GUIDE TO HEALTH CARE PARTNERSHIPS FOR POPULATION HEALTH MANAGEMENT AND VALUE-BASED CARE
July 2016 ACKNOWLEDGMENTS
The Kaufman Hall Author Team
Patrick M. Allen Managing Director, Mergers, Acquisitions and Partnerships ([email protected])
Michael J. Finnerty Managing Director, Mergers, Acquisitions and Partnerships ([email protected])
Ryan S. Gish Managing Director, Strategic and Financial Planning ([email protected])
Mark E. Grube Managing Director and National Strategy Leader ([email protected])
Kit A. Kamholz Managing Director, Mergers, Acquisitions and Partnerships ([email protected])
Anu R. Singh Managing Director, Mergers, Acquisitions and Partnerships ([email protected])
J. Patrick Smyth Senior Vice President, Strategic and Financial Planning ([email protected])
Rob W. York Senior Vice President, and Leader, Population Health Management division, Strategic and Financial Planning ([email protected])
Suggested Citation: Allen, P.M., Finnerty, M.J., Gish, R.S., et al. (2016, June). Guide to Health Care Partnerships for Population Health Management and Value-based Care. Chicago, IL: Health Research & Educational Trust and Kaufman, Hall & Associates, LLC. Accessed at www.hpoe.org
Accessible at: www.hpoe.org/healthcarepartnerships
Contact: [email protected] or (877) 243-0027
© 2016 Health Research & Educational Trust and Kaufman, Hall & Associates, LLC. All rights reserved. All materials contained in this publication are available to anyone for download on www.aha.org, www.hret.org or www.hpoe.org for personal, non- commercial use only. No part of this publication may be reproduced and distributed in any form without permission of the publication or in the case of third-party materials, the owner of that content, except in the case of brief quotations followed by the above suggested citation. To request permission to reproduce any of these materials, please email [email protected].
2 Guide to Health Care Partnerships for Population Health Management and Value-based Care TABLE OF CONTENTS
Executive Summary 4
Introduction 6
»» A New Business Model for Health Care 6 »» Increasing Partnership Activity 6
Key Considerations in Partnering for Population Health Management 9
»» Strategic Intent 10 »» Network Development 10 »» Population Health Management Functions 11 »» Health Plan Operations and Risk 11 »» Products 12 »» Economic Integration and Provider Risk 12 »» Asset Contribution and Exit Provisions 13
Partnerships That Could Be Considered 14
»» Merger for Population Health Management: AtlantiCare and Geisinger Health System 14 »» NewCo Health System: Beaumont Health 16 »» Joint Venture Insurance Product: Vivity 18 »» Joint Venture Health Insurance Company: Tufts Health Freedom Plan 19 »» Joint Venture Geographic Network: Together Health Network 19 »» Management Services Agreement: Novant Health Shared Services 20 »» Brand/Expertise Extension: The Mayo Clinic Care Network 22
Process Recommended for Evaluating Potential Partnerships 24
»» Phase 1: Pre-Partnership Assessment and Planning 24 »» Phase 2: Making and Executing the Strategic Partnering Decision 30
Concluding Comments 36
Endnotes 37
About Kaufman Hall and About HPOE 40
Guide to Health Care Partnerships for Population Health Management and Value-based Care 3 EXECUTIVE SUMMARY As the business model for U.S. health care population health management (PHM) transforms from a volume-driven model to a functions; health plan operations and consumer-centric, value-driven model, new risk, involving contracting arrangements, competencies are required of hospitals and insurance license and health plan health systems to effectively manage a capabilities; responsibility for product population’s health over the continuum of care development and management; needs, or a portion thereof. Many hospitals economic integration and the level of and health systems will need to partner with risk to be assumed; and assets to be other organizations to gain the capabilities and contributed to the venture and terms of efficiencies required to provide services under exit provisions. new care delivery and payment arrangements. »» Partnerships that could be considered This section describes seven named As might be expected, partnerships are partnership arrangements in various areas proliferating nationwide, with a wide range of the country, ranging from highly in arrangement types spanning from less- integrated partnerships to looser affiliation integrated contractual affiliations to highly options. Partnership objectives and early integrated agreements. initiatives are described, as available, Developed for hospitals, health systems, and other using publicly accessible information. health care organizations, Guide to Health Care »» Process recommended for evaluating Partnerships for Population Health Management potential partnerships and Value-based Care is intended to help executive Because achieving a best-fit partnership management and board teams understand key is more critical than ever for effective considerations for delivery system and health population health management, this plan-related partnerships for population health section outlines an approach that can management; partnership types; and the process direct organizational resources to the recommended for partnership exploration and most promising option(s) using strategic- decision making. financial assessment and planning. The approach includes a pre-partnership To meet these objectives, this guide is organized phase, which covers service area around three sections: assessment, organizational position assessment, development and testing of »» Key considerations in partnering for baseline projections for the partnership, population health management and evaluation of strategic options. The This section addresses seven second phase, which covers making considerations, including: strategic and executing the strategic partnership intent, namely what the organization decision, has five activities, including wants to achieve and how its establishing partnership objectives, success will be measured; network identifying and comparing options, development—i.e., the delivery selecting the likely best-fit partner and elements that will be included within the partnership structure, and executing the partnership’s scope; responsibility for agreement and transition plans.
4 Guide to Health Care Partnerships for Population Health Management and Value-based Care Partnerships are accelerating as participants in guide, as an integral part of an organization’s health care ready themselves for a value-based, population health strategy. Resources such as population health-focused delivery system. Leadership Toolkit for Redefining the H: Engaging This guide concludes with a description of the Trustees and Communities1, Approaches to characteristics of successful strategic partnerships. Population Health in 2015: A National Survey of Hospitals,2 and Hospital-based Strategies for Outside this publication’s scope are the many Creating a Culture of Health3 address hospital- types of hospital-community partnerships community partnerships in detail and are available with public health departments, chambers through hpoe.org. of commerce, community health centers, schools, social service agencies, city and county The legal, taxation and regulatory issues governments, faith-based entities, YMCA/YWCA surrounding partnerships are complex and and other entities to improve community health subject to change. This guide does not provide and build a culture of health. These partnerships information in these areas; providers should are important and should be considered, along seek expert counsel. with the types of partnerships described in this
Guide to Health Care Partnerships for Population Health Management and Value-based Care 5 INTRODUCTION
A New Business Model As always, financial integrity continues to matter for Health Care significantly, differentiating organizations that can afford to assume higher levels of risk through The business model for U.S. health care is partnership arrangements that meet the needs transforming from a volume-driven model to of growing patient populations. a consumer-centric, value-driven model.4 The value-based care model’s objective is to improve Increasing Partnership Activity quality, access and outcomes, while reducing costs through the effective management of a Due to the cost and time required to develop population’s health over the continuum of its population health management capabilities on health and health care needs. their own, many hospitals and health systems are establishing collaborative partnerships and “Anywhere care” is the new modus operandi affiliations with providers, health plans and for nonacute, low-intensity services. Such care other organizations to gain the needed expertise will occur primarily in ambulatory or home and scope. As a result, both traditional and settings through in-person or virtual means— nontraditional partnerships are proliferating whichever best meets the consumer’s needs nationwide. The wide range in arrangement types and goals. spans from less integrated contractual affiliations To manage a population’s health, new to highly integrated asset purchases. Stakeholder competencies are required of hospitals and lines continue to blur. The arrangements may health systems, including clinical integration; be between: consumer, clinical and business intelligence; »» Traditional providers: for profit, not-for- operational efficiency; customer engagement; profit, public hospitals, academic health and efficient network development (see Sidebar centers, Catholic or children’s hospitals, 1). According to a recent national survey by rural or community hospitals, large 5 the Health Research & Educational Trust, more physician groups and large health systems than 90 percent of responding hospitals agree or »» Other stakeholders: payers, employers, strongly agree that population health is aligned retailers, technology firms and with their mission. However, the survey also other entities indicates that only 19 percent of responding hospitals believe that they have the financial Additionally, partnerships increased across the resources available for population health. broader health care industry, including insurers, retail pharmacies and clinics, biotech companies, Many hospitals and health systems will need device manufacturers and others. to partner with other organizations to gain the capabilities and efficiencies required to provide Among hospitals and health systems, announced services under new care delivery and payment provider-provider transactions nearly doubled arrangements. Their focus with population health from 2007 to 2015.7 Additionally, the percentage management will be extended to the full or of announced nontraditional partnership defined portion of the provider care continuum transactions, such as management services (see Figure 1). Additionally, partnerships with agreements, joint operating agreements, joint public and community agencies likely will be ventures and minority investments, among needed to address and improve the nonmedical others, rose to 16 percent in 2015, up from 7 social, economic and environmental factors percent in 2007. that influence health status at the population level in the nation’s communities.6
6 Guide to Health Care Partnerships for Population Health Management and Value-based Care Figure 1. Provider Care Continuum for Population Health Management
Source: Kaufman, Hall & Associates, LLC
Additionally, although not in this publication’s For many organizations, the rationale for scope, hospitals and health systems are partnership is now moving toward a longer- increasingly collaborating with community term strategy for meeting consumer/patient partners to expand their scope of services needs under a value-based care delivery model. to address nonmedical factors that influence Many drivers now center on gaining the core health status, including obesity, preventive competencies required to manage population and screening services, access to care, health, as described fully in Sidebar 1. behavioral health, substance abuse and tobacco addiction. A recent survey by the Association for As organizations partner with other organizations, Community Health Improvement and the benefits to patients and efficiencies can be American Hospital Association revealed that achieved through: more than three-fourths of surveyed hospitals »» Centralization of functions such as had partnerships with school districts and local IT, purchasing and human resources public health departments.8 »» Rightsiting or rightsizing service and With hospital-hospital partnerships, the latest resource distribution across the service area HealthLeaders survey indicates that 38 percent »» Process re-engineering, clinical of responding hospitals were recently involved variation reduction and increased care with partnership activity, while 34 percent were management and coordination involved with an acquisition of one organization by another, and 10 percent with a combining The partnering organizations can achieve much of two organizations into one.9 more efficiencies that benefit patients through the approaches indicated in the first two bullets, During the past decades, many provider compared to more limited gains indicated in partnerships have been traditional arrangements. the last bullet. These transactions often were driven by the needs of a smaller organization, which required the help of a partner to improve its clinical programs and facilities.
