CE: Elements of integrated delivery systems

February 1, 2003

Pharmaceutical Representative

February 2003 CE.

Learning Objectives

* Identify the key elements of integrated delivery systems.

* Explain the main characteristics of disease management programs.

* Describe the major cost-containment strategies used by integrated delivery systems.

* Identify the most common models of integrated delivery systems.

* Explain the primary goals of information technology within integrated delivery systems.

This second article in a three-part series focuses on integrated delivery systems (IDSs) and discusses the elements of integrated delivery systems, disease management programs, cost-containment strategies, IDS models and information systems.

J. Lyle Bootman, Ph.D., dean, College of Pharmacy, professor of pharmacy, medicine and public health, executive director of the Center for Health Outcomes and PharmacoEconomic (HOPE) Research, Arizona Health Sciences Center, The University of Arizona, Tucson, AZ; and Mark Callahan, M.D., director of outcomes research, New York Presbyterian Healthcare Network, assistant professor of medicine, Graduate School of Medical Sciences, Weill Medical College of Cornell University, New York, served as consultants for this article for the Certified Medical Representatives Institute Inc.

An integrated delivery system may be defined as the banding together of healthcare providers (e.g., physicians, hospitals, mental health centers, nursing homes and home care providers) as a means to coordinate patient care, strengthen or broaden the range of services, expand geographic coverage, and compete more successfully for managed care contracts. As a result of this linkage, IDSs anticipate greater economies of scale, cost-effective allocation of clinical resources, enhanced ability to influence provider behavior and greater negotiating strength.

Elements of IDSs

Integrated delivery systems may range from a simple grouping of physician practices to more complex alliances involving several different types of providers.

The following are key elements of IDSs:

* Comprehensive healthcare services -- a continuum of "cradle-to-grave" healthcare, ranging from prevention and primary care through a full spectrum of tertiary care services.

* Disease management --a method of healthcare delivery focusing on the overall, long-term health outcome of each patient.

* Broad geographic coverage -- the distribution of staff and facilities over a large area in order to serve large regional populations.

* Shared risks and incentives among providers -- an approach whereby the financial interests of all providers are served by minimizing healthcare utilization while maximizing long-term health.

* Physician leadership -- the involvement of physicians in forging alliances and in expanding them to meet the needs and requirements of market forces.

* Advanced information systems to coordinate patient care -- systems that facilitate maximal coordination of all provider information needs.

* Capitation-based contracts -- risk-based financial relationships with payers, in which the IDS delivers all necessary healthcare services in exchange for prepaid, per-member, per-month rates.

* Continuous quality improvement (CQI) -- a strategy to define, monitor and improve quality throughout the system, including both clinical operations and basic service processes, with the goal of enhancing the caliber of medical care while minimizing waste.

* Common ownership and management structure -- a philosophy allowing for all key constituents (e.g., nurses, pharmacists) to be represented at the management level.

Some IDSs are also integrating their own insurance products (health plans) into their healthcare systems by enrolling and insuring their own subscribers. These entities are known as accountable health partnerships, or AHPs.

Disease management programs

Disease management programs look to the larger outcome picture for each patient. The main characteristics of disease management programs include:

A focus on population demographics. Patients are categorized into clinically significant groups, such as those with chronic conditions. Findings are ranked according to the prevalence of these populations among enrollees.

Most disease management programs focus on chronic conditions (e.g., asthma, AIDS, diabetes and hypertension) and preventive measures (such as mammography and smoking cessation programs). Chronic conditions affect almost half of the U.S. population, and are the leading cause of illness, disability and death. Patients with one chronic condition consume more than twice the number of healthcare dollars that patients with acute conditions consume. Patients with two or more chronic conditions spend six times as much.

These statistics reflect the financial impact of chronic conditions on IDSs and underscore the magnitude of the potential savings that may be realized by implementing disease management programs. The following example illustrates the effectiveness of disease management in decreasing chronic heart disease in the member population of one IDS. This IDS implemented practice guidelines that its integrated providers used to manage every element of patient care. The program also utilized information systems to identify patients at risk, track patient progress and pharmaceutical use, link providers, and generate reminder notices for cholesterol checks. In 2001, the IDS reported that between 1990 and 1998, there was a significant decline in deaths from heart disease among plan members.

