When 82-year-old Jack Schlichting was admitted to the Henry Ford Hospital in Detroit five years ago with a badly broken leg, he received standard hospital treatment: initial care in the trauma center, surgery and some time in the hospital recovering. But his discharge from the hospital did not mark the end of Schlichting's care by the Henry Ford Health System, a large, diverse health care organization that is an established leader in clinical integration.

While Schlichting recovered at his daughter's house, under the care of the Henry Ford home health care program, he went through extensive rehabilitation at another of the system's hospitals. All the while, his care was supervised by physicians of the Henry Ford Medical Group. He found a wheelchair through Henry Ford's durable-medical-equipment company and ordered his medication from the system's pharmacies.

His leg has healed and Schlichting is back on his feet, to the joy and relief of his daughter, Nancy M. Schlichting, president and CEO of Henry Ford Health System. "He's my poster child for integration," Nancy Schlichting says. "He never would have recovered, frankly, if not for the way this organization supported him. But he's not an atypical case because he's my dad; it's what we do."

The Henry Ford Health System is itself considered a poster child for the benefits, both in patient care and cost savings, of overcoming the fragmentation in the U.S. health care system. But it's not alone in striving to use clinical integration to improve collaboration and care coordination and foster innovation.

Throughout the country, integration is helping hospital systems overcome legal, institutional and cultural barriers that lead to redundancies and other inefficiencies. Legal hurdles include those presented by the antitrust and tax laws, Stark regulations, civil monetary penalty and antikickback laws.

Clinical integration is practiced to widely varying degrees. At its most basic, it might involve initiatives to improve coordination around a single disease, typically asthma or diabetes. At its most sophisticated, it might encompass fully integrated hospital systems with closed staffs consisting entirely of employed physicians. Most hospitals and health systems are somewhere in between. Two of them are profiled here: Henry Ford, and the Hospital Sisters Health System in Springfield, Ill.

Health care integration is likely to gain momentum and will get a big boost from the recently enacted Patient Protection and Affordable Care for America Act, which includes support for pilot integration projects and some partial regulatory relief for those pilots. According to the American Hospital Association, several provisions in the law may help overcome some barriers to integration:

  • Beginning in 2013, the Department of Health & Human Services must establish a national, voluntary, five-year pilot program on bundling payments to providers around 10 clinical conditions. If successful, the pilots may be expanded after 2015.
  • Beginning in 2012, hospitals, in cooperation with physicians, can voluntarily create accountable care organizations, which will be responsible for managing the care of certain beneficiaries, and the federal government can share some of the savings from improved care management with providers.
  • The Center for Medicare and Medicaid Innovation will be created by 2011 to test payment and service delivery models that improve quality and reduce program expenditures within certain limited geographic areas.

It's a start, says Stephanie McCutcheon, president and CEO of Hospital Sisters. "We appreciate the fact that we can have pilots that might allow us to have some Stark and antikickback relief. Now we have to define it and get it approved," McCutcheon says, adding, "And we'll do that."

The Henry Ford Way

When automobile mogul Henry Ford opened a hospital in Detroit, he envisioned a comprehensive and coordinated medical care center focused on patient care, research and medical education, with doctors employed by the hospital in the tradition of the Mayo Clinic.

Based on that legacy, executives at Henry Ford Health System say they've been practicing integration since the original hospital opened in 1915. The system is a tightly integrated network of hospitals, community clinics, laboratories, pharmacies, nursing homes and hospice—and even has a 10 percent share of the health insurance business in the Detroit metro area.

But as the system expanded in the 1980s and '90s, it fell victim to the same fragmentation that plagues the rest of the field: dissimilar medical records, semiautonomous hospital administrators, redundant technologies and health care specialization.

Over the past 10 years, the system has worked hard to confront those issues and achieve integration, which Schlichting describes as "a common experience—we call it the Henry Ford experience—across all of our sites of care."

Business systems including human resources, finance and IT have become highly integrated, which has allowed Henry Ford to reduce costs while improving clinical quality measurements at its community hospitals. The system integrated business practices and training facilities for osteopathic and conventional medical training. More recently, it coordinated the hospital laboratories, eliminating redundant equipment and processes.

Henry Ford is making great progress toward formalizing alignment strategies among the hospitals, the medical group and even the system's health plan, with the greatest level of integration on clinical strategies, such as medication adherence, says John Popovich, M.D., senior vice president for clinical affairs and chair of the department of internal medicine.