Guide to Health Care Partnerships for Population Health Management and Value-based Care 7 Sidebar 1. Organizational Capabilities for the Value-based Business Model
Clinical Integration. Clinical and economic Operational Efficiency. Operational efficiency is alignment of physicians, nurses and other required for sustainable financial performance in providers across the care continuum the short and long term. Considerations include furthers organizational goals around quality operating cost, structural costs, service network improvement, efficiency, and strategic and and clinical variation. financial sustainability. Considerations include shared hospital-provider incentives, and Clinical and Business Intelligence. Collecting, relationships between physicians and other care analyzing and using clinical and business team members. data are critical to setting appropriate goals and intervention targets and to performance Quality and Care Management. To continue management. Considerations include acquisition meeting the increased health and health care of clinical and administrative tools, ongoing needs of patients in their communities, hospitals data collection and management, data must achieve high-quality and consistent care analytics and the integration of findings with outcomes. Considerations include quality and organizational plans. care-management infrastructure and use of team- based and coordinated care delivery models to Financial Position. A sound financial position improve quality metrics, reduce readmission enables organizations to make the investments rates and meet other expectations of networks needed to manage population health in their that are forming. communities.
Network. A network that includes hospitals, Customer Engagement. Organizations that can physicians, post-acute providers and other innovate in network development and contracting, delivery system partners—enables an attracting employers, payers and consumers, organization to provide the full continuum of can enhance their essentiality. services in its community or participate as a Leadership and Governance. Deep bench strength contracted provider in a network offered by of clinical, administrative and governance another entity. Issues that require consideration leadership drives operational and strategic include breadth of specialist and primary care change. Considerations include current and service offerings, relative size of operations, prospective physician leadership, administration referral sources, service area and overall depth and succession, incentive alignment and network accessibility. board health care expertise.
Source: Kaufman, Hall & Associates, LLC
8 Guide to Health Care Partnerships for Population Health Management and Value-based Care KEY CONSIDERATIONS IN PARTNERING FOR POPULATION HEALTH MANAGEMENT
Participation in managing population health under purchasers; a robust delivery network capable risk-bearing or value-based arrangements is the of delivering services to a broad population; clinical/business imperative for hospitals and and infrastructure, innovation and information health systems. Organizations that commit early systems to experiment with and implement to building the competencies and infrastructure best practices and new care delivery models. required to advance population health can position or reposition themselves to achieve Most hospitals and health systems will not a sustainable role in their communities. have every element of the care continuum illustrated in Figure 1. A limited number of Depending on the role the hospital or health sophisticated organizations will be able to system expects to play in population health have a health plan, but many organizations management, critical capabilities include the will position themselves to deliver services and ability to accept and distribute provider risk assume risk under delegated-risk agreements and/or health plan risk (see Sidebar 2). Also with other organizations. required are skill sets described earlier, including comprehensive care management, network Expertise and partnerships to create a post-acute development and others. offering within the population health management framework will be particularly important given As described earlier, population health the importance of improving patient care by management requires partnerships to deliver eliminating unnecessary admissions and services across the care continuum at an affordable readmissions to acute care from post-acute care cost and appropriate quality to the community. settings, and the prevalence of arrangements Partnerships enable such benefits as: one-stop that bundle acute and post-acute care delivery. shopping for health care consumers and other
Sidebar 2. Types of Risk Assumed by Hospitals and Health Systems
Risk in population health management contracting arrangements for hospitals and health systems falls into two categories:
»» Provider risk is assumed by the entities delivering health care services, and includes two types: • Clinical or performance risk, which is the ability to deliver patient care that exceeds the targets for safety, quality, compliance and other measures defined in the risk contract with the payer. • Utilization or financial risk, which is incurred by a provider organization through acceptance of a fixed payment in exchange for the provision of care anticipated to have an expected level of utilization and cost. › Hospital- or insurer-owned plans that are contracting with providers for the providers’ provision of care under capitated arrangements are not technically taking on provider risk but rather are delegating such risk. »» Insurance or plan risk is assumed by hospitals and health systems that have their own insurance plans, with responsibility for attracting and retaining members and the overall costs of plan administration and/or care delivery.
Source: Kaufman, Hall & Associates, LLC
Guide to Health Care Partnerships for Population Health Management and Value-based Care 9 In developing a population health management Network Development venture, consideration of seven interrelated issues is important: 1) strategic intent; 2) network Consideration of network development involves development; 3) population health management answering questions including: What delivery functions; 4) health plan operations and risk; 5) elements will be included within the scope of products; 6) economic integration and provider the partnership? Will each be owned, managed, risk; and 7) asset contribution and exit provisions. organized, outsourced or excluded? Who will be responsible for each? Who’s responsible for Strategic Intent designing and developing the network? Effective and sustainable population health Consideration of strategic intent involves asking: management entails the design and continuance What do we want to achieve and how will our of a high-performance delivery network that success be defined and measured? Typically with covers the care continuum under an optimized population health management arrangements, contracting strategy. Although many of the partnering objectives center on the delivery of traditional strategic criteria for a viable network coordinated care across the care continuum, still apply (e.g., demand for services, access as achieved through the physician network points and footprint, positioning), additional and its governance, the delivery of specific criteria will be needed for a high-performance services in targeted areas and/or population network under a population health management health management-focused predictive analytics construct. Specific criteria include: and IT infrastructure. »» Network essentiality and population An example is the partnership of Centura health management care continuum: Health, a 15-hospital, 6,000-physician health To be considered “essential,” a network system in Colorado and western Kansas, with must provide the breadth and depth of DaVita HealthCare Partners, a leading provider care desired by the purchaser (a payer of kidney care and a medical group and network or employer), and be able to handle management company. the projected volume of patients. Through a 50-50 joint venture company branded Network essentiality is usually tied to an as FullWell, DaVita HealthCare Partners will organization’s primary care practitioner extend its operations and services to new network and/or geographic presence, areas, gaining the benefits of Centura’s in- and measured based on the population place clinically integrated network, preferred that can be attributed to the provider hospital network, community and post-acute delivery network. The larger services, and population managed under an the population captured or covered accountable care organization (ACO) and the by an organization, the more essential Medicare Shared Savings Program. Centura it likely is in the population health will gain HealthCare Partners’ population health management paradigm. management expertise in delivering IT across »» Network adequacy: “Network adequacy” all components of care delivery to support early refers to sufficiency of access to in- identification of patients at high risk for chronic network primary care and specialty health conditions and real-time feedback on physicians, hospital services and other the efficacy of treatments.10 specified continuum-of-care services in a delineated service area. In many instances, service area and network adequacy standards are driven by national and state laws and regulations, which vary depending on the regulator. Adequacy will depend on the population
10 Guide to Health Care Partnerships for Population Health Management and Value-based Care served, so health systems will need to Population Health be thoughtful about whether they are Management Functions able to build, contract for and deliver an appropriate network, given each population’s Consideration of population health management variable set of requirements. functions involves answering questions including: »» Service and distribution right-sizing Who’s responsible for the chief population health and right-siting: To succeed under management functions, such as population value-based arrangements, many health analytics, care coordination management organizations need to systematically tools and utilization management? What’s the reconfigure their networks of facilities desired relationship with this entity? and practitioners to be highly efficient, The key issue for these functions is the degree to deliver consistent quality across all which they are centralized and fully developed sites and manage patients in the least- in a population health management-purposed intensive setting possible while still entity as opposed to remaining in the providers’ providing the necessary level of care.11 or health plans’ care management departments. Unnecessary duplication of services To the degree that the capabilities are centralized must be eliminated. Proactive providers within a population health management entity, the are working hard to determine the best entity may justify a care management payment combination and location of services and from payers or employers who contract with programs across inpatient and outpatient it for services. sites, and across virtual services, such as telehealth. »» Network size: As population health Health Plan Operations and Risk management-based value arrangements Consideration of health plan operations and risk reshape utilization, many hospitals involves answering these questions: Who brings and health systems will need larger to the arrangements the insured member lives attributed or accessible managed and the insurance license? Does the organization populations to support organizational need health plan capabilities to achieve its infrastructure and associated costs. vision? Capabilities include marketing and sales; Growth typically requires expansion claims management; network management through strategic partnerships or and operations; product development; actuarial affiliations with employers, providers services; business intelligence and customer or health plans. service. If the answer is “yes,” does it need to These criteria are not mutually exclusive and be full capability or can selected plan capabilities each has certain nuances that will be important be assumed by another entity? If the answer for hospitals and health systems to understand is “no,” what’s the desired relationship with and evaluate.12 the entity that brings the attributed lives to contracting arrangements? As organizations determine the right breadth for their network, trade-offs will be apparent. Provider-sponsored health plans are health The broader the network, the harder it typically insurance products or plans that are owned and is to manage consistency of clinical practice controlled by one or more hospitals or health throughout the system—especially without systems. The organizations have an insurance vested and aligned partner entities. However, license, and they market insurance products the narrower the network, the more difficult it directly to consumers. With plans owned by will be to manage the risk associated with a health systems, the systems manage not only more limited patient population base. the total cost of care but also the full financial risk for insuring the patient. In exchange, they receive and administer the full premium payments.
