leadership five hospitals better as leading the way....

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www.healthleadersmedia.com30 HealthLeaders n September 2014

Kelby Krabbenhoft, president and CEO of Sanford Health—an integrat-ed health system headquartered in the Dakotas with 39 medical centers and 26,000 employees in nine states—says his organization is built on earned referrals.

“That means, for example, if we have a panel of neurologists and one of our physicians refers a patient outside our sponsored group, we would go to that

Better as Partners Employing physicians is rampant, but it’s far from sufficient for alignment.

BY PHILIP BETBEZE

Making physicians employees doesn’t necessarily mean they’ll be team play-ers. An overused m a x i m a m o n g

healthcare executives is that when it comes to physicians, employment does not equal alignment. That’s one way of saying that just because you’re paying their salary doesn’t mean they’ll always work for the best interests of the orga-nization—or, critically, that the admin-istration of said organization will work for theirs.

That’s what alignment achieves, but gaining that trust lies in a murky con-struct called culture—offering a doctor a job doesn’t mean he or she is aligned.

Many hospitals have been burned by employing physicians as a defensive measure, and hospitals often misman-age alignment. Still, not only are hospi-tals looking to employ physicians but a recent Merritt-Hawkins study also shows a decrease in recruiting assign-ments for independent practice settings, such as partnerships, concierge prac-tices, or solo practice settings. But both sides have to work effectively together to make that business model work.

So the question isn’t whether you should employ your physicians—you will. The more important question is how you build them into a team where their personal best interests conform as closely as possible to the best interests of the organization. It’s more complicated than it sounds.

‘Earning’ referralsFor organizations that incorporate anything other than primary care into their business model, referrals are their economic lifeblood. Referrals are so important that they’re governed by a patchwork of laws and regulations, and healthcare leaders are well familiar with them. But if referrals can’t be compelled, they can be earned, say many top leaders.

LEADERSHIP

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Rounds

>ACCOUNTABILITY. Kelby Krabbenhoft

is president and CEO of Sanford Health,

with headquarters in the Dakotas and

operations in nine states. He says align-

ment requires accountability on the part

of the organization and the physician. He

says he will be a champion for physicians,

but will confront them when things are

not being done right.

Each one of these organizations has created a culture of uncompromising vigilance and safety to

provide a safe and secure environment for their patients and staff. Out of the over 6,500 facilities

reviewed, these five facilities rose above the rest, demonstrating an unwavering commitment to

safety and security. As the providers of the Reptrax™ vendor privileging system, IntelliCentrics

is proud to play a role in safeguarding these facilities. As such, we’ll be providing each winning

facility with a congratulatory financial grant.

To learn how your hospital can create a culture of vigilance, and how you can be considered for

next year’s 5 Rings Award, visit www.IntelliCentrics.com/5-rings

Broward Health Medical CenterFort Lauderdale, Florida

John Peter Smith HospitalFort Worth, Texas

Mercy Hospital & Medical CenterChicago, I l l inois

Pali Momi Medical CenterAiea, Hawaii

St. Joseph Mercy HospitalAnn Arbor, Michigan

Five hospitals leading the way.Meet our 5 Rings Award 2014 winners.

™

14-DEV-0005_IntelliCentrics_HealthLeaders_5Rings_8.375x10.875_080814.indd 1 8/8/14 10:05 AM0914-Leadership.04.FINAL.indd 30 8/20/14 10:40 AM

L E A D E R S H I P


things like returning a primary care phy-sician’s phone call, or making it, through technology in many cases, easier for them to refer their patient inside the health system than it is to go outside. Executives can end up investing millions in salaries through employed physician networks

while at the same time failing to under-stand how to achieve alignment.

“Alignment makes sense for a hos-pital because it begins to give you tight relationships with primary care physi-cians,” says Wasserman. “We’re moving toward a world where primary care becomes more important and we’re focusing more on population health.”

