Shifting the mindset from being a hospital system to a health system
The seismic shift to outpatient care is affecting nearly every facet of the delivery system.
Hospitals are rethinking their definition of market share, growing their clinic models and investing in telehealth. The drive to restructure the way care is delivered is so dramatic that organizations like Mercy now think of themselves as a large clinic that operates hospitals, said Michael McCurry, chief operating officer of the Missouri-based system.
Increasingly, COOs are leading this change across their organizations, ensuring that care coordination, reimbursement and technology systems are aligned. Modern Healthcare reporter Alex Kacik recently conducted a roundtable conversation with McCurry; Tracy Rogers, COO of Ascension Wisconsin; and Michael Hulefeld, COO of Ochsner Health System in Louisiana, to gain a deeper understanding of how the push to outpatient care affects operations and overall strategy. The following is an edited transcript.
Modern Healthcare: How is outpatient care evolving, especially as we see a growing number of procedures move to that setting?
Tracy Rogers: We obviously see outpatient care growing exponentially, and, more importantly, we see it evolving through more diversified offerings, so in addition to our physician clinics and retail clinics, we see more imaging centers, micro hospitals, surgery and procedure centers, off-hour clinics. So, again, emerging in many different forms and shapes.
Michael Hulefeld: The vast majority of our capital investment right now is going into outpatient areas, whether it's cancer centers or imaging center expansion. We view telehealth as in this bucket as well. It's something that's really going to take off over the course of the next couple years, so we're very focused there as well.
Michael McCurry: Our doctors fundamentally believe that by taking care of people in their homes, keeping them well, you get better health and lower cost. So, it's really central to the model of care that we are pursuing.
MH: Tracy, in your response you brought up new entry points that we've seen proliferate. What impact does the growth in retail clinics, urgent-care centers, virtual access have on the overall outpatient-care strategy?
Rogers: As Mike noted, it is having an impact on our ability to deliver value at a lower cost, and we see it's really engaging our patients in their care delivery as well.
Hulefeld: The other large component and strategy of ours is around care coordination. All the members of our group practice are on Epic, so every test, every outpatient procedure, every result is at the fingertips of everyone who practices with us. I think, the way that you get lower cost is through reduction, duplication and utilization. That's certainly a big key for us because outpatient care can be very disparate if we're not careful about it.
McCurry: Consumerism is our strategy. Every five to six years, we set a new strategy. Right now it's called the Vision 2020. It is a way we can bring to bear all of our capabilities in virtual care, in care management, which we believe we are very good at, and surround the patient with options that give them quick access to the closest location that can take care of them. We're involving consumers in the way we build locations and the way we build services. We're trying very hard to respond to what they tell us are their key needs, and also innovating in ways that we think people might not bring up but will satisfy them in the long run.
MH: When you look at consumerism taking a larger role in healthcare and how the outpatient model is affected by that trend, what influence has consumerism and the push toward value-based care had on the delivery of healthcare?
McCurry: It's completely changed it. Consumerism is about meeting patients where they are. It is providing services that they want in the time frame they want at a price point that they can afford. The big problem in healthcare is that folks can't afford the high-deductible plans. We're a large religious ministry not-for-profit health system, and our charity care almost doubled between 2015 and 2017. It was driven by people who have insurance, which traditionally has been the sweet spot for health systems. It was the high deductible that they simply couldn't pay and they would apply to us for help. To combat that, we're trying to build services in those convenient locations that have a price point that is affordable. We're trying to build that into our consumer strategy, along with a care model that gets them the care that they need and not more, seeks to proactively care for them, not reactively. We think that it's a winning strategy in the markets we serve.
Hulefeld: We're taking a very similar approach. We've got to go to where the patients are, meet them when they want to be met, and again, make it affordable.
Rogers: The core of consumerism is this desire by our patients to “do nothing to me without me.” For us, it's helping them connect the dots in a very complex healthcare environment. As we see this shift to outpatient, there are more dots to connect. That allows us to play a very vital role in engaging the patients, giving them information so that they can make informed decisions about their healthcare.
