ACOs and Community Hubs of Wellness & Health

Hospitals are going to change. What worked in the past will not work in the future. The passage of the federal health care reform law and the inevitable transition from fee for service to global payments is changing the rules of the hospital game. Hospitals will have to make do with less financial support from both government and private payers and at the same time deliver higher quality health care with measurably better outcomes. Hospitals will take care of fewer and fewer patients as care continues to migrate to the outpatient setting, the home, and wherever citizens live carrying their smart phones. The development of Accountable Care Organizations (ACOs) to receive and distribute these global payments will affect hospitals whether they decide to take a leadership role or a wait and see attitude. There will be winners and losers among hospitals; there will be fewer hospitals in America in ten years than there are today in 2011.

Hospitals that survive this transformation of the health care delivery and payment system will become the community hub of wellness and health (CHWH) that citizens turn to in a time of rapid and chaotic change. Becoming a CHWH will require hospitals to expand their services and expertise well beyond the traditional role of an acute care facility. It will also require hospitals to embrace social media and disruptive digital tools that are now available to help care for a defined population living in the community. Hospitals will have to forge a new culture or their ACOs will fail, no matter how sophisticated and expensive their legal structures and physician integration plans become.

Hospital leadership seems ill prepared for this transformation in mission. Robert Naldi, the CFO of Maimonides Hospital in Borough Park, Brooklyn, is not alone when he says, “I don’t spend a lot of time thinking about global issues. When I hear Medicare is being cut six billion dollars over the next ten years, Medicaid cut four billion dollars the next, that ten billion dollars doesn’t change what I do on a Thursday morning…. I don’t spend any energy forecasting the next three or four years, because I don’t think anyone can do that. We’re lucky if we forecast the next six months, things change so rapidly. I just don’t waste time on it.” (http://ow.ly/3Dlxp)

At a time when the most sweeping federal health care legislation since the 1965 Medicare law has been passed, someone in hospital leadership or the hospital board should be spending “energy forecasting the next three or four years.”

In the present payment system, hospitals are profitable when they are filled to capacity doing surgery, generating laboratory results, and producing imaging studies. Hospital administration and specialists have the most prestige and power, and the culture of the system reflects this reality. In a global payment system, the ACO caring for a defined population will do well when patients are successfully treated at home and managed so that hospitalizations are avoided. Primary care physicians will be instrumental in this new approach to care that emphasizes prevention and only essential testing, imaging, and referrals to specialists; the old specialist centered culture will be challenged by this new reality.

Some hospital leaders are taking a wait and see attitude because of the federal court challenges to the individual insurance mandate and the November 2010 election results of a Republican dominated House of Representatives that wants to repeal the federal health care reform law. National Business Group on Health President Helen Darling, a former Republican Senate staffer, says about those who call for repeal: “If they really understood it, they wouldn’t. I don’t think we’ll get a better solution in the U.S. in our lifetime. If it gets repealed or gutted, we’ll have to start over and we’ll be worse off.” (http://ow.ly/3D7Ih)

The other approach is to be proactive and plan how the hospital will take care of a defined population in an ACO. According to Mary Ella Payne, vice president of System Legislative Leadership for Ascension Health, their physicians and nurse leaders met in June 2010 and agreed that the status quo, fee-for-service system is unsustainable. Even in the absence of a health reform bill pushing the idea, ACOs make sense to Ascension Health. “Regardless of what happens with the big picture, we feel like we need to move ahead with reforming our delivery system. We felt we needed to do this because it’s the right way to manage care for our patients.” (http://bit.ly/glgGzA)

For those taking the proactive approach, developing the hospital as the center of a trusted CHWH will be imperative. Hospitals have not been immune to the pattern of decline of trust that has affected many modern American institutions such as the Catholic Church, Wall Street, Congress, and large corporations. Forty two percent of the public report experiencing a medical error involving themselves, a relative, or a friend; 68 percent believe medical quality is a serious problem. There is also a relationship between trust and getting patients to adhere to medical advice such as stopping smoking or losing weight that will become more important under an ACO arrangement. Twenty four percent of patients in the bottom 5 percent of the trust scale successfully changed such behaviors, while 33% in the top 5 percent of the trust scale were able to do so. (http://ow.ly/3Dm6n)