Aligning with primary care assures a cadre of patients not only on the pri-mary care side but also with ancillary and specialty physicians.

Why this push toward alignment? One of the factors that holds the most promise for improving quality and reducing cost over time is to begin to get physicians working very closely with their health systems and hospitals to reduce variation and overutilization, among other benefits.

physician to find out why. We want to know why and what we are doing wrong,” he says. “We hold that in confi-dence, because obviously it’s in our best interests. If we’ve got poor-performing neurosurgeons, we go get the better ones they want.”

Jeff Wasserman, who consults on physician alignment, says that’s exact-ly the right approach. He is manag-ing director for Huron Healthcare—a Chicago-based global consultancy with 2013 revenues of $720 million.

“If you’ve invested a significant amount of money in bringing physi-cians on in employment, you do want to eventually get alignment. But you can’t do what many systems have done: not give them the resources they need and be surprised when they’re not aligned.”

Wasserman says proof of the diffi-culty of alignment exists for a significant number of his clients who have gotten into physician employment without fully understanding what’s necessary to make it work, which includes unglamorous ideas like tools that better manage the health experience of patients to simple

“Hospitals don’t manage patients,” Wasserman adds. “The one who’s really managing is the physician. If you’re in closed, tightly owned medical groups, you can bring some strong incentives to keep referrals in-house. But that’s not the best way to manage things. You really want to earn your referrals. Physicians react much better, long-term, as partners rather than treating them as employees.”

Using an ACO as a mechanismSome enterprising health systems are forming partnerships that don’t neces-sarily focus on the employment angle. Some of the most promising relation-ships are contractual partnership deals between hospitals or health systems and independent physician practices. Sometimes local payers are in on the deal to help incentivize cooperation among the groups.

One such deal is the recent account-able care collaboration among Aetna, Tenet’s Baptist Health System, and HealthTexas Medical Group of San Antonio. The deal, which took effect July 1, means Aetna members in four counties can receive coordinated care from five hospitals, 42 primary care offices, and more than 900 physicians, including independent primary care and specialist physicians, who agree to abide by the care protocols established by the partnership.

Multi-response

NOTES: This chart includes data segmentation from the Premium edition of the report. For more from this report, see the Intelligence Report section beginning on page 22.

SOURCE: HealthLeaders Media Intelligence Report, Physician Alignment: New Leadership Models for Integration, September 2014; www.healthleadersmedia.com/intelligence.

ALIGNMENT MOTIVATIONSPlease identify the top three business, staffing, or organizational objectives or motivations behind your physician alignment strategy.

Overall Hospitals Health systems Physician organizations

Improve system margin 63% 59% 71% 56%

Ensure coverage for strategic service lines 50% 51% 57% 35%

Maximize system revenue 50% 56% 38% 54%

Physician retention 43% 42% 48% 35%

Attract physicians to centers of excellence 37% 41% 33% 33%

Consolidate group practices, provide management 23% 16% 23% 38%

Attract physicians to centers of excellence 37% 41% 33% 33%

“We’re moving toward a world where primary care becomes more important and we’re focusing more on population health.”

0914-Leadership.04.FINAL.indd 32 8/20/14 10:40 AM

HealthLeaders n September 2014 33www.healthleadersmedia.com

Critical to that effort are the 30 pri-mary care physicians at HealthTexas’ 15 locations, who already work with a large network of specialists who can demonstrate that they will coordinate with others in the partnership.

“Specialists who participate are not chosen by the health plan—the physi-cians decide how and when to refer in collaboration with our patients,” says Richard Reyna, MD, president and CEO of HealthTexas. “It’s not about discounting or best rates. We care more about their skills and complication rates, their patient satisfaction, and their willingness to coordinate care with the primary care physician.”

Despite the fact that Baptist employs physicians directly through its multispecialty BHS Physicians Net-work (with more than 40 primary care and specialty clinic locations, and more than 112 physicians and midlevel pro-viders), Baptist President and CEO Graham Reeve sees deals like this as critical to the organization’s survival in a fee-for-value, as opposed to fee-for-service, world.

