Network development and regional integration
This is an excerpt from the January 2013 edition of Perspectives, an electronic newsletter from Harold L. Paz, M.D., chief executive officer, Penn State Hershey Medical Center, senior vice president for health affairs, Penn State, and dean, Penn State College of Medicine.
In recent years, the American health care system has experienced dramatic change and restructuring. One of the more noticeable changes — one which is quite evident here in central Pennsylvania — is a growing trend toward the formation of large, integrated health systems. Many different factors are driving this trend, including health care reform legislation, other changes in how health care is paid for, economic factors affecting the financial performance of hospitals and providers, and a growing focus on the need to improve the safety and quality of care. As we look to the future, even more dramatic restructuring lies ahead, and Penn State Hershey must be prepared for a future in which larger and well-integrated health systems are the norm.
We have already made great strides toward developing a more integrated approach to care, through the growth of the Penn State Hershey Health System that expands our network of affiliations and partnerships. In the future, we will need to focus even more heavily on growing our network, not only in order to remain financially strong, but also to better serve the health and well-being of our patients and our region. Our announcement last month of a new agreement with Holy Spirit Health System to provide cardiovascular surgery services is just the most recent example of how we are working in collaboration with other health care organizations to expand access to expert care and the resources of our academic health center, while at the same time making it easier for more patients to receive this care as close to home as possible. Agreements like our new cardiovascular partnership with Holy Spirit offer opportunities to improve patient care while at the same time increasing efficiency and controlling costs.
Before looking at some of the other ways in which Penn State Hershey is developing its network, it’s worth taking a closer look at the trend toward more integrated systems. America’s current health system is expensive and often inefficient, in part because health care is fragmented, resulting in delays in care, duplicated tests, and other inefficiencies. Hospitals and clinicians are still largely reimbursed on a fee-for-service or utilization basis; in other words, we are paid more for doing more to treat people once they are sick. In an outcome-driven, value-based system, we will be paid to keep the population we serve healthy. Health care reform is driving this transition, particularly by encouraging the formation of Accountable Care Organizations (ACO), which will provide care for a population of patients and be reimbursed on the basis of keeping their patient population as healthy as possible, improving health outcomes and health care quality, reducing costs, and enhancing access. Integration is the defining characteristic of ACOs and similar networks or health systems; these systems will include community, specialty, and tertiary/quaternary care hospitals, primary care and specialist physician practices, urgent care sites, home health, and long-term care.