Guide to Health Care Partnerships for Population Health Management and Value-based Care 11 In certain geographic areas, provider-sponsored opportunity is region-specific and organization- plans can be a significant benefit for hospitals specific, and requires thorough evaluation. and health systems if they have an appropriate number of managed lives and are underwritten, Products operated and marketed in a manner consistent with the overall strategic plans of the provider Different types of insurance and health sponsor(s). In certain circumstances, there may plans offer different types of products. Key be an opportunity for providers to either join with partnership questions for hospitals and health existing multiprovider-sponsored plans or merge systems include: with another organization’s provider-sponsored plan. Such arrangements allow organizations »» Who is responsible for developing to manage population health without assuming the product(s)? full financial risk for an insurance product, or »» How is the product going to be priced? for sharing ownership of other entities along Who is responsible for this? the care continuum. »» How is the product going to be branded in the region? Who is Health plans are being acquired or newly responsible for this? developed in various parts of the country. In the Midwest, for example, a subsidiary of Health systems can take a high-level look Ascension plans to buy a Michigan insurer. The at population health management product insurer would enable the clinically integrated opportunities by considering evaluation criteria network owned by Ascension and Trinity Health, such as enrollment size, growth potential, named Together Health Network, to participate managed care penetration, revenue (premium) in Michigan’s health insurance exchange.13 opportunity, profitability, regulatory reform environment and population health risk profile. Unity Health Insurance, an affiliate of University An organization’s ability to produce savings of Wisconsin Health (UW Health), and Gundersen through reduced total medical expense compared Health Plan, a subsidiary of Gundersen Health to baseline fee-for-service metrics while assuring System (GHS), signed a letter of intent to explore achievement of quality metrics will be critical a partnership, which may include a business to the success of such health plan products. combination encompassing nearly 250,000 members. The combination could allow GHS Products have varying degrees of economic and UW Health to manage the health of larger integration and shared risk, so overlap with populations. Together, the organizations offer other areas discussed here is likely. a wide array of products and services and have insurance licenses in Wisconsin, Iowa and Minnesota.14 Economic Integration and Provider Risk In North Carolina, Cone Health, a provider network with six affiliated hospitals, received Partnership success typically depends on some a license to offer health insurance plans, likely to level of economic integration or alignment around include a Medicare Advantage plan, beginning assuming provider risk. The key questions to in 2015. It also initiated a joint venture with a answer are: What is the primary means of Texas-based independent practice association, economic alignment (for example, contract, which will provide the infrastructure to handle joint venture arrangement or new-company insurance claims and policies.15 agreement)? What is our anticipated revenue model? Discussions around the revenue model Risks associated with development of new inform the population health management provider-sponsored plans can be significant network and product design. for hospitals and health systems. But each
12 Guide to Health Care Partnerships for Population Health Management and Value-based Care Hospitals and health systems will need to Asset Contribution determine the level of provider risk they wish and Exit Provisions to assume, ranging from low-risk, pay-for- performance to case rates (episode-of-care or As organizations consider the commitment of bundled payments), to partial or subcapitated financial or operational assets to a partnership, risk, to delegated and shared risk, and up to the key questions to answer are: What assets full global capitation.16 are we potentially contributing to, or investing in, for this venture? Often-contributed assets Level of exclusivity between the parties is include care management programs, physician another important issue. Blue Shield of California’s practices, facilities and other resources. What ACO arrangements with 31 providers across assets are we not contributing to this vehicle the state are examples of nonexclusive, or venture? contract-based partnerships that align financial incentives and shared governance. Blue Shield Important questions to answer related to exit sets an annual global budget of total expected provisions are: Under what terms could the spending for the care of an established member partnership be terminated and by whom? What population. The budget is developed from data recourse exists for each party? and analysis shared by Blue Shield with the provider groups. The parties agree to share Sidebar 3 is a checklist of recommended risk for achieving the savings targets. Success considerations for partnerships to manage requires that the organizations work together population health. to improve care quality while taking cost out of the delivery system.17
Sidebar 3. Checklist of Recommended Considerations for Population Health Management Partnerships
q Commit early to building the competencies manage population health without assuming and infrastructure required to advance full financial risk for an insurance product population health q Evaluate types of products offered through q Recognize that owning or operating every insurance and health plan partnerships element of the care continuum typically will not be feasible; partnerships likely will be q Determine the level of provider risk your needed, particularly with post-acute offerings organization wishes to assume
q Know what you want to accomplish with a q Identify the means of economic integration partnership arrangement, and specifically offered by a partnership, and the expected how success will be defined and measured revenue model
q Define the network delivery elements that q Define the assets your organization is will be included within a partnership’s scope, potentially contributing to, or investing in, and who is responsible for each element the partnership
q Determine where responsibility will lie for q Determine the terms under which the functions such as population health analytics partnership could be ended and utilization management
q As appropriate, thoroughly consider arrange- Source: Kaufman, Hall & Associates, LLC ments that will allow your organizations to
Guide to Health Care Partnerships for Population Health Management and Value-based Care 13 PARTNERSHIPS THAT COULD BE CONSIDERED Partnerships for population health management Merger for Population Health will cover a wide range of activities, including: Management: AtlantiCare and broadening the network coverage within the community, region or state; developing clinical Geisinger Health System and business intelligence offerings (for example, In October 2015, Atlantic City, N.J.-based predictive modeling for population health AtlantiCare health system officially became a management); extending care management member of Danville, Pa.-based Geisinger Health capabilities (for example, evidence-based System, creating the bedrock and accelerant for protocols); the development of health plans that effective and rapid execution of value-driven, offer specific products (for example, Medicare population health-based care delivery in southern Advantage, HMO, ACO); and managed care New Jersey. contracting, among others. With 600 beds at three locations and more than Choosing the most appropriate partnership 700 physicians serving southern New Jersey, arrangement depends on the goals and AtlantiCare has a strong clinical footprint in its objectives of the partnership, as described later primary service area. It has 65 percent inpatient in this guide. Sought-after population health share, a large network of outpatient sites and management-related benefits often include was a 2009 Malcolm Baldrige award recipient enhanced service distribution and physician for performance excellence. engagement; value-based contracting; network participation; or participation in ACOs and For AtlantiCare, the goal of the partnership is clinically integrated networks. to ensure the future health of the community served in New Jersey through accelerated A large number of different types of looser progress in meeting Triple Aim population collaborative arrangements are emerging as health management goals. “Geisinger is well health care evolves to a value-based model. experienced in the technology enhancements These creative affiliations are seen as a pathway and care redesign necessary to successfully for creating value for communities and realizing achieve the outcomes most meaningful to some of the benefits of a partnership, without our patients and communities,” notes David combining governance structures. P. Tilton, AtlantiCare’s president and CEO.18
Examples of provider and health plan partnerships AtlantiCare had been moving to a population follow, representing the range of possible health focus before the term population health options and purposefully including new was widely used. With the board’s oversight, in arrangements, whose track record will be the 1980s and 1990s, the leadership team began established in coming years. to develop and execute a plan to change the Please note that many of these examples involve paradigm of health care from one focused on dynamic arrangements, so their description here acute care to one focused on creating health. may not reflect the organization completely Larger covered populations would be needed accurately at press time. The endnotes indicate to ensure the highest-possible quality and to the publicly accessible sources used to develop manage the financial risk of doing so. AtlantiCare referenced information. leadership knew that strategic, clinical and financial resources would be required to obtain and provide population health management-
14 Guide to Health Care Partnerships for Population Health Management and Value-based Care based services to additional covered lives, For Geisinger, the partnership enables growth and that major decisions related to obtaining through scalability of its clinical operations such resources would have to be made. The and health plan into a different geography, financial situation in greater Atlantic City and thereby providing “proof of concept” of its emerging success requirements in the early integrated provider-payer health care model. 2010s were beginning to challenge the long-term “Our goals are to improve the health status of achievement and sustainability of AtlantiCare’s the community, reduce the total cost of care vision and plan on a stand-alone basis. while improving quality and efficiency, transform care from episodic to value-focused, and provide AtlantiCare embarked on a best-practice strategic meaningful coordination across all of health options evaluation process, and Geisinger care,” said Glenn D. Steele Jr., M.D., Ph.D., Health System emerged as the best-fit partner Geisinger’s recently retired president and CEO. opportunity. Geisinger is an integrated services organization that serves more than 3 million The initiatives to be pursued by the partners residents in 45 Pennsylvania counties. With a include: implementation of evidence-based reputation for exceptional quality and health medicine programs; enhancing population health delivery innovation, Geisinger owns and operates management capabilities and clinical services; a health plan with more than 500,000 members, optimizing the use of the electronic health record and has affiliations with 3,200 primary care and clinical informatics; and successfully using physicians and 23,000 specialists and hospital- population health- and value-based payment based providers. models in New Jersey.
Sidebar 4. Selected Transaction Terms of AtlantiCare-Geisinger Agreement
»» Ten-year commitment to AtlantiCare as full authority over personnel decisions Geisinger’s foundational partner in New and benefit programs Jersey, requiring mutual agreement »» Geisinger’s stronger financial profile over any strategic initiatives in southern provides access to an “AA” credit rating New Jersey and overall collaboration for for debt issuance and security for capital the rest of New Jersey and Philadelphia and other commitments »» Retention of AtlantiCare brand for at »» Ability to spend a specified amount of least 10 years, with tag line of “affiliate capital over the next five years, provided of Geisinger” or similar performance metrics are met; a specified »» No shutdown or sale of any hospital or contractual strategic capital commitment, major ambulatory campus for 10 years with the first specified amount funded »» AtlantiCare autonomy over annual by AtlantiCare, and the next specified operating and capital budgets, subject capital amount funded equally to specified limits, provided specified »» Commitment to jointly developing the performance metrics are met regional strategy »» Three Geisinger voting members »» Establishment of an academic training added to AtlantiCare System board; program plan (residency and allied one AtlantiCare member on Geisinger health) to support clinical program System board and one AtlantiCare growth and physician recruitment member on Geisinger insurance board »» Subject to AtlantiCare meeting Sources: AtlantiCare and Geisinger Health performance metrics, AtlantiCare retains System. Used with permission.