Trust will be needed in order to establish a successful CHWH, and a successful hub will also increase trust in the hospital. David A. Shore lists why trust is so important for a hospital: it allows the organization to be an employer of choice; it allows easier access to capital; it affects regulators; it allows people to work together effectively; it reduces transaction costs; it allows rapid cycle improvement work to be successful at elevating quality; and it allows the hospital to take on challenging projects that are new to the hospital’s mission. (http://ow.ly/3DqgA)

The CHWH would support the Healthy People 2020 program, which provides science based 10-year national objectives for improving the health of Americans. (http://www.healthypeople.gov/2020/about/default.aspx) Hospitals that expand their mission to include the new objectives in Healthy People 2020 such as social determinants of health and health related quality of life and well being will become more trusted in their community and more successful in functioning as an ACO. I have not identified hospitals that are mature in developing a CHWH, but there are examples of programs that fit nicely into this concept.

The Kaiser program that brings farmer’s markets into 30 hospital facilities in four states is an example of a CHWH program. (http://ow.ly/3Dodm) Dr. Preston Maring introduced the Friday Fresh Farmer’s Market at Kaiser Permanente Oakland Medical Center in May 2003; since then it has grown to include a system that supplies locally grown fruits and vegetables for 23 Kaiser hospital kitchens as well as the weekly farmer’s markets. Maring also helped establish a seasonal market at GM-Toyota’s New United Motor Manufacturing Inc. plant in Fremont, where 5,000 people work. In Los Angeles, Kaiser worked with Sustainable Economic Enterprises of Los Angeles, to open the Watts Healthy Farmers’ Market. That market also provides health screenings, nutrition education and other activities. Dr. Maring says, “Markets change the community. They provide good food, fun, a meeting place.” (http://ow.ly/3D) Such programs also create new trusting relationships between the hospital, farmers, food distributors, and other employers that can only increase the standing of the hospital in the community.

In the United Kingdom, the new Mansfield Community Hospital in Nottinghamshire is being designed so that there is easy access for both pedestrians and vehicles. The architects envision a hospital that is seamlessly integrated into the community and where citizens will congregate in the café located in the main entrance. (http://ow.ly/3CH7l)

The CHWH could also become the trusted repository for advice about how to utilize smart phone digital technology. Susannah Fox of the Pew believes digital devices and mobile wireless service will transform healthcare by making it portable, personalized, and participatory. She describes a Stanford Project Health Design study that helped chronically ill teens transition to adulthood by monitoring the teens’ moods by their iPod songs and the words they used in text messages. Because these patients were digital natives they agreed to a level of surveillance that would probably disturb most traditional and older patients.

The Community Hub might have advisors who could explain the smart phone applications that harness the device’s computing power, cameras, audio, video, motion sensors, and GPS. These functions are being used in new ways to manage health and wellness. For example, there are fitness and weight control apps such as Tap & Track, iTreadmill, and Calorie Counter by Fatsecret that can keep track of exercise program progress and even replace personal trainers and pedometers. Diabetics are finding apps such as Glucose Buddy and Handylogs Sugar useful, and hypertensives are buying apps such as HeartWise and My Blood Pressure and Heart Rate. There are even applications for sleep hygiene and stress reduction. Many in the community will find these technologies difficult to understand and use without a trusted community resource to guide them.

These are only examples of services that a CHWH might offer, and obviously different communities will require different services to support the health and well being of the citizens who live there. Julie Salamon’s book Hospital: Man, Woman, Birth, Death, Infinity, Plus Red Tape, Bad Behavior, Money, God, and Diversity on Steroids provides a fascinating case history of how Maimonides Hospital in Borough Park, Brooklyn tries to engage a community that is changing from exclusively Jewish to include Chinese and Pakistanis. The story of how Douglas Jablon, vice president, patient relations/special assistant to the president, connects with these diverse communities underscores the difficulty and necessity of using personal contacts and street smarts to deliver social services in a way acceptable to Muslims, Jews, and Chinese. His thirty patient representatives came from Haiti, Ukraine, Greece, Germany, Pakistan, Nigeria, and Borough Park. “Some were Ph.D.’s; others had only high-school diplomas. They were notary publics, so they could act as official witnesses to Do Not Resuscitate orders and do favors for doctors who needed something notarized.” The Maimonides ER dealings with the Hatzolah (emergency medical service run by Orthodox Jews) and Miriam Lubling (founder of Rivkah Laufer Guardians of the Sick, a major source of patient referrals) illustrate just how complicated and difficult engaging a community can be. As the COO at Maimonides observed, “You have to deal with things here you don’t have to deal with in Manhattan.” (http://ow.ly/3Dlxp)

Hospitals are going to have to decrease per-capita cost of the care they deliver and increase the quality. The shift from fee for service to global payments directed to an ACO will require a major shift in hospital culture and mission. Those hospitals that develop CHWH to provide new services in new ways will better engage their community and become so valuable that they will survive. Those hospitals that fail to change will disappear.