MH: As we've seen this shift that requires greater coordination, things get a little more complicated. How do you ensure that care is standardized and there isn't as much variation, that communication is coordinated across various platforms?
Rogers: It's incredibly important that we optimize the care that we provide. We use very focused dashboards and metrics processes that we carry forth across the continuum of care. We are literally unyielding in staying at that intersection between efficiency and effectiveness. While being good stewards of our resources is essential, we never drive cost containment at the risk of detracting from the quality that we provide, and I think if you keep that at the forefront, then we ensure that we are, again, hard-wiring that efficiency and effectiveness of the care but keeping the outcomes.
Hulefeld: A couple months ago, we acquired the largest urgent-care provider in the region with 14 different sites. We had two non-negotiables as we went through that process. The physicians will join our clinic and therefore meet our credentialing requirements and ensure that we have consistency and appropriate levels of quality. And secondly, that they would move off their existing IT platform and go to Epic, which is our systemwide platform, so that, again, we can provide the care coordination, reduce the duplication or unnecessary variation. As we approach outpatient growth and, as you mentioned, become more regionwide and more geographically dispersed, we've really had to define the philosophies under which we're going to do this, or else it could become again a very disjointed sort of approach or system. We worked pretty hard to define how we're going to grow. We've got to make sure that we are working with like-minded physicians and organizations in that growth.
McCurry: Our core operating philosophy is driven around providing the value proposition to the communities we serve of high quality, high service, low cost, and we really mean that. We've made some huge investments to help support that. One of them is in CarePATH. Inside the hospital, we take the sickest among us, which is where quality improvements are, and we automated those CarePATHs so that when a person comes in and gets a diagnosis we can tell you everything that's going to happen and when it's going to happen over the next couple of days. The second big investment is analytics. In healthcare, the problem is that we've always tried to deal with everything, everything is important, but to make improvements you really have to address the exceptions. Analytics has helped pinpoint the challenges and the opportunities and we've been able to focus. The third big investment is in virtual care, and I'm really excited about some of the work that's going on there. We have a program called [email protected], which uses telehealth to bring care to the sickest of the sick, folks with many co-morbidities. One example, our test case, a patient over nine months had 13 hospitalizations at a cost of over $500,000, and her quality of life was awful. She felt like she had no life. Her goals were simple. She wanted to play bingo on Tuesday nights and be able to be with her family on the weekends. We gave her all of the virtual care stuff that we use, and the rest of her life she had no hospital inpatient episodes, only had one ER visit, and reported a much improved quality of life at an obviously significantly reduced cost. It's those investments that are driving our ability to provide higher-quality care at a lower price point, and the patients still love it, so we get high quality service scores.
MH: You all bring up points in terms of growing market share and investing in various programs that are helping you stay up-to-date and evolve. How do you view outpatient care in terms of growing market share?
Rogers: Market share has the connotation of being more about inpatient. As we think through outpatient care, it reframes the conversation to think more about how we care for patient populations and how we serve our communities in totality. I love Michael's example about virtual care. In Wisconsin, we have very diverse populations from metropolitan markets to very rural healthcare communities. In our rural communities, we are also using virtual care to really reach areas that are very hard to recruit; there's a dearth of specialists available. In our critical-access hospitals and in our rural health clinics, we utilize virtual care to leverage specialists in our more metropolitan communities to provide consultative support into our primary-care clinics, allowing care to remain local but still providing that very high level of access to specialty medicine that they would not be afforded elsewhere. We're still managing and caring for those patient populations, but it really kind of redefines how we would traditionally think about share.
