The Implementation of New Models of Care: Q&A With Iowa Health System CEO Bill Leaver

As hospitals and health systems prepare for changes brought on by healthcare reform, these providers are examining how they can approach and build new models of care, whether they involve ACOs, bundled payments or medical homes. Here, Bill Leaver, president and CEO of Iowa Health System, answers questions about the future of fee-for-service, the move toward "coordinated care" models and the importance of EMR and physician integration to future delivery models.

Q: Medicare will introduce a pilot program for ACOs in 2012, and in the future, hospitals will likely be compensated based on a pay-for-performance model rather than a fee-for-service model. What is the future of fee-for-service payment models?

Bill Leaver: We fundamentally believe fee-for-service, as we know it today, will be dead. The only question is when the obituary will be written. It's not a sustainable model and we have believed that for quite some time. The focus in reform is about transitioning away from fee-for-service to a value-based system, but the question is how do you quantify and define value, and what's the appropriate payment model for that?

You see the reform legislation [proposing] a variety of different models. ACOs are the most prominent and are getting a lot of media coverage, as well as bundled payments where you're paying for an episode of treatment. All of that is now being defined and we are supportive of moving away from fee-for-service, which is very fragmented and rewards quantity or volume over quality.

All of that is now being defined, and there are certainly efforts around writing rules on how this will be implemented. We are supportive of moving away from fee-for-service, which is very fragmented, episodic and rewards quantity or volume over quality.

Q: How is Iowa Health System moving toward new models of care that reward quality rather than quantity?

BL: We are focused on how we take responsibility for coordinating patient care, particularly for chronically ill patients. Care coordination for the chronically ill will be the focus of most ACOs and bundled payments. Our efforts are in creating the clinical infrastructure and making sure IT systems allow us to do that, as well as aligning our efforts with physicians, whether they're employed or independent.

For some time, we have been creating what we would characterize as an advanced medical care team that would complement the medical home by providing care for the most severe chronically ill patients. Many people with a chronic disease have several chronic diseases. Can the primary care physician have the resources and time to effectively coordinate care for that severely chronically diseased patient? To provide more resources, we are creating a complementary service in this advanced medical team to help the primary physician in that medical home.

Q: You talked about making sure IT systems help providers care for chronically ill patients. Going forward, how can EMR be used effectively to promote the continuum of care?

BL: The question going forward is, "How do we get these disparate clinical systems to talk to one another and how do we create interoperability between them so that information about the patient is in front of the clinician when you need to make a clinical decision?” Under an ACO model or a new delivery model, you need the ability to provide real-time information about the movement of the patient through the system. For example, the primary care physician should be aware of what is happening to the patient and what the patient needs in terms of intervention.

That will be a challenge because currently, our IT systems have a way to go in terms of creating that real-time picture. If we have somebody who is seeing one of our primary care physicians, and the patient hypothetically has a back problem and decides on their own to visit an orthopedic surgeon, our current systems wouldn't necessarily alert the primary care physician that the patient has gone to an orthopedic surgeon. It's not clear whether the orthopedic surgeon would know the patient had seen a primary care physician in another setting. When we talk about coordination of care, that's really going to be about how to keep information within the system so the appropriate clinicians know where the patient is.

Q: Are those changes the responsibility of IT vendors or health systems at this point?

BL: It's a little bit of both. The Obama administration has made a fully functioning EMR a priority as a matter of national policy and we have been working closely with the state and other big health systems around the creation of health information exchange that would allow for the transference of clinical information across systems. It's not vendor dependent, but it is an obligation of the vendor to make sure they're connected to the Health Information Exchange and that interoperability is present. I think most vendors see where the future is going to be, so I think it's a matter of creating the right safeguards on patient confidentiality and privacy and establishing the means for the transition of that information.

Q: Large health systems and academic medical centers seem to have certain financial advantages in implementing the medical home model. Will community hospitals be able to participate as well?

BL: I don't know that we would conclude that the community hospitals wouldn't and couldn't have a role in the medical home. It requires some investment in infrastructure to create a medical home, and we have a good idea of what that investment is. It has to be about the community hospital's willingness to invest, because physicians are not going to have all the resources to make that investment. Some rural hospitals have moved forward in a pretty progressive way with their primary care physicians to create a different model of care.

The community hospital has to recognize that perhaps with the creation of medical homes and different models, they may actually see less business. From a national policy perspective, we're not going to get rewarded for readmissions, and we’re going to see fewer visits to our emergency departments. Community hospitals can make a new model work, but they're going to have to realize the old business model is not going to suffice going forward. They're going to have to get used to seeing patients in different settings and being rewarded differently. But I think community hospitals, given the right leadership, can certainly make that work.

Q: Could you identify mistakes health systems might be making now that will impede their involvement in new care models in the future?

BL: Culture will become very, very important to organizations that want to survive and thrive in the future. Organizations that have the right culture and the right interests will be the ones that are successful. If hospitals are not making investments in critical clinical infrastructure, their ability to avoid readmissions and take advantage of opportunities in the reform law will be lost.

Secondly, some organizations have said they're going to employ all physicians, but if you don't employ the right ones or enough in a sufficient quantity, you can create management headaches or significant losses. You could create a backlash within the medical community that would be hard to overcome. I think it's also critical that large organizations are investing in IT now.

Q: In April, you talked to The Des Moines Register about keeping chronically ill patients out of the hospital by using home health nurses and in-home monitoring units. Where is that project now?

BL: Our project, in terms of integration of home health care and in-home monitoring, continues to progress. We're deploying that in three regions right now and we're still in the beginning stages, but we're seeing some early success in that. The whole focus is on reducing readmissions and emergency visits. We're making good progress in that regard. I think that the development of the medical home, the coordination of care and the integration of home care are all fundamental to being able to reduce the cost of chronic disease and treating chronic disease. We spend 50 percent of our money on treatment of chronic disease, and we need to lower that cost.

In addition, we want to get paid to do that, so we want to demonstrate value by saying, "Here's what we did in terms of reduction of cost" so the government or commercial insurance company pays us for it. That will help us replace some of that revenue. It won't necessarily be a dollar-for-dollar replacement, but we want [improving quality] to be financially manageable and take care of the business.

Q: How is Iowa situated to handle the influx of newly insured patients and the predicted shortage of providers? How will that affect the hospitals in Iowa Health System, particularly those that work with rural Iowa hospitals?

BL: There's certainly a lot of uncertainty and a lot of unknowns, but we need to recognize that in some ways, the system has been treating these uninsured patients already. The question is, have we been treating them in the most appropriate setting? If we can effectively put the now-uninsured, soon-to-be-insured patients into a primary care setting, we should. In Iowa, we have enough primary care physicians if we restructure their office and use more mid-level providers.

Q: What are the biggest opportunities for hospitals right now?

BL: The biggest opportunity is really to transform the delivery system to manage the patient population and create a better experience for both patient and physician. Physicians want a system that's more responsive to their needs, and more rapid in response to patient needs, rather than fragmented and episodic. There's a huge opportunity to try out some different payment models and delivery models. We're not going to create the perfect solution out of the box. We've talked very frankly with our board about the fact that we're not going to know the answers every time. We're going to have to experiment and innovate and be willing to say, "This isn't working the way we thought it would." We need to modify and respond to the situation on the ground.

The freedom to do that is pretty exciting. A better model and coordination of care will lower cost, improve the patient experience and create better quality, and I don't know a better ambition or dream to have than that. I think that's why people get into healthcare in the first place.

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