Enlightened Society

The greater challenge is increasing alignment with 1,400 to 2,100 independent physicians who are affiliated with the regional hospitals and have varying levels of collaboration, Popovich says. These physicians, who range from solo practitioners to members of large multispecialty practices, have their own cultures, with a variety of business models, medical records systems and technology.

They can be fiercely autonomous, he says, yet many recognize that integration with Henry Ford has much to offer, including business support, standardization of technological approaches, common electronic medical records, elimination of redundancy, and consistent measures of both business and clinical outcomes.

Alignment with these physicians is beginning, but slowly. Popovich describes the best efforts so far as "enlightened hospital-physician societies—physicians who get together for common good and deal with common problems."

The key to the future, in his opinion, is to be able to develop the type of integration framework that exists among Henry Ford's hospitals and the medical group, and "apply that to a pluralistic practice environment."

Popovich wonders, though, can it done if you're not in a "hierarchical medical group structure like Mayo or Geisinger or Henry Ford?" Barriers like antitrust laws and policies limit hospitals' efforts to reward efficiencies by nonaligned health care providers. Other barriers are more attitudinal, Henry Ford executives say, such as the strong autonomy of physicians.

"As time goes on, though, I think many people have realized that some of the things we can provide to our group practice physicians are things that private practice physicians need," Schlichting says, "whether it's IT capabilities or clinical resources, guidelines that help them improve their quality."

Success will come, Popovich believes, with the right formula that will include technology, performance measures that everyone can agree upon and appropriate support for medical professionals in practices of all shapes and sizes. At that point, the business of health care will be prepared for a payment structure that rewards both performance and efficiency.

"That's the Holy Grail of integration," Popovich says. "It's what most systems are striving toward now, and we're making some steps toward that."

Bringing It All Together

For Hospital Sisters Health System, the drive toward more efficient and accessible health care began in the dead of winter in 2007, when 18 leaders of hospitals, medical groups and other health care providers met in Chicago to discuss the future of health care in Illinois and neighboring Wisconsin.

Richard Rolston, M.D., who attended the summit as president and CEO of Wisconsin-based Prevea Health Network, credits Hospital Sisters CEO McCutcheon for "trying to bring all components of health care together" to prepare for a future influenced by health reform. The HSHS board of directors had recently identified integration as one of its guiding principles, and McCutcheon wanted to know, Rolston recalls, "what you need from us, so we can work closer together to improve patient care and make your lives better."

Over the next two years, the group that assembled in Chicago developed a plan that launched a multispecialty health care group—Hospital Sisters Medical Group, of which Rolston is now president and CEO—and led the system to merge with two existing medical groups: Prevea and Prairie Cardiovascular Consultants, a heart practice.

Medical records standardization was launched to connect these medical groups with the Sisters' 13 local hospitals and its newly formed Kiera Clinical Integration network, independent physicians willing to align closely with the system through technology and information sharing. HSHS is in various degrees of negotiations with about 30 organizations interested in Kiera, Rolston says.

To the limits allowed by law, Hospital Sisters can help these practices purchase electronic medical records software, aid in recruitment and offer billing services. But it's not all about technology.

"Goal No. 1 is to make sure they'll be a good fit with our culture," Rolston explains. Physicians who seek the closest alignment must agree to specific work standards expectations, which range from high patient satisfaction numbers to meeting clinical benchmarks like immunizations.

The response has been overwhelmingly positive, he says, adding, "I do believe that for many physicians, the amount of work required to run the business of health care has gotten to be overwhelming."

Driven by Passion

Hospital Sisters has made integration a high priority, McCutcheon says. "Our passion is to put this integrated care system in place, and we'll be ready for health reform whether it comes from the government or from the payers," McCutcheon says.

Although HSHS continues to recruit physicians to its newly formed medical group, McCutcheon, like Henry Ford's Popovich, says integration will only be fully realized when hospitals align with private doctors.

"We want to work with doctors who don't want to be fully employed and financially incent them for efficiencies," she says. But to get there, "we would like to have some level of capping on pain and suffering in medical malpractice. We know that we need to manage clinical quality risk in a very responsible manner, and we'll do that, but the antikickback statutes and some of the other elements of Stark kind of fly in the face of this."

Physicians, she says, are ready for the challenge. "Doctors are really stepping up and saying health care and reform really need to be led by those of us who are providers," McCutcheon says. "All we're doing is helping to provide the structure and the nursing care and then helping to carry it out."

Randy Edwards is a freelance writer in Columbus, Ohio.

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