high-cost, mediocre care. To deliver value, there is a virtue to volume—concentrating patients with similar needs at sites where integrated teams can deliver better outcomes with increasing efficiency.

That means providers should not try to do everything everywhere, and that patients should be willing to travel a little further to get coordinated, higher-value care.

We do not mean going to teaching hospitals for every problem. On the contrary, to deliver value, routine care should be moved out of tertiary hospitals to lower-cost settings. But community hospitals should not try to meet all the needs of the patients in their local communities, if these needs can be addressed better and more efficiently elsewhere in the hospital's system or through affiliation with other well-equipped institutions.

It is not easy for community hospitals to give up services such as bariatric, cardiovascular and thoracic surgery—particularly if they are currently profitable under fee-for-service payments. But the harsh reality is that when every hospital in a region provides such services, patient volumes are diluted and at many institutions are insufficient to support the multidisciplinary, closely knit teams needed for real excellence. Also, costs are higher because staff cannot work efficiently, and supporting services needed for the condition (e.g. tailored nutrition counseling) are unavailable, inconvenient, or high-cost.

Consolidating and concentrating volume in fewer locations is the right thing to do for patients, for society and for delivery systems. When the volume of patients with a particular condition is concentrated, providers can build what we call “integrated practice units”—multidisciplinary teams that are completely focused on meeting the most common needs of patients with that condition over the full care cycle. In treating more patients with a particular condition, outcome and cost measurements improve, which can enable gains in quality and efficiency, led by team leaders who wake up every day thinking about how to do a better job. Volume also allows the institution to contemplate bundled-payment contracts, as well as incentives (financial and non-financial) to reward clinicians for improving outcomes and efficiency for the condition.

This is not an idealistic fantasy. We are starting to see many health systems begin to rationalize services to fewer and more appropriate hospitals and sites. The Emory Healthcare system in Atlanta has consolidated otorhinolaryngology and infusion services at one of its community hospitals, and laboratory facilities at its teaching hospital. The Cleveland Clinic has shifted obstetrics out of its main campus into community hospitals, reduced the number of trauma centers and concentrated cardiac surgery at three locations.

Can consolidation save lives as well as improve value? Look at what happened starting in 2010, when London concentrated immediate care for patients with stroke at eight of its 34 hospitals. At these eight geographically dispersed hospitals (no citizen is more than 30 minutes away), multidisciplinary stroke teams are on duty 24/7. Stroke volumes at each of these sites went from between 200 and 400 per year to well over 1,000. The results—a 25% decline in 90-day mortality, and a 6% decrease in total spending on stroke care, despite the greater number of survivors.

Providing care in fewer sites goes against longtime cultural norms in medicine that assume everyone does everything in their specialty, and that physician autonomy is the best guarantee of good care. But the imperative to improve value and cope with declining reimbursement means that we must re-examine not only these norms, but many others. Pride must come from excellent outcomes and efficiency, not variety in a physician's workday.

For patients, driving a little further—sometimes passing by the local hospital that has provided all their previous care—might seem like an inconvenience. However, getting care at an integrated practice unit will not only lead to better outcomes, but far greater convenience, because a team can better coordinate care, schedule multiple appointments on the same visit and provide the support services needed to reduce the time to recovery.

What about the effect of consolidation on competition? We are advocating a reduction in the often dozens of duplicative sites in a region, many part of the same health system. Experience from other industries suggests that as long as there are three to four effective competitors in an area, competition becomes stronger and value rapidly improves. This step is a win-win-win. For patients, for providers and for society.