“We still see a lot of fee-for-service business, but we have to build expertise in the fee-for-value area,” he says.

Baptist Health System—which includes five acute care hospitals that offer 1,753 licensed beds—has become more comfortable in that environment

through its participation in bundled payment through CMS’ Acute Care Episode demonstration program, and has learned how to do episodic disease management there, Reeve notes. Bring-ing more physicians into its orbit of cooperation is critical.

“The requirement for us to be aligned with physicians is paramount,” Reeve says. “If not, we can’t survive in a fee-for-value model.”

The agreement is the result of years of discussions with HealthTexas, among others, for clinical and finan-cial partnerships that would improve quality and reduce overutilization, in addition to achieving other goals.

“About a year ago, we saw how the market was further evolving and we had discussions with Aetna as a willing payer on these programs. It seemed like the time was right,” Reeve says. “This is about creating high performance in a defined network where our employed primary care docs work with HealthTexas.”

Reyna says the deal means coopera-tion at a number of levels among all physicians caring for the same patient. Part of that cooperation is expected to be engineered through IT—the ability to access real-time information from the hospital system as easily as it is, for example, for a physician to order that test again. There also is an expectation of an efficient interchange of information

Multi-response

SOURCE: HealthLeaders Media Intelligence Report, Physician Alignment: New Leadership Models for Integration, September 2014; www.healthleadersmedia.com/intelligence.

ALIGNMENT MECHANISMSWhich of the following physician alignment mechanisms is your organization undertaking now?

Physician employment

Clinical integration

Patient-centered medical home

Risk-sharing agreements

Shared-savings contract(s)

Bundled payments

Comanagement agreement

Provider-owned health plan

77%

67%

54%

37%

31%

29%

25%

14%


HealthLeaders n September 2014 35www.healthleadersmedia.com

between physicians for patients who are receiving care at both organizations.

“Usually, there’s not enough time to go over all the details person to person, so we need to make them available from an IT perspective,” says Reyna. “We also have a quality guidelines committee focusing on evidence-based medicine, and we expect our referrals to follow committee recommendations. Our phy-sicians’ compensation is centered on quality parameters and metrics.”

That means any organization those doctors choose to work with must work toward the same goals, or they simply won’t get the referral, he adds.

“They have to be able to commu-nicate with other team members,” says Reyna. “We’re talking about all the other things we’ve brought to bear, such as case workers, educators, care-giver courses, people who go to patients’ homes who are sick and can’t make it to doctor’s office. That whole thing doesn’t fit in a fee-for-service world.”

In this case, Aetna serves as the bridge. The company is taking advan-tage of the opportunity that the com-mercial ACO can bring not only to the distribution side but also the clinical side, says Michael Nelson, the insurer’s South Texas market president. As this is Aetna’s first such partnership in San Antonio, Nelson says the insurer was conscientious about the partners it chose for this effort.

“The collaboration is just begin-ning, but we’ve trained our own work-force to understand the value the ACO brings and our partners joined us in broker training because this is not just a price proposition. It’s a long-term value proposition,” he says. “It’s dif-ficult to give a specific definition of success at this point, but we believe that this ACO will be attractive to new and existing customers.”

Employment and the problem of leakageOther organizations may not have to execute elaborate partnerships in order to better coordinate care and ensure referrals do not “leak” out of the

ONLY Devices with AdaptivCRT Improve Outcomes as compared to echo-optimized CRT.1-6

AdaptivCRT® Algorithm Reduced Risk of Heart Failure Hospitalization or Death1

for Patients with Normal AV Conduction

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HR = 0.52, 95% CI: 0.27-0.98,p = 0.044

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AdaptivCRT

30%

25%

20%

15%

10%

5%

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91 87 79 72 37 150 142 133 129 78

Time to Heart Failure Hospitalization or All-Cause Death

0 3 6 9 12

Echo-optimized CRT AdaptivCRT

Numberremaining

AdaptivCRT Reduced 30-Day HF Hospital Readmissions by 47%2*

Evidence Presented at Heart Rhythm Society 2014

Ask your electrophysiologist about cardiac resynchronization devices with AdaptivCRT

* as compared to echo-optimized CRT.