Guide to Health Care Partnerships for Population Health Management and Value-based Care 15 With an “eye on the greater good of community »» Partnering arrangement often health,” AtlantiCare and Geisinger signed a letter accomplished through a corporate-style of intent in November 2013 and a definitive process, which involves a small group agreement in May 2014. Following the regulatory of individuals determining many of the approval phase, the closing occurred in October details, and announcement near or at the 2015. Sidebar 4 on page 15 outlines key terms time of a definitive agreement. of the agreement. »» Have overcome extremely challenging hurdles that singly or in combination NewCo Health System: could derail the partnership process at Beaumont Health any point in time.
Beyond the strategic partnership types already Some of these partnerships aim to play a major described, also emerging is a new type of role in organizing care delivery in their service partnership that involves the coming together of areas. Partnerships may increase scale at such two entities to create an entirely new company a level that could not otherwise be achieved or “NewCo.”19 by one partner through organic growth and/ or incremental smaller transactions. Recent examples of these transformational hospital and health system partnerships For example, Southfield, Mich.-based eight- include RWJ Barnabas Health in New Jersey hospital Beaumont Health was created through (Robert Wood Johnson Health System and the September 2014 merger of Royal Oak-based Barnabas Health) and Northwestern Medicine Beaumont Health System, Dearborn-based in Illinois (Northwestern Memorial HealthCare Oakwood Healthcare, and Farmington Hills- and Cadence Health). Examples also include based Botsford Hospital. entities that cross over industry verticals, such as DaVita HealthCare Partners, Inc., which is Beaumont Health is focusing on developing the combination of dialysis provider DaVita and key elements of a value network strategy in medical group operator HealthCare Partners. the greater Detroit area, including geographic and physical presence; clinical programs and These transactions typically are characterized physician alignment; and business infrastructure by the following: and partner relationships.
»» Not just a bigger version of one of the former Beaumont Health is governed by a single organizations. Rather, the organizations board and executive leadership structure with form a new company created by legacy representation from the three organizations. A organizations that have set aside their systemwide, physician-led Clinical Leadership historic interests to do so. Council, including physicians, nurses and other »» Common vision and point of view health providers, develops and drives clinical to pursue a much higher level of alignment and integration. organizational performance for future Although these NewCo entities are difficult to success as a model health system centered create, the trend is likely to accelerate and have a on community population health. significant impact on future health care delivery. »» Capable of moving at an unprecedented Table 1 outlines how these partnerships differ speed of change to reach the from traditional arrangements. transformational goals. Not the arrangements taking place one hospital or small health system at a time, occurring slowly during health care’s transitional period.
16 Guide to Health Care Partnerships for Population Health Management and Value-based Care Table 1. Comparison of Traditional Health Care Partnership Arrangements with Transformative New Entities
Traditional Arrangements Transformative New Entities Common vision for model health Financial and intellectual system of the future and benefit Impetus capital gap of scale required to achieve such; thinking the big think Transformation for low-cost, high- Vision Survival-driven quality population health management Desired speed Driven by current challenges Driven by desire for rapid repositioning of change Meeting challenges of Time horizon Meeting the challenges of the future current environment Creating something new and Buying or selling–adopting Nature of transformative through a much more the culture and benefits of arrangement difficult process of using a data-driven the acquiring entity methodology to select best practices View of Community assets; no clear buyer Organization-owned assets who owns or seller CEO with core management Who leads effort C-suite-led, board-approved team and board task force Typically well-defined by Typically undefined, but Process acquirer best-practice oriented Resulting Acquiring organization New company structure Size of Large acquires small; or two Organizations of varying organizations smalls merge sizes come together Mandatory Entirely voluntary, but likely “Deal” required or voluntary required for future success Development of Disciplined approach Increasing use of disciplined approach, business case sometimes used but variation exists; some do, some don’t Expected return Yes, synergies identified to help Yes on investment “fund” transformation
Source: Kaufman, Hall & Associates, LLC
Guide to Health Care Partnerships for Population Health Management and Value-based Care 17 Joint Venture Insurance population health management-related joint Product: Vivity ventures are emerging quickly in many areas of the United States. A joint venture is any short-term or long-term arrangement between a hospital or other entity Among the most-watched new arrangements and one or more unrelated entities to form and is the Vivity joint venture for a narrow but elite operate a common enterprise that: network HMO product. Vivity was launched in September 2014 through a regional joint venture »» Pursues a new or existing activity partnership between Anthem Blue Cross and or purpose seven hospital systems with strong physician »» Allows for some level of involvement networks in Los Angeles and Orange County by the participants in the management, in southern California20 (see Figure 2). control and/or direction of such activity Anthem holds the insurance license, but all parties or purpose share risk for new product performance. Vivity »» Provides for the sharing among was developed specifically (at least initially) for participants of economic risks and the large-group employer market and is priced rewards resulting from such activity competitively with other HMO offerings in the or purpose market. Physicians in the hospitals’ networks Joint ventures can be structured as any legally are receiving capitation payments.21 Savings recognized form of business organization. In past are expected through elimination of redundant decades, general categories of joint ventures have overhead services and lower utilization achieved included operational or clinical joint ventures, through highly coordinated and effective care.22 management or leasing joint ventures, and real Although many details are not public, distributions estate joint ventures. Now, given the emphasis to health system partners are based on quality, on developing population health competencies, performance and equity.
Figure 2. Vivity Joint Venture
Source: Kaufman, Hall & Associates, LLC
18 Guide to Health Care Partnerships for Population Health Management and Value-based Care The providers are working together to keep Health System, and Wentworth-Douglass costs down, and in the future may use common Health System—form the core of Tufts Health wellness resources, care management systems Freedom Plan’s provider network. Network and a centralized call center.23 Reimbursement of hospitals employ more than 10,000 people, the system partners is risk based, and payment serve more than a third of the state’s population, requires meeting specific quality targets.24 and benefit from shared resources.
Interoperability of EHR platforms across Vivity For example, a shared data-driven population is under development. The Vivity partners are health management program is producing balancing business requirements with alignment operational enhancements through sharing of of provider technology strategies, and have best practices.26 Initiatives include development identified an appropriate data integration strategy of a process that uses centralized and predictive that also will be leveraged across other Anthem analytics and benchmarking capabilities to inform products with the Vivity systems. local adoption of evidence-based standardized care protocols, such as the management and Technology-enabled, consumer-friendly offerings treatment of patients with chronic asthma.27 to Vivity members are a focus, and include: Live Health Online, a consultative live video chat with a physician; a 24/7 nurse line; after- Joint Venture Geographic Network: hours urgent care; and Mobile Health Consumer, Together Health Network an app offering members biometrics, health- risk assessment and information on timely In 2014, Ascension Michigan, Trinity Health, and health interventions. physician partners across Michigan created a physician-led, clinically integrated network of In year one, Vivity met its enrollment targets health care providers called Together Health through contracts with 13 large employers. Network. The network includes 25 hospitals, more than 100 ambulatory centers and more Joint Venture Health Insurance than 5,000 physicians. An estimated 75 percent of Michigan residents reside within 20 minutes Company: Tufts Health of a Together Health Network provider. Freedom Plan Together Health Network’s objective is to improve In April 2015, Granite Health, a partnership of both health and care for Michigan residents by five of New Hampshire’s largest health systems, facilitating relationships within its network of and Tufts Health Plan, one of the leading health physician organizations, health systems, insurers, insurers in the country with more than 1 million patients, and health providers. At the core of members, announced a joint venture for a new Together Health Network’s culture are clinicians insurance company named Tufts Health Freedom connected by a common purpose and meaning; Plan.25 The goal is to provide residents of New they lead the team-based care approach, which Hampshire with coordinated, high-quality, and is based on a shared commitment and vision cost-effective health care coverage through of positive outcomes. The network is designed insurance products and provider networks to position physicians and providers across the that focus on population health management. state to move into value-based contracts to A variety of health plans will be available to manage statewide populations of covered lives. employers and their employees. Operations launched in New Hampshire in January 2016. “Both Ascension and Trinity Health have been performing at benchmark levels in terms of The five Granite Health systems—Catholic quality, while at the same time delivering care at Medical Center, Concord Hospital, cost levels well below the state average,” noted LRGHealthcare, Southern New Hampshire Patricia Maryland, Dr.PH, president of health
Guide to Health Care Partnerships for Population Health Management and Value-based Care 19 care operations and chief operating officer of health care services that are designed to control Ascension. “This collaboration will allow us costs and assure quality of care; 2) selectively to combine our outstanding performances in choosing network physicians who are likely to terms of cost and quality into one, statewide further these efficiency objectives; and 3) the product unlike any other.”28 The network will significant investment of capital, both monetary be closely watched nationwide as it moves and human, in the necessary infrastructure and forward to achieve clinical integration through capability to realize the claimed efficiencies.31 contracting arrangements. 32 A clinically integrated network is an organization Management Services Agreement: established to incentivize hospitals and employed Novant Health Shared Services and independent physicians to work together to improve outcomes, reduce costs and manage Management services agreements typically a population’s health.29 Key components of involve a contractual arrangement for a larger clinical integration include: health care system to provide partial or full management services for a smaller organization. 1. Collaboration between hospitals and In some cases, organizations enter into service- physicians (both independent and or expertise-specific agreements, such as for hospital-employed) purchasing or clinical best practices that benefit patients in the served communities. 2. Purposeful agreement to improve quality and efficiency of care, including The larger system commonly provides services in enhanced patient health status, care exchange for a negotiated fee. For example, the outcomes, utilization and other smaller entity may pay management fees equal defined factors to a percentage of annual operating revenue, 3. Use of evidence-based practices and and incentive payments when it meets mutually data-driven performance improvement, agreed-upon performance goals. informed by IT tools to accomplish #2 These agreements typically do not involve 4. A written arrangement with a payer a change in ownership or governance and, that aligns financial incentives of the thus, do not require state or federal regulatory hospital and physicians to accomplish approval. Numerous health systems have used #1 through #3. management services agreements to garner Because collaboration and coordination between some of the advantages of a partnership providers participating in clinical integration without having to develop a more integrated initiatives often involve contractual agreements, arrangement. clinical integration has been subject to definition For the health system providing management by the Federal Trade Commission and the U.S. services, such agreements offer a new revenue Department of Justice and to their scrutiny source and the chance to expand share in an related to possible anticompetitive practices existing area or to establish share in a new under antitrust law. area. The economic risk is minimal because The legal definition of clinical integration is: the health system does not assume the debt or “An active and ongoing program to evaluate other liabilities of the managed organization. and modify practice patterns by the network’s Typically, the managing entity also does not physician participants and create a high degree supply a cash infusion or a commitment to of interdependence and cooperation among the major capital projects. physicians to control costs and ensure quality.”30 For strong but smaller managed entities, these This program may include: 1) establishing agreements may provide the support of a larger, mechanisms to monitor and control utilization of more sophisticated system, while allowing the
20 Guide to Health Care Partnerships for Population Health Management and Value-based Care managed entity to maintain governance autonomy Novant Health, an integrated delivery system and independence in providing health care in headquartered in Charlotte, N.C., developed their communities. Such agreements also may Novant Health Shared Services to help strengthen offer an opportunity for financially distressed health care in local communities and provide hospitals to reposition while ensuring the an opportunity for growth through partnership community asset remains under local governance. arrangements. Novant Health has an extensive In either case, the managed entity benefits from network across four states: North Carolina, South access to the larger system’s operational and Carolina, Virginia and Georgia. clinical expertise. Novant Health Shared Services offers a variety Other potential joint benefits include the ability to: of products including hospital management, supply chain/purchasing, revenue cycle, »» Share intellectual capital by linking clinical equipment management, service line quality programs and best practices management and others (see Figure 3). The »» Achieve back-office and support key to the shared services model is its flexibility function synergies to tailor an arrangement that works for a »» Integrate IT platforms specific community hospital. The partnering organizations maintain their autonomy and, Health systems that are looking to expand through access to Novant Health’s corporate into neighboring areas may use management resources and expertise, achieve improved services agreements as a growth vehicle operational efficiencies and best-practice through longer-term agreements with multiple collaboration across the provider network.33 smaller providers.
