Health systems are working to live up to their name

U.S. hospital chains call themselves “health systems.” But how many really are?

Hospitals have been rapidly consolidating across the country into large not-for-profit and for-profit companies containing dozens of hospitals and hundreds of clinics and other care sites in multiple states. 

But that doesn’t necessarily make them what experts consider an organized system of care.

A true health system uses the best scientific information to spread best practices across all its sites and produce consistently high-quality clinical results and patient experience, said Jeff Goldsmith, a national adviser at Navigant. To qualify as a system, the organization must actively manage the cost of care by minimizing waste and eliminating avoidable clinical complications. 

Some call that “systemness.” The acid test, Goldsmith argues, is whether patients and their families recognize the quality and consistency of the company’s product and recommend it to other people.

Critics say the growing provider chains generally have not done much to achieve consistent operational processes, clinical protocols and outcomes, and patient experience across all their facilities. Most, they argue, are merely holding companies that collect provider assets, then use their size and market dominance to jack up prices. 

More than 27% of the 4,660 acute-care hospitals tracked by Medicare were owned by 20 hospital companies in 2017, while nearly 19% were owned by just 10 companies, according to the Modern Healthcare Metrics database. 

Mergers since then, such as February’s tie-up between Catholic Health Initiatives and Dignity Health, have increased concentration even more.

The industry’s rationale for this consolidation strategy is that larger entities have greater ability to reduce costs through bargaining clout and economies of scale, and that they’re better able to invest in improving quality of care and the patient experience.

Without systemness, however, critics question the societal value of these hospital mergers. Some urge policymakers and regulators to halt or even unwind them.

“There’s very little integration in these big systems,” said Dr. John Toussaint, a quality consultant and a former CEO of ThedaCare. “With a couple of exceptions, I’m not very optimistic about the way these big systems are being managed. They are shutting down people who could create systemness.”

Executives at multihospital companies disagree. They say they strongly believe in the need for clinical and operational integration across all their facilities. And they argue they’re on the road to achieving it—with the help of their size.

Executives for 10 hospital organizations interviewed by Modern Healthcare say they’re working hard to get consistent processes and results at all their sites. They point to many examples of clinical improvement initiatives that have yielded quality and cost improvements throughout their facilities.

Some of the organizations, like Ascension, St. Louis; Intermountain Healthcare, Salt Lake City; and Geisinger, Danville, Pa., have been working on standardizing their clinical and operational processes and outcomes for many years. Others, like UnityPoint Health, West Des Moines, Iowa; and Baylor Scott & White Health, Dallas, have started more recently as they’ve grown through mergers. (Nashville-based HCA Healthcare, the largest chain in the country, did not respond to requests for information.)

The rise of value-based payment, such as Medicare’s accountable care and bundled-payment demonstrations, has facilitated this work, many say.

But even the chains that have strived to create consistency have a long way to go. For example, there is substantial variation across their hospitals on a key patient satisfaction measure—the percentage of patients who would definitely recommend the facility. Ascension hospitals ranged from 52% to 93%, according to Modern Healthcare Metrics data covering 2017. Mayo Clinic hospitals ranged from 62% to 93%, Piedmont Healthcare from 55% to 80%, and Geisinger Health from 52% to 76%. Of the 10 companies, Intermountain Healthcare hospitals had the most consistency, ranging from 75% to 85%.

Executives argue that standardizing processes and outcomes across facilities not only benefits patients but helps the bottom line. 

Piedmont Healthcare CEO Kevin Brown said his Atlanta-based company has cut more than $400 million in costs other than labor in the past three years through projects such as reducing hospital-acquired conditions, standardizing supply purchases, and coordinating orthopedic implants.

“There is no doubt that the improvements we have made in quality have helped us with our financial performance,” Brown said. “We are not growing just to get bigger but to improve quality and reduce cost.”

Three years ago, UnityPoint ramped up its work in standardizing and improving hospital processes and outcomes across its nine regions in Illinois, Iowa and Wisconsin. 

One of its early efforts was reducing readmissions. Using data, Chief Analytics Officer Betsy McVay and performance-improvement teams in each region developed a “heat map” tool that helps care teams identify when a high-risk patient is most likely to return within 30 days of discharge.

The tool, presented in a user-friendly format, incorporates 70 factors including clinical and socio-economic issues to assess when patients are most at risk of readmission. The care team then customizes the patient’s plan, for instance scheduling a follow-up medical visit at the time of highest risk.

“You can’t underestimate the ongoing communication you need to have as you are driving change,” McVay said. “We’ve also learned that not everyone will come along for the ride right away, and you have to give people time.”

Leaders at these companies say that while changing practices across many hospitals and care sites poses tough challenges, having the resources of a large organization is essential for carrying out this task. Those resources are particularly needed to deploy data systems to analyze care processes and outcomes throughout the continuum of care.

Executives in charge of integration initiatives say the keys are to communicate a vision of continuous quality improvement, show staff how the proposed changes will benefit patients, use data to target and measure improvement efforts, and engage front-line staff in leading the initiatives.