References1 Birnie D, Lemke B, Aonuma K, et al. Clinical outcomes with synchronized left ventricular pacing: analysis

of the adaptive CRT trial. Heart Rhythm. September 2013;10(9):1368-1374.2 Starling RC, Krum H, Bril S, et al. Impact of Novel Adaptive Optimization Algorithms on 30-Day Readmissions.

Evidence from the Adaptive CRT Trial. Heart Rhythm. 2014;11(5)(Suppl.):S155.3 Krum H, Lemke B, Birnie D, et al. A novel algorithm for individualized cardiac resynchronization therapy:

rationale and design of the adaptive cardiac resynchronization therapy trial. Am Heart J. May 2012;163(5): 747-752.e1.

4 Martin D, Lemke B, Aonuma K, et al. Clinical Outcomes with Adaptive Cardiac Resynchronization Therapy: Long-term Outcomes of the Adaptive CRT Trial. HFSA Late Breakers. September 23, 2013.

5 Martin DO, Lemke B, Birnie D, et al. Investigation of a novel algorithm for synchronized left ventricular pacing and ambulatory optimization of cardiac resynchronization therapy: results of the adaptive CRT trial. Heart Rhythm. November 2012;9(11):1807-1814.

6 Singh JP, Abraham WT, Chung ES, et al. Clinical response with adaptive CRT algorithm compared with CRT with echocardiography-optimized atrioventricular delay: a retrospective analysis of multicentre trials. Europace. November 2013;15(11):1622-1628.

