Скачать презентацию Pulling The Pieces Together Consolidation and Integration in Скачать презентацию Pulling The Pieces Together Consolidation and Integration in

587d2784248775bbbe6d6e8f53b54324.ppt

  • Количество слайдов: 31

Pulling The Pieces Together: Consolidation and Integration in Health Care Systems Gloria J. Bazzoli, Pulling The Pieces Together: Consolidation and Integration in Health Care Systems Gloria J. Bazzoli, Ph. D. Professor of Health Administration Virginia Commonwealth University

Consolidation and Integration in the Hospital Industry • The hospital industry continues to become Consolidation and Integration in the Hospital Industry • The hospital industry continues to become more structurally consolidated over time. • However, service integration and coordination within structurally consolidated organizations has lagged behind. • Some success has been achieved and new market imperatives are making systems rethink the importance of selective service integration.

Overview of Presentation • Discuss trends in structural consolidation activities • Examine data on Overview of Presentation • Discuss trends in structural consolidation activities • Examine data on operational/service integration that accompanies consolidation • Discuss barriers and facilitators to operational/service integration • Speculate on what’s on the horizon in terms of structural consolidation and service integration

Structural Consolidation Activities in the Hospital Industry Structural Consolidation Activities in the Hospital Industry

Modern Healthcare: Annual Merger and Acquisition Activity* 1998 1999 2000 2001 # of deals Modern Healthcare: Annual Merger and Acquisition Activity* 1998 1999 2000 2001 # of deals # of involved hospitals 198 687 142 530 129 318 95 272 2002 60 163 2004 68 100 *Defined by MH to include: mergers, system acquisitions, joint ventures, long-term leases and other partnerships involving coordinated activity. 84 170

American Hospital Association: Multi-Hospital Arrangements 1998 2000 2002 2003 Multi-Hospital Systems: # of systems American Hospital Association: Multi-Hospital Arrangements 1998 2000 2002 2003 Multi-Hospital Systems: # of systems 271 296 299 319 # of hospitals 2, 387 2, 382 2, 400 2, 424 47. 6% 48. 5% 48. 7% 49. 5% 247 n. a. 1, 325 1, 284 1, 330 26. 9% 26. 1% 27. 2% % of US community hospitals Multi-Hospital Networks: # of networks # of hospitals* % of US community hospitals *approximately 55% of network hospitals are also in systems

Changing System Acquisition Strategies • 1980 s: – Small, financially weak urban hospitals were Changing System Acquisition Strategies • 1980 s: – Small, financially weak urban hospitals were most common acquisition targets • 1990 s: – Large, technically advanced urban hospitals in good financial position were most common acquisition targets • 2000 s: – Rural and small urban hospitals that are financially strong are most common acquisition targets

MSA Geographic Dispersion of Health Systems # of MSAs in which system owns hospitals MSA Geographic Dispersion of Health Systems # of MSAs in which system owns hospitals 1990 1994 1998 2003 1 MSA 56. 5% 60. 1% 60. 5% 63. 9% 2 MSAs 13. 3% 13. 1% 13. 7% 14. 1% 3 MSAs 8. 2% 6. 3% 6. 9% 7. 2% 4 MSAs 5. 9% 3. 1% 4. 0% 2. 8% 5+ MSAs 16. 1% 16. 6% 14. 9% 12. 0% Source: Author analysis of AHA data.

Health System Involvement in Physician Arrangements and Insurance Products 1998 2000 2002 2003 Physician-Hospital Health System Involvement in Physician Arrangements and Insurance Products 1998 2000 2002 2003 Physician-Hospital Arrangements: % with contractual affiliations* 49. 2% 35. 7% 29. 2% 26. 5% % that own physician practices 23. 4% 20. 1% 17. 6% 18. 2% Provider-Owned Insurance Products: % with HMO products 21. 3% 18. 7% 15. 0% 15. 2% % with PPO networks 22. 2% 18. 7% 15. 9% 14. 9% *includes the old hospital-sponsored IPAs, PHOs, MSOs Source: Author analysis of AHA data.

Conclusion: Structural Consolidation in Hospital Industry • Consolidation pace slowed after late 1990 s Conclusion: Structural Consolidation in Hospital Industry • Consolidation pace slowed after late 1990 s but Modern Healthcare data indicate a recent, small upswing especially in rural or small urban areas. • Multi-hospital arrangements represent a dominant organizational form in most markets – over 60% of US community hospitals involved in a system or network – increasingly focused on horizontal consolidation rather than vertical integration • Multi-hospital systems increasingly localized; urban health systems typically operate hospitals in just one metropolitan area.

