Leveraging the Benefits of Rural Network Alliances

Leveraging the Benefits of Rural Network Alliances

Rural Communities

Residents are older, sicker, poorer, more likely to be

uninsured, have higher

healthcare costs

Fiercely independent

Access to healthcare key

to survival

Rural Healthcare

Pursue strategy of local service delivery

High fixed costs/low volume

Current payment systems unravelling

No defined strategy for payment and delivery system reform

Consolidate or Close or . . .?C

ap

ita

l In

ve

stm

en

t

Loss of Control

Minority

Investment

Joint Venture

Management

Agreement

Joint Operating

Agreement

Asset

Purchase/Acquisition

Lease

Merger/

Membership

Substitution

The Third Way

SSOC

Shared Services

Operating Company

CSOC

Care System

Operations Company

Shared Services Operating Company

• Governance structure to support decision-making process

Independent providers form new company

• Group purchasing arrangements

• Combine administrative functions

• Coordinated IT solutions

• Share best practices

Leverage resources and

pursue economies of

scale

SSOC Examples

Stratus Healthcare (Georgia)

Value Care Alliance (Connecticut)

Trivergent Health Alliance (Maryland)

Illinois Rural Community Care Organization

Planned Evolution

Population health

management

Clinical integration

Joint contracting

But What’s Missing?

Still focused on local delivery of care

Not addressing continuum

of care

Still operating

in silos

Triple AimThree Dimensions of Value

•

Sick Care Population

Health

Bringing Value to Healthcare

Provider-Centered

Patient-Centered

Sick Care Population Health

Diagnose and treat

presenting illness or

injury

Address preventive and

chronic care needs of specific

population

Sick Care Population Health

Fee-for-Service Reimbursement

Value-Based Payment Models

Sick Care Population Health

Risk Resides with Payer

Risk Resides with Provider

Sick Care Population Health

ProviderSilos

Systems of Care

Sick Care Population Health

Single provider

treats one patient at a

time

Providers in collaboration

support health of defined population

Silo System

Care System Operations Company

• Extended group with similar interests or concerns who interact and remain in informal contact for mutual assistance or support

Network

• Regularly interacting or interdependent group of items forming a unified whole

System

CSOC Characteristics

• Vehicle for independent providers to form system of care

• Collaborative decision-making through new governance structure– Define population served

– Establish continuum of care

– Define each participant’s role in that continuum

– Identify and secure necessary resources

– Align incentives

– Require accountability

CSOC Survey

University of Iowa Health Alliance

Health Network of Missouri

Kansas Heart and Stroke Collaborative

University of Iowa Health Alliance

University of Iowa Health Alliance • Transition primary care practices to

PCMH model

• Establish evidence-based medicine standards of care

• Pursue programs to determine/address health status of communities

• Develop provider educational programs

• Pursue patient engagement strategies

• Share IT and data analytics costs

• Collaborate in research initiatives

• Position organizations to participate in new payment models

Formed in 2012 among 4

health systems (50 hospitals); provider

network for Iowa/NE CO-

OP

Health Network of Missouri

Academic medical center + 4

community hospitals

2+ years as learning collaborative

Formed new entity in June 2014 to

develop clinically integrated network

Network Compacts

Covenants among all Members

Developed and operationalized by task forces comprised of Member representatives

Specific charges to task forces developed through Steering Committee planning process

Interactive and mutually supportive

Member Contracts

Vehicle for arrangements between less than all Members

Allows Alliance to move expeditiously on matters of interest to individual Member groupings

Network Compact development takes priority, but can pursue Member Contracts at same time

Transparency between Members about work being done under Member Contracts

MD Anderson, Mayo, Cleveland Clinic

• Franchise reputation

– Control vs. collaboration

• Disease specific (cancer, heart)

• Continuum of care?

• Reach out to rural?

Kansas Heart and Stroke Collaborative

University of Kansas Hospital received $12.5 million Health Care Innovation Award

Develop rural clinically integrated network involving AMC, rural tertiary care center, 10

CAHs, FQHC, and providers at all facilities

Focus on regional systems of care for patients at risk of or who have suffered

heart attack or stroke

The Kansas Heart and Stroke Collaborative is a care delivery and payment model to improve rural Kansans’ heart health and stroke outcomes and reduce total cost of

care for that population.

Overarching Strategies

Integration(Teamwork)

Incentives(Rewards forTeamwork + Fieldwork)

Interventions(Fieldwork)

IncentivesRewards for Teamwork & Field Work

• Direct payment for care management services

• Upward payment adjustments for participating rural physicians and mid-level providers

• Disease-specific shared savings program

Transitional payment model

• Build shared analytic infrastructure to identify and evaluate alternatives to cost-based reimbursement to preserve local access to care

Transformational payment model

Commit to Action

• Shared vision

• Balance interests (common vs. individual)

• Committed resources

– Time and energy

– Financial

• Accountability

• Trusting environment

SSOC/CSOC Phases

Strategy Development

• Engage in level-setting education

• Define rationale and objectives

• Determine scope

• Examine feasibility

Partner Assessment

• Develop selection criteria

• Perform SWOT analysis

• Enter into letters of intent

SSOC/CSOC Phases

Establish Terms of Relationship

• Prioritize objectives

• Document rights and responsibilities

Commence/ Maintain Relationship

• Strategic and operational planning

• Secure IT infrastructure

• Develop timelines and link resources

• Identify performance measures

SSOC/CSOC Phases

Pursue New Opportunities

• Joint contracting

• Relationships with other networks

Exit Strategy

• Specify triggers

• Determine procedures to wind down alliance

How Structure Facilitates Organization’s Function

Provides structured environment for

discussion and decision

Promotes trust and transparency

Balances power among diverse

participants

Protects individual rights and concerns

Facilitates joint decision-making in a

safe environment

Key Elements of an Effective Structure

Balanced time/energy/economic investments by participants

Balanced voting rights/reserved powers for participants

Shared vision and goals while recognizing “sacred cows” to be protected

Formal but flexible and adaptable rules of operation

Provides fair opportunity for participants to engage and be heard

Allows for organizational change/growth to address evolution of function

Pershing Yoakley & Associates, PC9900 W. 109th Street, Suite 130

Overland Park, KS 66210913.232.5145

Jeff Ellisjellis@pyapc.com

Martie Rossmross@pyapc.com