Brief Statement: CRT IPGs and CRT ICDs Indications: Cardiac Resynchronization Therapy (CRT) IPGs are indicated for NYHA Functional Class III and IV patients who remain symptomatic despite stable, optimal heart failure medical therapy and have an LVEF ≤ 35% and a prolonged QRS duration and for NYHA Functional Class I, II, or III patients who have an LVEF ≤ 50%, are on stable, optimal heart failure medical therapy if indicated and have atrioventricular block (AV block) who are expected to require a high percentage of ventricular pacing that cannot be managed with algorithms to minimize right ventricular pacing. Optimization of heart failure medical therapy that is limited due to AV block or the urgent need for pacing should be done post-implant. Rate adaptive pacing is provided for those patients developing a bradycardia indication who might benefit from increased pacing rates concurrent with increases in activity. Dual chamber and atrial tracking modes are indicated for patients who may benefit from maintenance of AV synchrony. Antitachycardia pacing (ATP) is indicated for termination of atrial tachyarrhythmias in patients with one or more of the above pacing indications. CRT ICDs are indicated for ventricular antitachycardia pacing and ventricular defibrillation for automated treatment of life-threatening ventricular arrhythmias and for providing cardiac resynchronization therapy in heart failure patients who remain symptomatic despite optimal medical therapy if indicated, and meet any of the following classifications: New York Heart Association (NYHA) Functional Class III or IV and who have a left ventricular ejection fraction ≤ 35% and a prolonged QRS duration. Left bundle branch block (LBBB) with a QRS duration ≤ 130 ms, left ventricular ejection fraction ≤ 30%, and NYHA Functional Class II. NYHA Functional Class I, II, or III and who have left ventricular ejection fraction ≤ 50% and atrioventricular block (AV block) who are expected to require a high percentage of ventricular pacing that cannot be managed with algorithms to minimize right ventricular pacing. Optimization of heart failure medical therapy that is limited due to AV block or the urgent need for pacing should be done post-implant. Some CRT ICDs are also indicated for use in patients with atrial tachyarrhythmias, or those patients who are at significant risk for developing atrial tachyarrhythmias. The RV Lead Integrity Alert (LIA) feature is intended primarily for patients who have a Medtronic ICD or CRT-D device and a Sprint Fidelis lead (Models 6949, 6948, 6931, and 6930) based on performance data. The RV LIA feature may not perform as well with a St. Jude Medical Riata™/Durata® lead or a Boston Scientific Endotak lead as it does when used with a Medtronic Sprint Fidelis lead. This is because different lead designs may have different failure signatures and conditions that may or may not be detected early by the RV LIA feature. Contraindications: CRT IPGs are contraindicated for concomitant implant with another bradycardia device and concomitant implant with an implantable cardioverter defibrillator. There are no known contraindications for the use of pacing as a therapeutic modality to control heart rate. The patient’s age and medical condition, however, may dictate the particular pacing system, mode of operation, and implant procedure used by the physician. Rate-responsive modes may be contraindicated in those patients who cannot tolerate pacing rates above the programmed Lower Rate. Dual chamber sequential pacing is contraindicated in patients with chronic or persistent supraventricular tachycardias, including atrial fibrillation or flutter. Asynchronous pacing is contraindicated in the presence (or likelihood) of competition between paced and intrinsic rhythms. Single chamber atrial pacing is contraindicated in patients with an AV conduction disturbance. Antitachycardia pacing (ATP) therapy is contraindicated in patients with an accessory antegrade pathway. CRT ICDs are contraindicated in patients experiencing tachyarrhythmias with transient or reversible causes including, but not limited to, the following: acute myocardial infarction, drug intoxication, drowning, electric shock, electrolyte imbalance, hypoxia, or sepsis; patients who have a unipolar pacemaker implanted, patients with incessant ventricular tachycardia (VT) or ventricular fibrillation (VF), and patients whose primary disorder is chronic atrial tachyarrhythmia with no concomitant VT or VF. Warnings and Precautions: Changes in a patient’s disease and/or medications may alter the efficacy of the device’s programmed parameters. Patients should avoid sources of magnetic and electromagnetic radiation to avoid possible underdetection, inappropriate sensing and/or therapy delivery, tissue damage, induction of an arrhythmia, device electrical reset, or device damage. Do not place transthoracic defibrillation paddles directly over the device. Additionally, for CRT ICDs and CRT IPGs, certain programming and device operations may not provide cardiac resynchronization. Also for CRT IPGs, Elective Replacement Indicator (ERI) results in the device switching to VVI pacing at 65 ppm. In this mode, patients may experience loss of cardiac resynchronization therapy and/or loss of AV synchrony. For this reason, the device should be replaced prior to ERI being set. Use of the device should not change the application of established anticoagulation protocols. Potential Complications: Potential complications include, but are not limited to, rejection phenomena, erosion through the skin, muscle or nerve stimulation, oversensing, failure to detect and/or terminate arrhythmia episodes, and surgical complications such as hematoma, infection, inflammation, and thrombosis. An additional complication for CRT ICDs is the acceleration of ventricular tachycardia.See the device manual for detailed information regarding the implant procedure, indications, contraindications, warnings, precautions, and potential complications/adverse events. For further information, please call Medtronic at 1 (800) 328-2518 and/or consult Medtronic’s website at www.medtronic.com.Caution: Federal law (USA) restricts these devices to sale by or on the order of a physician.

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World HeadquartersMedtronic, Inc. 710 Medtronic Parkway Minneapolis, MN 55432-5604 Tel: (763) 514-4000 Fax: (763) 514-4879

Medtronic USA, Inc. Toll-free: 1 (800) 328-2518(24-hour technical support for physicians and medical professionals)


L E A D E R S H I P


Wasserman. “The systems that are making the biggest mistakes are the ones who go to a hard employment model and don’t take time to under-stand what makes physicians tick and how they work best.”