Kent Bottles, MD, is past-Vice President and Chief Medical Officer of Iowa Health System (a $2 billion
health care organization with 23 hospitals). He was responsible for the day-to-day operations of a large education and research organization in Michigan prior to his work with in Iowa with IHS. Kent posts frequently at his new blog, Kent Bottles Private Views.

18 replies »

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  7. “Community Hubs of Wellness and Health” do not exist currently because…,well nobody would buy that. Considering how aggressive marketeers are with everything else, if there really was opportunity here it would exist. Notice that the idea is presented that such organizations (read experiments…) will be created once the money is in hand from some external entity. This construct is contrary to a free market economy which dictates that capital finds solutions for an unmet need in the market place.

  8. Mr. McLaughlin, Thank you for the recommendation on sec. 4201. I am interested in this, and would like to know how to find out about specific funding opportunities under this subtitle. Any ideas?

  9. Ken, when we write “community”, what is it that we really mean?
    Are you seriously envisioning folks in Manhattan hanging out at the Hospital Cafe on a Friday night? Or going to the Hospital to buy radicchio? Or stopping by the Hospital to download an app?
    My suggestion to hospitals that are not located in “communities” and thus have more cash than they can count, would be to quit building on the main campus and instead go ahead and purchase prime property next to golf courses and fancy malls and build equally fancy “Life Style Centers” where they can do everything you describe, with one caveat. Keep the Hospital affiliation at arm’s length.
    The whole point of staying healthy is to put as much distance between you and Hospitals with their associated pain, suffering, infections and visions of death.

  10. Hospitals would be wise review The ACA in §4201 which has a new program of community transformation grants. The purpose of these grants is to:
    • create healthier school environments, including increasing healthy food options, physical activity opportunities, promotion of healthy lifestyle, emotional wellness, and prevention curricula, and activities to prevent chronic diseases;
    • create the infrastructure to support active living and access to nutritious foods in a safe environment
    • develop and promote programs targeting a variety of age levels to increase access to nutrition, physical activity and smoking cessation, improved social and emotional wellness, enhance safety in a community
    • assess and implement worksite wellness programming and incentives;
    • work to highlight healthy options at restaurants and other food venues;
    • prioritize strategies to reduce racial and ethnic disparities, including social, economic, and geographic determinants of health; and
    • address special populations needs, including all age groups and individuals with disabilities, and individuals in urban, rural, and frontier areas.
    Pilot programs similar to the community transformation grants have been underway for a number of years and are beginning to show significant results.

  11. Bravo, great article. As a primary care physician, I would add my strong opinion that the only way even such a robust transformation of the hospital business / clinical models in particular, and the healthcare system at large more globally, will achieve these great and overdue intentions is for an infusion of practicing-physician leadership at all levels. Otherwise, even the noblest of intentions risk failing the critical reality test of what actual patient care really is. That said, I agree with the main points of this very good post.

  12. I am sure this next round of capitation will be just as successful and popular as the first time we tried it.

  13. In researching an article I am writing on how smartphones are already transforming the healthcare system, I came across another item that supports the concept of the progressive hospital becoming a Community Hub of Wellness & Health (CHWH) as part of their Accountable Care Organization (ACO) implementation strategy. In a Pricewaterhousecoopers Health Research Institute white paper titled Healthcare Unwired (http://ow.ly/3GIir) on page 3, survey results are reported that show “consumers said hospitals are the preferred place to buy mobile health products and doctors are overwhelming the most trusted in terms of getting health information.” This finding would seem to support my idea of having the CHWH be the trusted place where community members would go to select smartphone apps and to learn how to utilize them to lose weight, manage chronic disease, deal with stress, and learn about sleep hygiene.

  14. Utopia! The folks who envision this are smoking weed. The hospitals are on the top of the most greedy scale for non profits and for profits. The weakest link here is that the doctors will not work for the scraps that the corner suite folk do not keep for themselves. Moreso, the backbone of these experimental global HMOs, HIT, is dangerously flawed.