Figure 3: Novant Health Shared Services Offerings
• Extend group purchasing organization membership Supply Chain • Infrastructure to support advanced sourcing/purchasing, including evaluation of service contract opportunities
• Internal resources available to complete maintenance and repairs of clinical equipment (opportunity to in-source maintenance Clinical Engineering contract costs) • Single service provider continuity advantage
• Ability to deploy experienced clinical team for regulatory site visit Quality and Regulatory readiness and preparation • Access to best-in-class quality processes and industry benchmarks
• Capabilities to implement and maintain electronic health records Information Technology • Additional services include disaster recovery, web hosting and general consulting
• Contemporary health care delivery model implementation Clinical Transformation • Alignment of shared system clinical guidelines/standards
• Service line development support and analytics Other • Other areas of expertise include human resources, real estate, construction and development
Source: Kaufman, Hall & Associates, LLC
Guide to Health Care Partnerships for Population Health Management and Value-based Care 21 Brand/Expertise Extension: The Mayo Clinic Care Network Brand extension involves using a well-known care. Members are invited to join the network brand name to increase the visibility and use of following a comprehensive evaluation process a new offering. In health care, brand extension that includes a thorough assessment of the offers an affiliation option that is used by well- organization’s governance structure, clinical known organizations that have built strong practice and business practices, as well as its reputations and name recognition in their quality, safety and service efforts. regions and/or nationwide or worldwide. The Mayo Clinic is one such organization. With more than 35 members that comprise over 100 hospitals, the network has members In 2011, Mayo Clinic established the Mayo Clinic across the country and in Mexico and Singapore Care Network, which extends Mayo Clinic’s (see Figure 4). The network was established knowledge and expertise to providers interested to deliver a clinically meaningful relationship in working together to improve the delivery that includes access to the latest Mayo Clinic of health care. The network consists of like- knowledge, helping network members care for minded organizations that share a common their patients while retaining the organization’s commitment to improving the delivery of autonomy.34 There is no cost to patients when health care in their communities through high their doctors consult with Mayo physicians quality, data-driven, evidence-based medical about care.35
Figure 4. Mayo Clinic Care Network Members
Source: Mayo Clinic Care Network website: www.mayoclinic.org/about-mayo-clinic/care-network/members/map. Used with permission.
22 Guide to Health Care Partnerships for Population Health Management and Value-based Care Mayo Clinic Care Network membership is is available on desktop computers or managed on a subscription basis. Member mobile devices 24/7. organizations contract to pay for the clinically »» eTumor Board Conferences. Members based services they use from Mayo Clinic. There can observe and participate in live, is no additional cost to the patient. These clinically interactive video conferences where based services include: Mayo multidisciplinary teams and network members discuss management »» eConsults. Providers within the care of current cancer cases. network can connect electronically with Mayo Clinic specialists and »» Health Care Consulting. Network subspecialists to ask questions about members can consult with Mayo Clinic a patient’s care. The consultation is experts in patient care, human resources, documented in the patient’s medical finance, and other administrative and record. There is no additional cost to operational areas. Members customize the patient. their own consulting plans to support their unique strategic priorities. »» AskMayoExpert. This point-of-care tool gives providers access to Mayo- Beyond gaining clinical expertise, network vetted information, including disease members can enhance their own strong brand management protocols, care guidelines, presence by adding the Mayo Clinic Care treatment recommendations and Network logo and trademark to their marketing reference materials. The information communication as a secondary presence.
Guide to Health Care Partnerships for Population Health Management and Value-based Care 23 PROCESS RECOMMENDED FOR EVALUATING POTENTIAL PARTNERSHIPS
Achieving a best-fit partnership is more critical »» Pre-partnership assessment than ever for hospitals and health systems. and planning The process for achieving such a partnership »» Making and executing the strategic is based on strategic-financial assessment and partnering decision planning. The integration of strategic planning and financial planning involves: Phase 1: Pre-partnership Assessment »» Analyzing the current field and local and Planning Service Area Assessment service area conditions »» Forecasting of changes related to This phase answers questions including: What payment arrangements, demographics is the current state and trajectory of the provider and many other factors field nationally and locally? How well is our organization positioned for the future operating »» Defining the role the organization will environment? What does our future look like as play in its community based on a stand-alone organization without a partner? these factors What are our big-picture strategic options? Strategic financial planning that uses solid Figure 5 shows the four major activities of this data and analytics proactively prepares the first phase. organization to direct its resources to best-fit partnership options. This approach has two major phases:
Figure 5. Pre-partnership Assessment and Planning
State of the Organizational Future baseline Evaluation of eld and position / projections, plan to strategic strategic service competency close gaps, and alternatives area assessment assessment scenario analyses
Source: Kaufman, Hall & Associates, LLC
24 Guide to Health Care Partnerships for Population Health Management and Value-based Care Service Area Assessment »» Unused capacity in the service area As described earlier, the U.S. business model relative to beds and/or specialists for health care is moving away from a sick »» New entrants and/or disruptors, care model to a value-based system focused including private equity-backed on the provision of health care in ambulatory and retail companies and home settings. Service delivery areas are »» State legislation encouraging new transforming at different speeds. Regions may payment and care delivery models be at a low or high stage of evolution toward value-based care, but an increasing pace of All of these elements need not be working at change is likely and presents significant risk the same time to shift a service area rapidly to even the best-prepared organizations. for its providers. In some regions, initiatives by one type of stakeholder may move the needle The organization’s current position in its service significantly (for example, a payer which offers area can be assessed relative to information on a new narrow-network product). In other areas, the pace of change in its service area. Pace of new entrants accelerate the process. A single change is a function of seven factors: level of decision by a physician group, payer or employer organization among hospitals and physicians; can weaken or completely undercut hospital and employer health care benefits structure; health system efforts to gain covered populations enrollment in public exchanges and level of through clinical network development, targeted product and network sophistication; amount of community outreach or other initiatives. vertical collaboration and new-entrant activity; demand for services; supply of providers; and Organizational Position Assessment regulatory environment. To make the significant changes required for the future, hospitals and health systems need to Rapidly moving service areas typically have have as much flexibility as possible. Flexibility characteristics, including: will be built through strengthening existing »» Large organized groups of physicians competencies and developing new competencies and other providers needed under a value model, as described earlier in Sidebar 1. Each of the eight capabilities is »» Penetration of managed care products important, but usually a few require significant and services, including narrow or limited focus in order to establish the organization’s network products value for payers, employers, consumers and »» Relatively high utilization of services and other stakeholders. Key capabilities typically costs of care, on a per-unit and/or total include clinical integration, operational efficiency medical expense basis and quality, and care management infrastructure »» Familiarity with capitated payment, and protocols. including delegated risk models »» Pricing variation across plans For the most part, hospitals are aware of the and products amount of work that needs to be done and
Guide to Health Care Partnerships for Population Health Management and Value-based Care 25 the financial resources required to develop eight critical capabilities, using both qualitative the necessary capabilities. But provider and quantitative data. Each has specific indicators. readiness for value-based care varies widely For example, clinical care management nationwide and leans toward less prepared (see can be assessed based on availability and, Figure 6). The proportion of health systems importantly, the degree of use of protocols that are innovators in linking care quality and and clinical orders sets for high-cost clinical outcomes with financial incentives upstream, procedures and high-incidence/high-impact downstream or across the enterprise will chronic conditions. Financial position can be need to increase. Even organizations most assessed through profitability, liquidity and frequently cited as examples of the best prepared leverage ratios, among others. Based on such indicate that they have significant work to do assessment, the organization’s readiness can for effective positioning. be compared to providers nationwide and to specific organizations in defined service areas. Hospital and health system leadership teams should ensure thorough evaluation of the organization’s current position relative to the
Figure 6. Nine Attributes and Estimate of Organizational Readiness on a National Basis
Tradi-onal Value-‐based = Na-onal Organiza-on Organiza-on
Clinical Siloed Strong Integra-on
Quality and Care LiIle to Robust Management None
Network Development, Configura-on and Limited Robust Relevance
Dept. Enterprise-‐ Opera-onal Efficiency Focused wide
Clinical and Tradi-onal Integrated Business Intelligence
Financial Challenged Strong Posi-on
Purchaser Limited Very Rela-onships Essen-ality Essen-al
Brand Limited/ Strong/ Strength Local Na-onal
Limited Leadership and Deep M.D. and Depth/ Governance Admin/Strong Alignment Alignment
Source: Kaufman, Hall & Associates, LLC © 2014 Kaufman, Hall & Associates, Inc. All rights reserved. 0
26 Guide to Health Care Partnerships for Population Health Management and Value-based Care Development and Testing of Baseline Projections Many hospitals and health systems face significant risk in preparing for performance under a value- Once competency gaps have been identified, based business model. Higher risks typically organizations can do the analytic work needed include volume declines, expense growth, payer to develop a baseline path to close those gaps. rate reductions, and capital expenditures for The baseline includes strategic, geographic, physician practices and practice losses. It is clinical, financial and operational considerations. not unusual for projected baseline financial These considerations enable the organization to performance to have a downward trajectory. assess the implications of “staying the course,” i.e., remaining independent and without the The leadership team of one community hospital assistance of a partner. evaluated such a situation and strategies the organization could use to change the Because past baselines are no longer appropriate, trajectory. The executive team and board were especially those projections related to future not comfortable with the required magnitude utilization, executives should give careful thought and types of changes, and the associated to planning assumptions, including: implementation risks. Leadership wanted to preserve mission-critical services in the »» Service area definition: patient origin, community. Sensitivity analyses were performed demographics and other factors to indicate potential risks of an improvement »» Clinical considerations: physician group plan under different scenarios.36 and staff profiles, programs and service performance, facilities assessment Evaluation of Strategic Options »» Stakeholder environment: payers, hospital providers, ambulatory providers The hospital’s management team and board concluded that achieving the desired performance »» Capital considerations: capital/debt would be unlikely within the context of regional capacity, sources and uses of capital, realities, financial capability and overall desired routine capital expenditures, strategic risk profile if the organization remained capital requirements independent. Partnership arrangements might »» Utilization: inpatient, outpatient, patient help the hospital preserve its mission in the mix, length of stay community and position it to play a future role »» Operating revenue: payment mechanisms in managing population health. (shared risk, bundled, pay-for-performance, capitation, etc.), payment rates (Medicare, The independent option becomes the guidepost Medicaid, commercial, managed care), against which to consider big-picture strategic self-pay net revenue rate, bad debt and alternatives. For example, a small independent charity levels, pricing health system might identify and assess options to: »» Operating expense inflation: pay increases, medical supplies, interest expense and other expenses