But the fact remains that organiza-tions have to treat both groups differ-ently, mainly because of regulatory and legal concerns.

“I hesitate to use the word insur-mountable, but it’s virtually insurmount-able,” says Krabbenhoft, adding that in

trying to treat both groups equally, you could find yourself unwittingly doing things that are anticompetitive.

“When you’re not all playing by the same rules, almost by nature you’re going to have winners and losers, and you can easily create a noncompetitive environment,” he says. “It’s for a lot of reasons that having a staff that’s similar to the traditional models of the Mayos and Cleveland Clinics is preferable.”

Make it personalWhile such a model may be preferable, that is not always possible. Regardless of employment status, it makes sense to focus integration activities at the primary care level because it’s the root of referrals and management of pop-ulation health—one reason so many

system. They may find that employ-ment can help with that goal. But Krabbenhoft of Sanford Health says it’s only a means to an end.

Employment “provided assurances, support, and confidence to physicians that the organization will back them, and it supplied the organization with the assurance that we could confidently know those physicians would be there through good times and bad,” he says.

Employment just happens to be the construct of that relationship.

“There’s nothing really magical about employment; it just happens to be the necessary mechanical thing in the relationship.”

Sanford’s revenue from employed physicians represents in excess of 90% of the system’s total annual revenues. That figure represents alignment for Krabbenhoft, as he maintains align-ment can’t be achieved with less than 50% of a system’s revenue coming from employed physicians. Even so, leakage can still be a problem even

if your organization features mostly employed physicians and their rev-enue share is high. It’s an example of how physicians can be employed but not aligned.

Organizations need to be transpar-ent on the advantages of employment, and should not offer it as an option only for a few physicians, says Huron’s Wasserman. Doing so can only fuel perceptions of economic disadvantage. Employed physicians are sometimes getting less in compensation than their counterparts in the independent com-munity, but there’s a perception that there’s more marketing support for employed physicians.

“You have to be very careful and not add to the conflict by being perceived as favoring employed physicians,” says

organizations are buying up primary care clinics at a feverish pace.

But it doesn’t stop there, of course. Very soon, Krabbenhoft says, “you’ve got to integrate every element of physi-cian practice that is present or at least profound in your organization.”

He says the best tool he’s found for integration is one that carries the big-gest personal risk for executives—to make it personal.

“They know me personally,” he says of Sanford’s physicians. “We recruit 110–140 physicians a year, and we’ll have more than 1,500 soon, so to know them in the same way I did when we were a 300-plus staff is a different prop-osition, but we’ve set up structures so every doctor knows that at the end of the day there is one person. If they have a problem, they can contact me.”

Making it personal, he says, means accountability on both sides.

“I oftentimes find myself in front of hundreds of physicians who gath-er for different purposes—quality or compensation initiatives, or what-ever. I never miss the opportunity to tell them they’ll never find a bigger champion than me,” he says. “But that provides me with certain rights that include allowing me to confront them and challenge them when things aren’t being done right. There’s no pizzazz in common sense, but there’s nothing that can replace it.”

Philip Betbeze is senior leadership editor for HealthLeaders Media. He may be contacted at [email protected] HLR0914-4

H

NOTES: Multi-response. This chart includes data segmentation from the Premium edition of the report.

SOURCE: HealthLeaders Media Industry Survey 2014: Forging Healthcare’s New Financial Foundation, January 2014; http://hlm.tc/1diJynt.

ALIGNMENT IMPROVEMENT From among 10 choices, 44% of healthcare leaders cite physician-hospital alignment as a top-three area in which their organization must improve to reach financial targets within three years. That varies by setting.

Sample size Overall Hospitals Health systems Physician organizations

Physician-hospital alignment 44% 54% 53% 33%

“There’s nothing really magical about employment; it just happens to be the necessary mechanical thing in the relationship.”

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