Operational and Service Integration in Consolidated Hospital Organizations Operational and Service Integration in Consolidated Hospital Organizations

Commonly Identified Objectives of Structural Consolidation • Strengthen combined financial position of involved organizations Commonly Identified Objectives of Structural Consolidation • Strengthen combined financial position of involved organizations • Consolidate duplicative administrative and support functions to achieve cost efficiencies • Centralize certain service lines to improve organizational and patient outcomes

Operational/Service Integration and Hospital Mergers • Several studies examined organizational change implemented by hospitals Operational/Service Integration and Hospital Mergers • Several studies examined organizational change implemented by hospitals that undergo full-asset merger • Types of operational/service integration examined: – Elimination of redundant administrative functions – Consolidation of support functions and departments (i. e. , laundry, housekeeping, pharmacy) – Consolidation of selected clinical departments (i. e. , cardiac surgery, pediatrics) – Consolidation of all patient care into one physical location and close/convert other institution

Operational/Service Integration and Hospital Mergers: 1990 s Operational Change Consolidate Administration Consolidate Support Depts. Operational/Service Integration and Hospital Mergers: 1990 s Operational Change Consolidate Administration Consolidate Support Depts. : % Implementing 87% -- medical support 21% -- non-medical support 26% Consolidate Clinical Services: -- inpatient pediatrics 29% -- OB/GYN 32% -- inpatient psychiatrics 7% -- cardiac surgery 1% Convert Service Line 35% Closed a Facility 7% Source: Bazzoli et al. (Health Care Management Review 2002)

Service Centralization and Integration in Health Systems • Studies have examined changes in service Service Centralization and Integration in Health Systems • Studies have examined changes in service organization among affiliate hospitals in health systems • Local systems can rearrange services so that particular service lines are concentrated in one or a few facilities rather than dispersed • Many systems identified this as an objective in the early days of IDS development

Service Centralization and Integration in Health Systems • In Bazzoli, Shortell, et al. (HSR Service Centralization and Integration in Health Systems • In Bazzoli, Shortell, et al. (HSR 1999), we developed an index of hospital service centralization: – low value for a service area indicates dispersion of services throughout a system – higher value for a service area indicates centralization of services in one or a few hospitals in a system • Values of index typically range from a low of 0 to a highest value of. 35 to. 45.

Service Centralization and Integration in Health Systems Index of Service Centralization 1998 2000 2002 Service Centralization and Integration in Health Systems Index of Service Centralization 1998 2000 2002 2003 Surgical Services . 041 . 058 . 065 . 064 Hi-Tech Services . 064 . 080 . 096 . 101 Cardiac Care Services . 090 . 098 . 097 . 103 Diagnostic Services . 051 . 050 . 059 . 058 Psychiatric Services . 100 . 112 . 117 . 127 Long-Term Care Services . 074 . 084 . 091 . 089 Source: Author analysis of AHA data.

Conclusion: Operational/Service Integration in Consolidated Organizations • Among hospitals undergoing full-asset merger: – very Conclusion: Operational/Service Integration in Consolidated Organizations • Among hospitals undergoing full-asset merger: – very successful in reorganizing and consolidating administrative functions – limited success in consolidating clinical services • Among hospital systems, levels of service centralization are: – low given maximum of service centralization index – but have been increasing in a few select service areas

Barriers and Facilitators to Operational/ Service Integration Barriers and Facilitators to Operational/ Service Integration

Model of Change: Operational and Service Integration Internal and External Influences Administrative Integration Support Model of Change: Operational and Service Integration Internal and External Influences Administrative Integration Support Function/ Dept Integration Generally, hospital organizations able to achieve quickly due to: • lack of strong stakeholders • hierarchical structure 3+ years Clinical Service Integration Except for low volume services, agonizingly slow process fraught with barriers

Barriers to Service Integration • Lack of buy-in among physicians and other key staff Barriers to Service Integration • Lack of buy-in among physicians and other key staff • Lack of patience in undertaking a long, slow process • Lack of good data to establish measurable objectives in implementing change a priori and assessing progress ex post • Community resistance • Distractive influence of short-term gains

Facilitators to Successful Service Integration • Important management dimensions: – Creation of a centralized Facilitators to Successful Service Integration • Important management dimensions: – Creation of a centralized decision-making authority spanning the involved organizations – Clear, sensible description of value to be derived through the activity – both short-term and long-term – Commitment of staff and budget to implementation process – Development of information systems that allow sharing of data across system hospitals – Development of budgeting policy and practices that promote coordination across service lines

Facilitators to Successful Service Integration • Important management dimensions (continued): – Investment in core Facilitators to Successful Service Integration • Important management dimensions (continued): – Investment in core capabilities and supporting infrastructure – Pacing is everything – balancing swift, deliberative action and slow, deliberative action – Clear, strategic communication

Facilitators to Successful Service Integration • Unrelenting environmental pressures: – Several studies found that Facilitators to Successful Service Integration • Unrelenting environmental pressures: – Several studies found that as hospitals gained market power relative to payers in early 2000 s, they backed away from service integration – Why go through “the pain” if you already achieved some of “the gain”?