Clinical practice guidelines. These tools summarize and provide a consensus of available information, and make recommendations about criteria to be used in diagnosis and treatment. These guidelines help healthcare providers follow optimal treatment plans, thereby increasing the efficiency of their services. Increasingly, payers (e.g., employee benefit managers) are asking healthcare providers to document their practice choices and outcomes and to demonstrate that they have mechanisms for improvement. Clinical practice guidelines offer physicians and healthcare institutions a way to justify their decisions.

To assist healthcare decision makers, the Agency for Healthcare Research and Quality has created a network of evidence-based practice centers (EPCs). The EPCs produce evidence reports on selected topics, which can be used to develop guidelines, performance measures, educational materials and other quality improvement programs.

Implementation techniques. Managed care organizations are employing implementation techniques such as physician and patient education programs to ensure that participating providers follow clinical practice guidelines in their daily decision-making and that patients comply with their recommended therapies. Physicians are educated through seminars, dissemination of guidelines via computer, and discussions with pharmacists. Managed care organizations may provide patient education through telephone advice systems, periodic newsletters, classroom sessions and videos. Case managers, nurses, pharmacists and dietitians also have an important role in educating patients and monitoring their compliance with therapy.

Patient data monitoring. In order to monitor effects of clinical practice guidelines and perform outcomes assessments, accurate and complete patient data must be gathered and maintained. Ideally, a data monitoring system would be linked with electronically accessed clinical practice guidelines. Physicians would use the same system to record the patient's course of treatment, to order lab tests and prescriptions, and to refer patients to specialists, hospitals, clinics and nursing homes. Data from the results of interventions and discharge summaries would be entered in the same system. Patient outcomes data may also come from patient questionnaires, filled out after they receive a certain service or treatment. Pharmacy claim databases, provided by pharmacy benefit management companies, also play an important role in disease management programs.

Outcomes assessment. This proactive approach identifies which treatment methods are most effective in reducing patient symptoms or producing cures. Investigators in this field have proposed a system for assessing the value of a treatment alternative using multiple variables:

* Clinical (looking at medical events that occur as a result of disease or treatment).

* Economic (measuring the direct, indirect and intangible costs of treatment).

* Humanistic (considering the impact of disease or treatment on a patient's health-related quality of life).

Cost-containment strategies used by IDSs

The move to integrate is fundamentally a move to contain costs. Integrated delivery systems employ several strategies to control expenditures. These include:

Capitation-induced incentive systems. Healthcare services provided by IDSs are compensated at the same capitated rate, no matter the amount of services delivered. Therefore, it is in the best interests of all healthcare providers to keep their patients as healthy as possible in order to reduce their utilization of healthcare resources.

Focus on prevention and primary healthcare. In order to proactively address healthcare costs, IDSs are focusing on preventing illnesses. One aspect of this strategy is their emphasis on disease prevention, screening programs, early detection and the provision of comprehensive primary care. The primary care physician serves an important role as a gatekeeper, helping to manage the flow of referrals to more expensive specialists and services. Integrated delivery systems are increasingly employing regional satellite facilities to extend the reach of their disease management services.

Market sensitivity. The ability to accurately respond to market conditions is characteristic of successful IDSs. In order to thrive, they must adapt their growth strategies to their competitive environment and to the needs and demographics of their subscriber populations.

Continuous quality improvement. Integrated delivery systems use this strategy as a way to proactively deliver services faster, better and at reduced cost. For large provider systems, CQI has become an especially critical issue in recent years, given a growing trend toward provider quality surveys by outside payer organizations.

Outcomes research and clinical practice guidelines. These elements of disease management support cost-containment efforts by identifying the most effective treatment methods, increasing physician accountability, and minimizing waste and unexplained variation in healthcare delivery.

