Healthcare Futurist Joe Flower: 5 Best Practices to Prepare Hospitals for Accountable Care

The government's encouragement of coordinated care is leading many hospitals to consider developing or joining accountable care organizations, and healthcare futurist Joe Flower, who works with clients ranging from World Health Organization to Global Business Network, says the move is good business practice. He says becoming an ACO can improve the hospital's bottom line by producing more efficient and less expensive healthcare.

"There is a lot of room in healthcare to achieve better quality at lower cost," says Mr. Flower. "Hospitals need to think of themselves as a medical home in partnership with the physician community. It's a very different way of looking at healthcare and I think everyone is struggling with it."

Here are five best practices Mr. Flower believes hospitals and health networks should implement in order to prepare themselves for this future.

1. Digitize and automate. Hospitals should implement CPOE, EMRs or EHRs, and then fully digitize and automate " [everything] from images to security to labs to pharmacy to physical inventory." These systems also allow the hospitals to mine the data for health patterns, such as chronic disorders or illnesses, so the patients receive the appropriate treatment regarding their condition. Digitized and automated systems also allow the hospital to mine the data for quality and efficiency to drive their own production system. "Healthcare is a production system," says Mr. Flower. Failing to optimize the production system for full efficiency and effectiveness leads to poor patient experiences and treatment outcomes, as well as a troubled bottom line.

2. Integrate with the physicians. Hospitals have several options for collaborating with physicians, such as bringing the physicians on staff, joint venturing with multispecialty groups or specialty hospitals and forming primary healthcare organizations. The right model depends on the location situation: The physicians, the patient population and other assets the hospital can deploy. Hospital administrators can compare their primary care operations and partnerships to the standards for the "Medical Home" put out by the National Committee for Quality Assurance. Either way, hospitals should engage the physicians within the hospital leadership decision-making processes regarding the goals and incentives necessary for improving quality or becoming an ACO.

"All of these relationships have to be specifically managed through the limbs of a production system for the greatest quality and efficiency," says Mr. Flower. "If you look at places where implementing goals and incentives for physicians has failed, they are places where the administrators make up an incentive program and tell the doctors, 'This is what we're going to do.'"

3. Emphasize primary care. When designing the ACO model, hospitals should begin with the primary care physicians and work upward. Patients with acute problems often visit clinics, ERs or urgent care centers, which is more costly and less time-efficient than utilizing a primary care physician. "There is increasing data that our primary care sector is suffering because it is difficult for patients to find primary care physicians and difficult for primary care physicians to make a living," says Mr. Flower. "Hospitals need to either build their own primary care networks or strongly partner with independent physicians in order to create a seamless patient experience and to help the physicians maximize their efficiency and effectiveness."

Mr. Flower says many primary care physicians spend their time on un-billable tasks, such as chasing down claims and coding, which does not contribute to a patient's care. Building staff or appropriate technologies to streamline these tasks, in effect, creates more primary care physicians by allowing them to spend more of their time on patient care.

4. Share risks. Hospitals need to share the risks involved with healthcare payments between themselves, the insurance company, patients and physicians. Hospitals can share the risk by implementing a capitated payment system (healthcare providers paid for each assigned patient, such as the HMO system) or minicaps (a subscription system).

5. Utilize management tools. In order to increase organization and efficiency at the hospital, administrators should employ management tools such as the Toyota Production System. For instance, Seattle Children's Hospital, which implemented a version of the Toyota Production System, was able to increase the number of patients it cared for by 50 percent in five years without adding any new beds or staff, says Mr. Flower.

There are a wide variety of "new management" tools, from Six-Sigma quality techniques to "Theory of Constraints" analysis, to benchmarking, to the Toyota Production System, each appropriate for particular parts of managing healthcare. You can think of them as a toolbox, Flower says.

"Hospitals have heard a lot about these management tools. Some hospitals are applying them strongly, many are not," says Mr. Flower. "I think in a world where hospitals are shifting to ACOs, these tools are very valuable."

Learn more about Joe Flower.

Read other coverage on ACOs:

- 6 Considerations for Providers in an Accountable Care Environment

- To Run ACOs, Hospitals Need to Change Their Business Model


- What Makes of Breaks A Successful ACO: Q&A With Dartmouth Brookings Pilot Participant Monarch Healthcare's CCO Ray Chicoine



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