“It starts with giving everyone a sense of why this project is going to help our patients and staff,” said Howard Kern, CEO of Sentara Healthcare, Norfolk, Va., which established a clinical integration program in 2013 after acquiring five hospitals demonstrating significant variation from Sentara facilities.

Leaders then have to reinforce the message that they will follow through on the effort for multiple years. “You have to make sure people see it’s a real commitment to making it happen,” he added. “After that, I find there’s very little problem in getting support or bringing hospitals along.”

Ascension launched its sepsis reduction campaign last year by sharing the story of a patient who died from the condition to show everyone why the project was important.

“We built it on the story of a patient to make it feel human to everyone,” said Dr. Mohamad Fakih, Ascension’s senior medical director. “We used flyers, posters, the web and our magazine. We talked about the high mortality and how improving behavior saves lives.”

Ascension said that from last July to this past March, its comprehensive package of changes saved 177 lives, reduced mortality by 6.5%, and saved $9.3 million.

Still, independent experts are skeptical. It’s an open question whether mergers are producing the quality and cost benefits CEOs promise, said Stephen Shortell, a health policy and management professor at the University of California at Berkeley. “Clinical integration is key,” he said. “But making these changes isn’t easy, and that’s why it’s kind of slow.”

Others say the task grows harder as organizations get larger. That’s because clinical improvement comes from deep engagement of front-line staff at each facility, and top-down mandates from headquarters can be counterproductive.

“What I see mostly is these big places bring in consultants and send out 100-page playbooks,” Toussaint said. “That fails miserably every time.”

Some see smaller, regional companies as better-positioned to achieve clinical and operational integration. “I think a regional system has an advantage in creating systemness,” Sentara’s Kern said. “National organizations have an issue with consumer trust in handling personal information. Consumers are going to look to connect with providers they trust.”

Big provider companies need to nurture a culture of continuous quality improvement and develop a system of spreading learning throughout the organization, said Dr. David Pryor, senior vice president and chief clinical officer for Ascension. A key element is recognizing that front-line staff in each market and facility have to take the lead in making changes. That requires a deft touch in balancing corporate directives and local control. 

“It’s the leadership at the individual organization level that makes change happen,” Pryor said. 

The importance of local leadership was clear when Mayo Clinic launched an effort several years ago to standardize the post-operative recovery process in gynecological surgery. That involved evidence-based changes in traditional practices, such as eliminating bowel preparation, trimming opioid use, reducing IV fluids after surgery, and letting patients eat and drink almost immediately after the procedure.

The changes first were tested at Mayo’s flagship hospital in Rochester, Minn. Six months in, the average length of stay for ovarian cancer surgery patients had dropped from seven to four days, and cost savings for all gynecological surgery patients totaled nearly $800,000.

After that, the revised post-recovery processes for gynecological surgery patients were rolled out to all Mayo facilities. 

There was resistance from some department chiefs, said Dr. Sean Dowdy, Mayo’s chair of gynecologic oncology. “In one instance we had to wait for a leadership change before rolling it out,” he said. “You can’t force-feed it. You have to have people buy in or it won’t happen.”

To increase local buy-in, Mayo implemented the new protocols through specialty councils for each department, with representation from all its regions. It’s continued to hone the original pathway, with successive rounds of innovation, better outcomes, and less variation among surgeons. “The best way to do it was through face-to-face meetings because there were some centers that needed more help,” Dowdy said.

Mayo’s experience illustrates why hospital company executives may hesitate to tackle system standardization efforts—it takes a lot of time and staff resources. Moving to one way of doing things roughly translates to about 50% more work every day for leaders and front-line staff, said Ben Umansky, a managing director at the Advisory Board. “System leadership consistently underestimates the time and effort it takes to get integration and systemness right.” 

Because of the resource demands, an organization may opt to remain a holding company and never embrace the challenge of integration, he added. 

Despite the difficulties, some are taking on that task anyway. They’re doing it out of a combination of commitment to patient safety and quality of care, market competition, desire to improve staff morale, and external pressure for providers to become more efficient and reduce costs.

Northwell Health’s leaders know their 23 hospitals are below the national average on patient experience survey scores reported on the CMS’ Hospital Compare website for quiet rooms at night. The hospitals also vary substantially among themselves both on that measure and their overall patient experience rating, scoring from two stars to four. So Northwell’s quality leaders have worked with clinical and operations staff at each hospital on a package of changes to enable patients to sleep restfully through the night.

Front-line staff have bought into the quietness project because they realize it generally makes no sense to wake patients up at night, said Sven Gierlinger, Northwell’s chief experience officer. The quietness campaign has prompted staff to identify other processes that need improvement. 

“When front-line staff think it’s about saving money, they aren’t engaged,” said Dr. David Battinelli, Northwell senior vice president and chief medical officer. “But when something is really a good idea that improves both provider wellbeing and patient experience, it’s easy to adopt.”