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Local Hospitals and Doctors Join Forces to Improve Health Care, Restrain Costs

Communties across the country aren’t waiting for Congress to take action to improve health care quality and contain costs. 

In Cedar Rapids, Iowa, the two largest hospitals are sharing patient medical records to reduce the duplication of services. They also run a joint clinic for patients on blood-thinning medications and are talking about building a joint cancer center.

In Everett, Wash., physician practices were combined into four large groups to cut costs and the two major hospitals merged. The resulting hospital, Providence Regional Medical Center, employs health coaches to smooth discharge planning and reduce readmissions.

In La Crosse, Wis., the health systems have convinced 95 percent of seniors to sign advanced directives to improve end-of-life care for patients and to save money.

Leaders from these and seven other communities that feature low-cost, high-quality health care met in Washington yesterday to exchange ideas at an event organized by the Institute for Healthcare Improvement, a nonprofit group based in Cambridge, Mass. 

“The performance of the places in this room is enough to create a tremendous amount of hope,” Don Berwick, CEO of the institute, told the nearly 200 people in attendance. “You’ve created a sense of possibility.”

The institute, working with The Dartmouth Institute, Harvard Medical School, the Brookings Institution and the Fannie Rippel Foundation, invited representatives from 10 high-performing communities to the conference. The communities were chosen by examining per capita Medicare costs and federal hospital performance data and patient satisfaction data.

The communities that were invited weren’t necessarily the Top 10 in the country, but they were among the best in the nation. The institute wanted a geographic distribution.  

In addition to La Crosse, Cedar Rapids and Everett, the other communities included were Asheville, N.C.; Portland, Maine; Sacramento, Calif., Richmond, Va.; Sayre, Pa.; Tallahassee, Fla., and Temple, Texas.

Attending the meeting were local hospitals executives, health plan administrators, doctors, business leaders and politicians. Some of the communities had a long history of lower costs, reflecting the presence of large integrated health systems such as Scott & White Memorial Hospital in Temple, Texas. Others, such as Richmond and Sacramento, have only recently begun working to coordinate care and improve collaboration among providers.

In most of the communities, hospitals work closely with doctors. In addition, most of the health systems use electronic medical records to track patients and improve care, and encourage a culture of restraining spending, involving physicians in changing health care delivery systems and collaborating with competitors to help patients. All the communities were dominated by nonprofit health systems.

In Asheville, the city’s lone health system-formed by a merger of two hospitals earlier this decade -works like a public utility, with its spending tightly managed by state regulators. There is a culture of “clinical conservatism,” said Alan Baumgarten, chief of the medical staff of Asheville’s Mission Memorial Hospital. He said the community “edges out” doctors who don’t practice that way.

Mark McClellan, former head of the federal Centers for Medicare and Medicaid Services and now director of the Engelberg Center for Health Reform at Brookings, said the nation had much to learn from high-performance communities. But he added: “There is no button to push in Washington to bring what you’ve done to the rest of the country.”

While the session didn’t focus on the congressional health proposals, most in attendance stressed the need to change the Medicare payment system from a fee-for-service system, under which providers are paid for individual tests, visits and procedures, to a system under which providers are paid for an entire episode of care or for all the needs of a population over time.

Other common themes that emerged from the communities:

  • Strong leadership, particularly from physicians, is needed to improve and standardize health care.
  • Having a strong base of primary care doctors is important–but coordinating care among all providers is even more important.
  • To improve accountability, health care data are needed to measure the performance of providers and to share with purchasers of care and the public.

Dr. Atul Gawande, a Harvard surgeon and author of a recent article in the New Yorker highlighting the wide variation in spending on health care across the country, said all better-performing communities have a culture of putting the needs of patients ahead of business models. “These are communities we want to protect and spread but they are threatened,” he said.

Some in the audience questioned how well other communities can change.

“You all must live in some kind of utopia land,” said Dr. Nancy Nielsen, a Buffalo internist and immediate past president of the American Medical Association. “I am in awe of what is happening.”

Berwick said the communities’ performance raised the question of whether a congressional health overhaul is even needed. “Your successes in a messy world showed you could do it anyway,” he said.


To get additional views, KHN asked some other attendees two questions: What they would like to change about the health overhaul bills pending in Congress and what they thought about giving the Medicare Payment Advisory Commission the power to set Medicare rates. Here are the responses:

Local Hospitals and Doctors Join Forces to Improve Health Care, Restrain CostsLen Nichols, director of the health policy program, New America Foundation

Nichols said he’d like to accelerate the effective date of the health-overhaul legislation. “I think that waiting until 2013 is a really long time for people who are desperate to get coverage,” he said.

He also said he would sharpen the focus on transforming the health care delivery system and on restraining cost. “I think that’s really what the discussion is right now behind closed doors,” he said. “And the White House is talking about it as well. Look for the presidentto send out a clarion call for what needs to be there and you’ll see the committees in both the House and the Senateto pick up the challenge.”

Nichols said that giving MedPAC more authority could hold down spending. “Obviously,” he said, “both God and the devil are in the details.” It could be a “useful” way “to basically allow more science and less politics to get involved in thinking about what kinds of choices make the most sense,” he said.

— Andrew Villegas

Local Hospitals and Doctors Join Forces to Improve Health Care, Restrain CostsDr. Nancy Nielsen, immediate past president, American Medical Association 

Nielsen urged lawmakers to reconsider their opposition to taxing employer-provided health benefits. “We hope it comes back because it’s probably the fairest [approach].” Right now, she continued, people without employer-provided insurance pay for their coverage with after-tax dollars, while those with employer coverage pay with pre-tax dollars. “It’s a regressive tax,” she said. “It isn’t the right way to do it.”

On the question of costs, people are worried about whether health care reform “is something that is going to bankrupt our country,” she said. As for expanding MedPAC’s authority to set Medicare payment rates: “It’s an “interesting concept.” But, she added, whether it could tame rising health care costs “depends a lot on who’s on MedPAC and what the limit of their authority and their responsiveness is to unintended consequences.”

— Andrew Villegas

Local Hospitals and Doctors Join Forces to Improve Health Care, Restrain CostsElliott Fisher,  professor of medicine, Dartmouth Medical School and director, Dartmouth’s Center for Health Policy Research.

Fisher said he’d like to strengthen and accelerate “the notion of a learning health care system” in the legislation. He pointed to the inclusion of a Center for Innovation in one measure as a positive example. “I think we need a much bigger investment in learning from and in supporting the kinds of learning that’s going on in these communities,” he said.

He added that many of his colleagues are eager to see legislation that would encourage the creation of an Accountable Care Organizations, in which a group of hospitals, doctors and other health providers would be paid based on their ability to jointly meet certain cost and quality-of-care targets. Fisher helped to coin the term and develop the concept, which  would get funding for demonstration projects in some of the congressional proposals.

About MedPAC: “There are good reasons why making everything come back to the legislature is not necessarily a good idea. Empowering MedPAC could be helpful here. MedPAC would be great for the kinds of payment changes that need to be implemented. MedPAC could move quickly to help support Accountable Care Organizations. There are other kinds of things where MedPAC may not have the correct skills set, [such as] what changes to the insurance system should happen each year at the federal level.”

— Christopher Weaver  

Related Topics

Cost and Quality The Health Law