Hulefeld: One of the most important statistics we look at every month is the number of unique patients within our clinics. We look at visit volumes and revenue, but the real driver is are we capturing more lives into our physician group? To me, when I think about market share in the outpatient setting, that is the predictor of future success and the most important step that we can really focus upon. The other thing we've thought about looking at is how do we have a primary-care physician practice within a five- to 10-minute drive of 80% of the population? How do we go to where the patients are? Certainly, we're investing in telehealth as well, but there's always going to be those situations we feel where people are going to want that access nearby to a primary-care physician. As we think about market share, it's also the geographic coverage and ensuring that we're where patients need and expect us to be.
McCurry: In our largest market in St. Louis, we've seen our inpatient share increase by a few percentage points over the past seven years, but our outpatient share has quadrupled. Today, we have almost twice as much outpatient share as any other health system in St. Louis, but only small, incremental improvements in inpatient share. That tells us it's not trickling down like it used to. When you're really focused on utilization, trying to keep people well, that's a reasonable expectation. We think it shows a tremendous improvement in the cost of care. We're caring for four times as many people, but it's not really increasing our hospital inpatient utilization. It's fairly new information, but the only rational conclusion that we've come to is that we're doing a better job with hospital utilization. When we look at the population of people cared for and hospital utilization in that population, we've seen a significant decline in utilization of hospitals on a pro rata basis.
MH: Are there some specific obstacles that you've overcome in setting up these outpatient networks?
Rogers: One of the biggest issues that we have is shifting from just thinking of our systems as hospital systems versus healthcare systems. We work very diligently on our network of 26 hospitals and thinking of ourselves as not a hub-and-spoke model, but a spoke-and-hub model. I use that sequence very deliberately because our goal is to keep healthcare as local as possible and only shifting patients to higher, more acute levels of care when it is necessary so that we make those commitments to the community and, again, build on that continuum of care as an integrated system of care.
Hulefeld: We've set up our leadership structure around service lines so that as we create outpatient imaging centers across the region and our physical therapy sites across the region, we look at how we going to operate these in a consistent fashion as we become more geographically dispersed and as we develop new partnerships. That certainly has been the structure that we've leaned on to try to create the consistency as well as the efficiency that we need to get. And as you grow, the world does become more complex. That's why making sure we're working with like-minded partners and providers is so important to us, so that people have the same goals.
McCurry: So, a lot of interesting similarities. Tracy mentioned seeing themselves as a health system. Mercy has crossed the barrier of no longer seeing ourselves as a hospital system, but seeing ourselves as a clinic that operates hospitals, and it changes the world when you change that perspective. Today, we see ourselves as a very large clinic. Accordingly, our focus in dealing with a shift to the outpatient world has been physician leadership. Our care model is driven by the physicians, and we've tasked ourselves with being able to deliver care efficiently and not bankrupt the company in a care model that seeks to provide care at home that often times, most times, doesn't have a billing code associated with it. To do that, we've changed our physician pay plan significantly and provided incentives to doctors that are based on the entire health system meeting its goals and taking on transformational activities. We have one contract for all physicians.
MH: What does the future hold for outpatient care?
Rogers: What we've seen to date is just the tip of the iceberg. Outpatient care is going to continue to innovate. This is going to be a core competency for healthcare leaders. Overall, it's going to see new entrants in this space and potentially some very interesting partnerships from some nontraditional partners. I also think that the innovation that we will see is really going to be driven in large part by consumers with the growth of even more active consumerism than we've ever seen before.
Hulefeld: Telehealth will play a bigger role. What we think of as an outpatient center today might look drastically different. It might be people's residence 10 years from now. And then, I also think that, going back to some of Mike's comments, the growth in outpatient is really dwarfing the growth in inpatient. I think you're going to see some traditional inpatient hospitals evolve into outpatient centers, free-standing emergency departments, urgent-care physician practices and traditional outpatient services, but the need for an inpatient bed is just not going to be there going forward.
McCurry: I think it will be like it was in the 1960s in this regard, that almost all care will be provided in an outpatient-based facility, and hospitals will be really specialized in the care they provide and for really sick people with lots of problems.
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