Integrated delivery system models

Managed care remains in a state of rapid transition and reorganization, with multiple models arising and competing. The following are brief definitions of the most common models:

* Group practice alliance -- a physician group that shares administrative services and costs.

* Consolidated medical group -- a group of physicians who combine their resources, including their facilities.

* Physician-hospital organization (PHO) -- an affiliation between physicians and hospitals that commits both to payer contracts.

* Management services organization (MSO) -- an independent legal entity designed to assist physician groups in managing the business aspects of their practices.

* Medical foundation -- an arrangement that brings together three provider groups: the foundation itself, the physician group(s) and the affiliated hospital(s).

* Staff-model -- an organization that employs physicians directly and includes at least a hospital, as well as other ancillary services.

* Physician ownership -- a model in which a group of physicians owns at least 51%; the group either owns a hospital or contracts with a hospital.

* Fully integrated -- a system that incorporates hospital(s), physician group(s) and a health plan (e.g., an HMO), thus becoming in effect both healthcare provider and insurer.

Information systems

Comprehensive clinical information systems (CISs) are a necessity for today's IDSs. The primary goals of these integrated information networks are to:

* Provide system-wide cost efficiencies by sharing information among providers.

* Link together all IDS provider entities, providing "seamless" access at any point of delivery.

* Provide timely and relevant medical information, including outcomes data and clinical practice guidelines, to help encourage "best-practice" medical care throughout the system and to improve the quality of healthcare.

Some of the complex functions handled by CISs include: physician contracting, membership enrollment and demographic information, utilization review, quality assessment, capitation rate analysis, billing, patient satisfaction surveys, and benefits management.

Community health information networks (CHINs) link local healthcare providers with dominant regional payers. They are a source of information, rather than providing administrative functions for any one IDS.

Patient confidentiality is a significant issue that has arisen with the growth of information technology. Because patient data are shared among various healthcare providers, guidelines and policies to protect the privacy of these data must be implemented according to federal regulations. The Department of Health and Human Services formulated a privacy rule, which took effect in 2001. This rule guarantees patients' rights and provides protection against unauthorized disclosure of their health records.

The Internet has grown tremendously as a method of information delivery, offering providers expanded access to medical information, including decision support systems and treatment guidelines.

 

Article Summary

* An integrated delivery system (IDS) bands together healthcare providers (e.g., physicians, hospitals, mental health centers, nursing homes and home care providers) as a means to:

- Coordinate patient care.

- Strengthen or broaden the range of services.

- Expand geographic coverage.

- Compete more successfully for managed care contracts.

* The following are key elements of IDSs:

- Comprehensive healthcare.

- Orientation toward disease management.

- Broad geographic coverage.

- Shared risks and incentives among providers.

- Physician leadership.

- Advanced information systems to coordinate patient care.

- Capitation-based contracts.

- Continuous quality improvement.

- Common ownership and management structure.

* Disease management programs focus on all aspects of preventive and therapeutic care, with an emphasis on chronic conditions.

* Cost-containment strategies used by IDSs include:

- Capitation-induced incentive systems.

- Focus on prevention and primary healthcare.

- Market sensitivity.

- Continuous quality improvement.

- Outcomes research and clinical practice guidelines.

* The following are the most common IDS models:

- Group practice alliance.

- Consolidated medical group.

- Physician-hospital organization.

- Management services organization.

- Medical foundation.

- Staff-model.

- Physician ownership.

- Fully integrated.

* Comprehensive clinical information systems serve complex functions for IDSs. The primary goals of these integrated information networks are to:

- Share information among providers.

- Provide "seamless" access to all IDS provider entities at any point of delivery.

- Provide timely and relevant medical information.

* Patient confidentiality and the increasing use of the Internet are two significant issues that have arisen with the growth of information technology.

© 2003 The Certified Medical Representatives Institute Inc., Roanoke, VA 24018. All rights reserved. No part of this article may be reproduced by any method or in any form without written permission from the CMR Institute. Reprints of this article are available from the CMR Institute. Request Continuing Education article MH-2.