I don’t know about you, but just hearing the term “integration” makes my head swim. Everyday, I get emails from hospitals and health systems around the country announcing one or another kind of partnership they’ve entered into. The press releases are written in such cautiously tortured terms that often, by the time I get to the end, I’m not sure if the two organizations have formally merged, one has acquired the other outright, they’ve agreed to informally affiliate on clinical services, or IT or something else altogether, or if the two CEOs just met up at Starbucks to share a couple of laughs and swap war stories.
Sorting out the seemingly endless forms of integration taking shape these days in response to government and market forces certainly isn’t easy. The latest TrendWatch report from the American Hospital Association cuts through the confusion. It describes the rationale behind provider integration and lays out the many, varied types of integration from “vertical” to “horizontal,” many of which are still evolving.
It also explains the risks posed by conflicting regulations that could discourage integration despite its many benefits.
“The most common benefits of integration are improved coordination across the care continuum, increased operational efficiencies, greater access to capital for smaller or financially distressed hospitals, and support of risk assumption and innovation,” the Trendwatch states.
Most valuably, the report shows the different paths to integration that real-life health care organizations have taken, with highly successful results. For example, Memorial Hermann Health System’s efforts produced $70 million in savings in one year, thanks to reductions in readmissions and hospital-acquired conditions. Scripps Health reduced costs by $190 million by standardizing certain best practices. Advocate Physician Partners, which integrates 10 hospitals and 4,000 physicians, has seen dramatic decreases in admission rates and use of blood products, and big improvements in asthma control and diabetes management.
Hospitals, the report concludes, “are field testing clinical and financial innovations to ensure health care is patient-centered, accessible and sustainable for the future.”
Download a PDF of the report here.