Guide to Health Care Partnerships for Population Health Management and Value-based Care 27 1. Remain independent and drive 4. Integrate into a much larger health aggressively to support its vision, system, perhaps one that is geographically possibly incorporating nontraditional contiguous, or a regional or national partnership arrangements, such as best- system, or a for-profit health system practice or purchasing collaboratives 5. Pursue nontraditional and less 2. Position itself, either independently or integrated partnerships (joint ventures, with a for-profit partner, as a regional payer partnerships, etc.) system that could acquire smaller Having ruled out the financial feasibility of #2, facilities needing a partner Figure 7 illustrates this organization’s high-level 3. Partner with another health system analysis of the ability of the other four options that shares its vision, creating a new to meet strategic priorities. As shown in the health system right-hand column, option #4—integrating with a larger system—offered the best potential.
Figure 7. Comparison of Four Strategic Alternatives along Eight Priority Dimensions
Source: Kaufman, Hall & Associates, LLC
28 Guide to Health Care Partnerships for Population Health Management and Value-based Care Sidebar 5. Topics for Guiding Principles for Exploring Strategic Partnerships
1. Mission, vision, values and culture: those arrangements? How will IT What are the critical elements, support the delivery platform? How and is there alignment between will a partnership set priorities and potential partners? timelines for capital initiatives related 2. Community goals: How will a to managing population health? partnership assure service access 6. Physician relationships and and patient satisfaction, handle charity commitments: What are the goals and care, as well as promote and deliver timing expectations related to physician health services to meet emerging employment, recruitment, contracting demographic and service area needs? and governance? 3. Strategic plans for value-based care: 7. Employees: How will a partnership What are the critical elements, and do handle workforce issues, including the initiatives mesh well together? the retention of executives, managers 4. Clinical programs and services, quality and employees? and outcomes, and costs: What are 8. Governance considerations: What the goals and how will partners are the expectations and the desired collaborate to achieve these? How degree of local-level involvement? How will a partnership govern the delivery will a partnership involve trustees in of existing programs and services, setting strategic direction and strategic develop new services, right-size and plans, create operational and capital right-place major service lines, and budgets, and make decisions about the increase the quality of care while range and scope of health services? improving its efficiency? 9. Philanthropic and foundation 5. Contracting arrangements, clinical considerations: What are the specific integration, delivery network, IT and goals? If a new community foundation other considerations: What contracting is to be established, what are the arrangements will be sought, and expectations related to its funding? how will the physician and delivery network be shaped to participate in Source: Kaufman, Hall & Associates, LLC
Guide to Health Care Partnerships for Population Health Management and Value-based Care 29 Figure 8. Making the Strategic Partnering Decision
Establish Execute Identify and Develop guiding Select the right transition/ partnership assess partner principles and partnership integration agreement and options; identify goals/objectives structure structure; ensure implement best-fit partner stakeholder buy-in transition plans
Source: Kaufman, Hall & Associates, LLC
Phase 2: Making and Executing the physician practice management; commitment Strategic Partnering Decision to teaching programs; governance; employees; economies and efficiencies; and financial position. Phase 2 has five key activities (see Figure 8) Sidebar 5 outlines nine topic areas for principles that collectively answer questions including: that the board and senior management team might consider when initiating the strategic »» What are the guiding principles partnership process. and objectives of a partnership? »» What are the partnership options Goals and objectives define the business purposes and how do they compare? of the prospective partners. They also provide the framework for all other steps in the partnering »» Which organization is likely process, including the evaluation of potential the best-fit partner? partners and the selection of the partnership »» What partnership structure would enable structure. Objectives need to be as specific both partners to meet their objectives? as possible so that prospective partners »» How can an organization help to ensure can be evaluated on their ability to meet the timely execution of the partnership identified needs. agreement and a successful transition post-partnership? Goals and objectives can be defined at many levels as the partnership exploration process Principles and Goals to Guide advances, for example: Partnership Exploration »» The 100,000-foot view might be defined The recommended strategic partnering process as, “Position the organization to begins with development by consensus of guiding effectively manage population health principles. With oversight and involvement by in specified communities in a value- the board and senior management team, this based care model while maintaining first step is likely the most important component local autonomy for decisions related to of this phase. Guiding principles define what health care and medical management.” the organization wants to achieve through This might be helpful at the stage when a partnership. an organization is developing guiding principles and overall goals. Every organization will arrive at a different set of guiding principles, but current big-picture »» The 10,000-foot view might be defined categories in which health systems develop as, “The partnership will focus on principles typically include: long-term vision; using each other’s best practices and commitment to partnering organization’s infrastructure through the creation of a community; culture; value-based infrastructure specific affiliation arrangement.” This and capabilities; physician engagement; might be helpful at the stage when the
30 Guide to Health Care Partnerships for Population Health Management and Value-based Care organization is identifying and assessing advice on the development of the best-fit partners. transaction and reports to the full board »» The 100-foot view focuses on the at specific stages in the process business and operational terms of the partnership that will allow the parties Hospitals and health systems should thoughtfully to achieve their objectives. It might be consider the role of the board, management and defined as, “The combined entity will physician leaders, including both independent migrate to one vendor’s IT platform and hospital-employed or contracted physicians. within three years.” This would be Embarking on a thorough leadership and helpful at the stage when the partners governance redesign process is a major are developing a letter of intent, as undertaking for internal stakeholders. Advisers described later in this guide. may be able to guide leaders through a process that has been successful for organizations in »» The ground-floor view defines the various regions nationwide. specific, enforceable legal terms that will govern the partnership in a manner Assessment of Partner Options consistent with the goals and objectives of the parties. This would be helpful In geographies where organizations work closely during development and negotiation of with each other and know each other well, the the definitive agreement. choice of a partner may seem clear. Unless the organization plans to undertake an exclusive Realistic objectives increase the likelihood negotiation process with a single prospective that a partnership will progress smoothly and partner, multiple potential partners generally achieve benefits for both parties. Hospitals and should be identified. These include both obvious other providers cannot expect to structure an candidates in the locale or region and what might arrangement under which they continue operating be considered “outside-the-box” candidates. exactly as they have in the past. Their boards and Depending upon the partnership goals, potential executive teams must be willing to be flexible partners may be in noncontiguous geographies with some aspects of operations, whether it or be a vertical participant, such as a health be strategic planning and direction, operating plan, area employer or retail company. But a and capital budgets, service continuation and realistic rationale for wanting to partner should enhancement, or other considerations. Leadership be apparent for each partner prospect. teams should try to put as much on the table as possible and actively manage expectations Consideration of five or more potential partners throughout the partnering process. as a starting point allows the partner-seeking entity to think broadly. The number of candidates At this early stage, the organization typically then can be narrowed into a competitive field, establishes a structure for exploring a partnership as partnership with each candidate is assessed arrangement. A small group or team of key individually and comparatively. decision makers can speed the exploration and transaction processes and maintain the required The assessment criteria focus on the organization’s confidentiality. The team typically includes: ability to meet the agreed-upon partnership goals and objectives. A side-by-side comparison »» Senior management and financial and of key elements can facilitate objective review legal advisers who manage the day-to- and decision making. The ultimate goal of this day-details stage is to narrow the group of potential partners »» Small task force of board members, to entities that have the greatest likelihood of which measures and tracks performance fulfilling the partnership goals and objectives. against objectives, provides critical
Guide to Health Care Partnerships for Population Health Management and Value-based Care 31 Sidebar 6 outlines the formal steps typically taken by the team or task force during this Sidebar 6. Formal Steps in Getting to stage. These steps depend upon the level the Best-fit Partner of confidentiality. »» Identify and contact potential partners In the final analysis, the key elements for assuring »» Obtain nondisclosure agreements good-fit partnerships include: from each potential partner to assure confidentiality »» Strategic position: The partnership »» Release the confidential descriptive must be able to improve the memorandum, which is the primary organization’s ability to meet core goals, information disclosure document that such as managing population health. formally introduces the partner-seeking »» Operations: The partnering organizations organization to potential partners, must accurately estimate the investment of along with the request for proposal, time and money required to implement which requests answers to questions operational change. posed by the partner-seeking entity »» Execution/Implementation: The »» Meet with potential partners during site partnering organizations must make the visits, tours and question-and-answer changes required to achieve the projections sessions with the management team used to evaluate the partnership. »» Receive, evaluate and clarify partnership »» Cultural compatibility: The organizations indication-of-interest proposals must assure cultural fit. »» Recommend partner short list or exclusive to board and management The importance of culture cannot be task force for go/no-go decision to overemphasized. The top reason cited for nearly next phase (partnership agreement half of partnership terminations is lack of cultural negotiation) compatibility.37 A well-designed partnership exploration process allows for appropriately timed and confidential interaction between key constituents, including boards, management, Source: Kaufman, Hall & Associates, LLC physicians and community leaders, in order to gauge cultural fit.