Changes on the Horizon Changes on the Horizon

Changes on the Horizon • Many hospital systems are currently involved in renovation or Changes on the Horizon • Many hospital systems are currently involved in renovation or new construction: – this provides opportunity to think about organization of services not only within a hospital but across hospitals – does it make sense to rearrange services so that certain service lines are focused in certain hospitals? – key focus should be on the most effective use of space and creating throughput efficiencies

Changes on the Horizon • Hospitals are also responding to specialty facility threat in Changes on the Horizon • Hospitals are also responding to specialty facility threat in many markets: – one response is building centers of excellence and hospital -within-hospitals focused on threatened service lines – in some instances, these actions give physicians ownership or new revenue opportunities – given evidence that patients and their families like the amenities and atmosphere of specialty hospitals, how do we design these features into centers of excellence and hospital-within-hospitals?

Changes on the Horizon • Overall, rethinking service organization makes sense given current market Changes on the Horizon • Overall, rethinking service organization makes sense given current market imperatives and opportunities: – future actions to reorganize services should be informed by what was learned in the past – further, the realities of new market imperatives needs to be explained to key stakeholders because they are quite different from those of the past.

Suggested Readings • Alexander, JA, Halpern, MT, Lee, SY, “The Short-Term Effects of Merger Suggested Readings • Alexander, JA, Halpern, MT, Lee, SY, “The Short-Term Effects of Merger on Hospital Operations, ” Health Services Research 30(February 1996): 827 -848. • Bazzoli, GJ; Lo. Sasso, A; Arnould, RJ; and Shalowitz, M. “Hospital Reorganization and Restructuring Achieved Through Merger, ” Health Care Management Review 27(Winter 2002): 7 -20. • Bogue, RJ; Shortell, SM; Sohn, MW; Manheim, LM; Bazzoli, GJ; and Chan, C; "Hospital Reorganization After Merger, " Medical Care 33(July 1995): 676 -686. • Burns, LR et al. “The Fall Of The House of AHERF: The Allegheny Bankruptcy, ” Health Affairs 19(January-February 2000): 7 -41

Suggested Readings (continued) • Cuellar, AE and Gertler, PJ, “Trends In Hospital Consolidation: The Suggested Readings (continued) • Cuellar, AE and Gertler, PJ, “Trends In Hospital Consolidation: The Formation Of Local Systems, ” Health Affairs 22(6): 77 -87. • Cuellar, AE and Gertler, PJ, “How The Expansion Of Hospital Systems Has Affected Consumers” Health Affairs, January/February 2005; 24(1): 213 -219. • Lesser, CS and Brewster, LR, “Hospital Mergers and Their Impact on Local Communities, ” in Ginsburg, PB and Lesser, CS (eds. ), Understanding Health System Change, Chicago: Health Administration Press, 2001, pages 19 -36. • Kastor, JA, Mergers of Teaching Hospitals in Boston, New York, and Northern California, The University of Michigan Press: Ann Arbor, 2001.

Suggested Readings (continued) • Shih-Jen KH; Chan, L; and Kidwell, RE; “The Implementation of Suggested Readings (continued) • Shih-Jen KH; Chan, L; and Kidwell, RE; “The Implementation of Business Process Reengineering in American and Canadian Hospitals”, Health Care Management Review, 1999, 24(2): 19 -31. • Walston, SL; Burns, LR; and Kimberley, JR, “Does Reengineering Really Work? An Examination of the Context and Outcomes of Hospital Reengineering Initiatives” Health Services Research 34(February 2000): 1363 -1388. • Wicks, EK; Meyer, JA; and Carlyn, M; “Assessing The Early Impacts of Hospital Mergers: An Analysis of the St. Louis and Philadelphia Markets, ” working paper/monograph of the Economic and Social Research Institute, Washington, DC, January 1998. • Woodard, B; Fottler, MD; and Kilpatrick, AO; “Transformation of an Academic Medical Center: Lessons Learned from Restructuring and Downsizing, ” Health Care Management Review 1999 24(1): 81 -94