Figure 9. The Continuum of Strategic Partnership Structures
Increasing Financial Alignment
Increasing Levelof Contractual Joint Full Integration Commitment Relationship Venture/Operations • Affiliations • Sale of Minority Interest • Whole Institution Lease • Corporate Services • Joint Operating • Change of Corporate Support Agreement Member • Shared Clinical/Ancillary • Sale of Majority Interest • Asset Sale/ Acquisition Services • Management Services Agreement • ACO/CIN development
Source: Kaufman, Hall & Associates, LLC
32 Guide to Health Care Partnerships for Population Health Management and Value-based Care Assessment of Partnership Structure »» Joint ventures targeting a specific service or site The structure for a strategic partnership is »» Management and joint operating critically important to achieving expected arrangements, either for discrete service partnership benefits. Structures range from lines or whole hospitals loosely integrated contractual arrangements to fully integrated arrangements, with varying Noncontrol transactions usually involve financial levels of commitment and financial alignment commitments in the form of an investment by possible in many structures (see Figure 9).38 one of the organizations in the other, or in a joint venture entity. The nature of the investment At the most integrated end of the continuum, can take the form of a loan, a membership for example, Baylor Health Care System and interest stake or a contractual right to share in Scott & White Healthcare merged, creating a earnings. Many noncontrol transactions also fully integrated health system called Baylor often include specific clinical and programmatic Scott & White Health. Trinity Health and Catholic commitments by one or both organizations. Health East consolidated as Trinity Health. Noncontrol transactions may be attractive Less fully integrated structures include affiliations, to community health systems because they purchasing and best-practice collaboratives, offer an opportunity to partner with a larger clinically integrated network arrangements, organization to help support programmatic management services agreements and others. needs, while allowing the community health For example, the BJC Collaborative is an system to maintain more control over its assets arrangement that enables multiple health and future than under control transactions. In systems to retain their independence, but to some cases, a noncontrol transaction allows partner with BJC and other organizations to a community health system to get to know increase purchasing efficiencies and share best a larger partner, recognizing that a more practices. Carolinas HealthCare System and Cone integrated transaction between the parties can Health are partnering under a management occur only after further bridges of trust and services agreement. Duke University Health collaboration are built between and proven 39 System and LifePoint Health have a joint venture within the organizations. arrangement called Duke LifePoint to build Choosing the most appropriate partnership a network of hospitals, physicians and structure depends on the objectives of the other providers through acquisitions and partnership. If a principal objective of a shared ownership and governance of smaller hospital is to obtain capital support community hospitals. for infrastructure and development, the most An increasing number of hospital arrangements likely transaction structure would be a merger are noncontrol transactions, in which there with a large organization. If a major objective is no transfer of the majority of a hospital’s is to enhance specific service lines or build a governance control. Some of the more common clinically integrated network, less highly integrated noncontrol transactions include: transaction structures, such as a joint venture or clinical affiliation, may be more appropriate. »» Branding arrangements designed to leverage the name, clinical expertise or Constraints also should be considered. Some physician platform of a health system or structures and agreements have organizational, academic medical center on behalf of an legal or other operating prohibitions that unaffiliated hospital or health system affect how a partner can participate in this or other arrangements.
Guide to Health Care Partnerships for Population Health Management and Value-based Care 33 Figure 10. Transaction/Transition Planning and Execution
Develop Evaluate Define Health Identify Partners/ Letter Conduct Establish Negotiate Conduct Execute Partnership System/ and Assess of Due Integration Definitive Integration Integration Strategy Hospital Prioritize Transaction Intent Diligence Framework Agreement Planning Plans Strategy Partners Structures
Integrated Work Streams Plan
Transaction Development and Execution
Transition Planning and Integration
Source: Kaufman, Hall & Associates, LLC
Transition Planning and Integration Structure »» Strategic planning prior to signing of a letter of intent Hospital management and governance teams »» Transaction development and execution often assume that partnerships occur through through the definitive agreement sequential steps, the first group of steps consisting »» Detailed transition planning and of transaction activities (e.g., identifying a partner, execution, from the letter of intent conducting due diligence, and developing and through complete execution of executing the agreement), followed by the second integration plans group of steps consisting of transition and integration activities (e.g., integration planning This integrated approach is vision-driven and and execution). sponsored by leadership, but accomplished When this to partnering collaboratively within and across the traditional approach 40 and integration processes is applied, it organizations. It emphasizes buy-in while may be driven by the current leadership, and attending to compliance, grows new leaders and may focus primarily on speed and compliance is sustainable over time, with results that last. over organizational buy-in. When this occurs, Transition planning involves many people, and the partnership objectives are less likely to thus for confidentiality reasons is best started be achieved during the integration stage when the partnering organizations are ready and thereafter. to go public with their partnership intent.
In an effective and sustainable integration Execution of Partnership Agreement and process, transaction and transition activities Transition Plans are overlapping, rather than sequential. Figure Before a partnership arrangement is finalized, 10 illustrates the recommended partnership many successful partnerships have a solid life-cycle, with integration work streams often business case or plan that includes financial, proceeding simultaneously and involving: operational, strategic and capital rationale, along with qualitative measures of success, including
34 Guide to Health Care Partnerships for Population Health Management and Value-based Care Figure 11. Elements of a Partnership Business Plan
Strategic Evaluation Financial/Capital Planning • Market assessment • Financial projections • Strategic position analysis • Synergy assessment • High-level facility review • Capital position and • Evaluation of strategic fit capacity • Post-transaction strategic planning • Financial analysis of • Partnership integration the combined entity • Post-transaction financial planning
Transaction Structuring • Transaction planning and timing • Valuation (if appropriate) • Development of marketing Capital Market Implications materials • Debt review and compatibility Stakeholder Support Stakeholder • Partner discussions/ • Capital markets implications, outreach to parties communications and strategy • Key negotiations of business terms • Bridge financing • Definitive agreements and due • Permanent financing diligence • Regulatory approval and closing
Cultural Fit
Source: Kaufman, Hall & Associates, LLC cultural fit and stakeholder buy-in (see Figure ensures a more complete understanding of 11). These elements are critical to internal buy-in the issues, opportunities and risks associated and support, and important for any regulatory with the partnership agreement in advance of process with significant implications for the its execution. Legally binding documents are ability to meet quality, cost and other objectives created to describe the terms of the partnership across both partnering organizations. and the respective rights and obligations of the partnering organizations. Elements of the transaction-execution process for more integrated arrangements (as shown Following execution of the agreement and also in Figure 10), include reviewing and regulatory approval, the partnership process negotiating a letter of intent, conducting due can go into “full implementation mode” based diligence, negotiating and finalizing definitive on the plans developed earlier in transaction agreements, meeting preclosing and regulatory and transition planning. review requirements, and closing. Due diligence
Guide to Health Care Partnerships for Population Health Management and Value-based Care 35 CONCLUDING COMMENTS
Partnerships in health care have accelerated, and reposition for a fee-for-value environment? as participants in the field position themselves Is your organization moving fast enough now for a value-based delivery system. Traditional to develop these partnerships? lines and roles of what were once distinct and separate verticals are now blurring. All types Partnership discussions are complex and of innovative transactions are occurring. multifaceted, often involving a significant amount of time before coming to fruition Providers are showing increased flexibility around through a thoughtful process. As described partnering arrangements. As larger players in this guide, that process includes thorough combine in unique ways, the pace of change pre-partnership assessment and planning, in- in geographic areas will quicken nationwide. depth partner assessment and decision making, How the business of health care is conducted and development and execution of win-win could be redefined in fundamental and dramatic transaction structuring that meets partners’ ways, bringing significant improvements. goals and objectives. Successful partnerships will have in common the elements outlined What partnerships does your organization in Sidebar 7. Forward-thinking health need to establish to be an essential provider systems are taking a proactive approach to in your community going forward, navigate partnership conversations. the population health management agenda
Sidebar 7. General Characteristics of Successful Strategic Partnerships
»» Common vision on direction and »» Strong board and management leadership mission of organization and alignment »» Ability to make difficult decisions upfront of objectives »» Organizational champions »» Clear value proposition and compelling for key initiatives strategic, clinical and business plan that »» Capability to deliver on commitments can be achieved related to resources »» Cultural compatibility, constituency »» Employer and payer support support and implicit trust (boards, (or, at least, lack of opposition) management, medical staff) »» An effective implementation plan »» Governance, corporate and that achieves anticipated synergies management structures that support the implementation plan »» Higher degree of “all in” integration Source: Kaufman, Hall & Associates, LLC
36 Guide to Health Care Partnerships for Population Health Management and Value-based Care ENDNOTES
1. AHA Committee on Research and Committee on Performance Improvement. (2015). Leadership toolkit for redefining the H: Engaging trustees and communities. Accessed at http://www.hpoe.org/resources/hpoehretaha-guides/1787. 2. Health Research & Educational Trust. (2015, August). Approaches to population health in 2015: A national survey of hospitals. Chicago, IL: Health Research & Educational Trust. Accessed at www. hpoe.org/pophealthsurvey. 3. Health Research & Educational Trust. (2014, October). Hospital-based strategies for creating a culture of health. Chicago, IL: Health Research & Educational Trust. Accessed at http://www.hpoe. org/resources/hpoehretaha-guides/1687. 4. For more information on the new model, see Kaufman, K., and Grube, M.E. (2015, Jan. 1). Succeeding in a disruptive healthcare environment. hfm. 5. Health Research & Educational Trust. (2015, August). 6. Health Research & Educational Trust. (2014, October). 7. Kaufman, Hall & Associates, LLC, proprietary partnership transaction database. 8. Health Research & Educational Trust. (2014, October). 9. HealthLeaders Intelligence. (2015, Feb.). The M&A and partnership mega-trend: Deals for growth and survival. HealthLeaders Media. Accessed at https://store.healthleadersmedia.com/the-ma- and-partnership-mega-trend-buying-power-1 10. DaVita HealthCare Partners. (2015, Jan. 30). Centura Health and DaVita HealthCare Partners introduce FullWell. Press Release. Accessed at http://pressreleases.davitahealthcarepartners. com/2015-01-30-Centura-Health-and-DaVita-HealthCare-Partners-Introduce-FullWell 11. Morrissey, W.W. (2014, Dec.). Reconfiguring your delivery network. hfm. 12. For more information, see Grube, M.E., Krishnaswamy, A., Poziemski, J., and York, R.W. (2015, Nov.) Identifying market and network opportunities for population health management. hfm. 13. Greene, J. (2015, Feb. 20). Ascension Health subsidiary to buy Michigan health insurer for $50 million. Crain’s Detroit Business. Accessed at http://www.crainsdetroit.com/article/20150220/ NEWS/150229983/ascension-health-subsidiary-to-buy-michigan-health-insurer-for-50m 14. Kaufman Hall. (2015, Jan. 30). Kaufman Hall facilitates Gundersen Health Plan and Unity Health Insurance partnership exploration. Press Release. Accessed at http://www.kaufmanhall. com/about/news/kaufman-hall-facilitates-gundersen-health-plan-and-unity-health-insurance- partnership-exploration 15. Covington, O. (2015, Feb. 4). Cone Health wants to be your insurer. Triad Business Journal. Accessed at http://www.bizjournals.com/triad/news/2015/02/04/cone-health-wants-to-be-your- insurer.html 16. For more on this subject, see Pizzo, J.J., Bohorquez, C., et. al. (2013, July). Value-based contracting. Health Research & Educational Trust and Kaufman, Hall & Associates, LLC. Accessed at www.hpoe.org/value-contracting
Guide to Health Care Partnerships for Population Health Management and Value-based Care 37 17. Blue Shield of California website: www.blueshieldca.com 18. Kaufman Hall & Associates, LLC, and AtlantiCare. (2016, Jan.). Partnering for population health: The AtlantiCare/Geisinger story. Whitepaper. Accessed at www.kaufmanhall.com 19. For more information, see Blake, J.W., and Finnerty, M.J. (2015, Feb.). The new health companies. Trustee. Accessed at http://www.trusteemag.com/ 20. Ginzenger, B., and Priselac, T.M. (2015, Feb. 11). The Vivity case study: How Anthem converted adversaries into partners. Webinar. Atlantic Information Services. 21. Ginzinger, B., Priselac, T.M. (2015, Feb. 11). 22. Ginzinger, B., Priselac, T.M. (2015, Feb. 11). 23. Vivity website: www.vivityhealth.com 24. Herman, B. (2014, Sept. 17). New Anthem network makes business case for HMO-ACO hybrid. Modern Healthcare. Accessed at http://www.modernhealthcare.com/article/20140917/ NEWS/309179964 25. Tufts Health Plan. (2015, Mar. 4). Tufts Health Plan and Granite Healthcare Network to launch New Hampshire-based health insurance company, Tufts Health Freedom Plan. Press Release. Accessed at www.tuftshealthplan.com/about-us/in-the-news/2015/tufts-health-plan-and-granite- healthcare 26. Granite Health website: www.granitehealth.org 27. Tufts Health Plan (2015, Mar. 4). 28. Trinity Health. (2014, May 7). Health systems announce launch of physician-led Together Health Network. Press Release. Accessed at www.trinity-health.org/body. cfm?id=196&action=detail&ref=44 29. Adapted from Moody’s Investors Service. (2015, Oct. 19). Clinically integrated networks emerging as key to payor negotiations. Sector in-Depth, Global Credit Research. Accessed at https://www. moodys.com/research/Moodys-Clinically-integrated-networks-will-play-decisive-role-in-payor-- PR_336906?WT.=AM~RmluYW56ZW4ubmV0X1JTQl9SYXRpbmdzX05ld3NfTm9fVHJhbnNsYX Rpb25z~20151019_PR_336906 30. U.S. Government Printing Office. (2011, Oct. 28). Statement of antitrust enforcement policy regarding accountable care organizations participating in the Medicare Shared Savings Program. Federal Register (Vol. 76, No. 209). Accessed at https://www.justice.gov/sites/default/files/atr/ legacy/2011/10/20/276458.pdf 31. Federal Trade Commission and the U.S. Department of Justice. (1996, August). Statements of antitrust enforcement policy in health care. Accessed at https://www.justice.gov/atr/statements- antitrust-enforcement-policy-health-care 32. Gish, R.S., and Cyganowski, D.M. (2015, Aug. 17). Management services agreements offer path to efficiency, growth. CFO Forum. Healthcare Financial Management Association. 33. Novant Health. (2014, July). Industry Insights. Accessed at https://www.novanthealth.org/ Portals/92/novant_health/documents/about_us/2014-07_Industry-insights.pdf 34. Mayo Clinic Care Network website: www.mayoclinic.org/about-mayo-clinic/care-network/about
38 Guide to Health Care Partnerships for Population Health Management and Value-based Care 35. Mosaic Life Care website. Mayo Clinic Care Network FAQs: www.mymosaiclifecare.org/General/ Mayo-Clinic-Care-Network/Mayo-Clinic-Care-Network-FAQs/ 36. This topic is covered in depth in Sussman, J., and Kelly, B. (2014, June). Navigating the gap between volume and value: Assessing the financial impact of proposed health care initiatives and reform-related changes. Health Research & Educational Trust and Kaufman, Hall & Associates, LLC. Chicago, IL. Accessed at http://www.hpoe.org/Reports-HPOE/KH_NavGap_Guide. pdf 37. Tocknell, M.D. (2012, Jan.). M&A: Hospitals take control. HealthLeaders Intelligence. 38. For another view of the partnership spectrum, see Health Research & Educational Trust. (2015, August), p. 18. 39. For more on this topic, see Callahan, J., Allen, P., and Wu, S. (2014, Feb.). Independent partners. Trustee. Accessed at http://info.kaufmanhall.com/Article-IndependentPartnersKHA.html 40. Fitz, T.W., Shoger, T., and Kamholz, K.A. (2016, Jan.). Post-merger integration: The board’s role begins before the ink is dry. Great Boards. The American Hospital Association. Accessed at http:// www.greatboards.org/newsletter/2015/post-merger-integration-winter15.pdf
Guide to Health Care Partnerships for Population Health Management and Value-based Care 39 ABOUT KAUFMAN HALL Additionally, Kaufman Hall provides on a single platform sophisticated, integrated and intuitive Kaufman, Hall & Associates provides management software solutions for long-range planning, consulting services, benchmark data and analytics, budgeting, forecasting, reporting, capital and enterprise performance management software planning, profitability, and cost management. that help clients to sustain success in a changing www.kaufmanhall.com. environment. Since 1985, Kaufman Hall has advised boards and executive management teams, enabling them on a self-sufficient basis to ABOUT HPOE incorporate proven methods into their strategic Hospitals in Pursuit of Excellence is the American planning and financial management processes Hospital Association’s strategic platform to and quantify the financial impact of their plans accelerate performance improvement and to consistently achieve their goals. support delivery system transformation in Kaufman Hall helps clients identify and execute the nation’s hospitals and health systems. initiatives that drive strategic and financial HPOE provides education on best practices performance; provides financial advisory through multiple channels; develops evidence- services to clients seeking capital; prepares and based tools and guides; provides leadership implements integrated strategic, financial, and development through fellowships and networks; capital plans; designs comprehensive capital and engages hospitals in national improvement allocation processes; and assists in the evaluation, projects. Working in collaboration with allied structuring and negotiation of partnership and hospital associations and national partners, divestiture opportunities. HPOE synthesizes and disseminates knowledge, shares proven practices and spreads innovation A cloud-based platform of benchmarking and to support care improvement at the local level. analytics empowers clients to improve clinical, www.hpoe.org. financial and other aspects of performance.
40 Guide to Health Care Partnerships for Population Health Management and Value-based Care