An alliance between hospitals and doctors in central and southern Georgia may be an indication of big changes to come in the nation's healthcare system.
Hospital leaders unveiled a plan last Tuesday to pool their resources, forming one of the largest health collaboratives in the country. While the mission of Stratus Healthcare is multifaceted, an immediate goal is to help its 23 hospital members and 1500 physicians prepare for changes under the new national healthcare law.
Ninfa Saunders, CEO of Central Georgia Health System, said though initial steps will be modest, the collaborative is getting ready for a gradual move away from fee for service to fee for value — a system in which insurers reimburse provides based on healthcare outcomes instead of services.
The migration to that new system is a step in the right direction, said Dr. Fady Wanna, chief medical officer at The Medical Center of Central Georgia in Macon. He said he sees it as part of the solution to reducing a lot of the waste in the current system.
“If you had a test that was done about six months ago let’s say, in a neighboring town, and you step in our hospital it would take an act of Congress to get (those) tests results mailed to us in an appropriate time,” he said.
For that reason tests are often repeated, he said. However, by grouping together, Stratus Healthcare aims to avoid that kind of duplication.
In the future, providers might not be paid on the basis of how many tests they give a patient, but how healthy they keep that patient, he added.
“If you have less complications in terms of pneumonia in your intensive care, you get paid better than the people who have higher rates of complications,” he said.
Saunders said the entire industry is moving in the direction of fee for value, in part because of the Affordable Care Act.
“If you look at what healthcare reform is really focusing on, they're looking at quality metrics,” Saunders said. “We are not getting paid for readmission. A patient that is discharged from a hospital who is brought back and readmitted to the hospital within 30 days we will not get paid for.”
Under the current fee for service system, Saunders’ hospital gets paid even if they duplicate tests. In other words, fee for service works in their favor.
“The key is timing, if you pull the trigger too fast then you will end up losing the revenue associated with that,” Saunders said. She added that the initial goal is to “maximize fee for service while preparing for fee for value,” so some of the changes will be concurrent.
For now, Saunders said it is in the interest of all the hospitals in Stratus Healthcare to prepare for the future. The first few steps will be small, for example, group purchasing.
“If we were thinking of buying a particular equipment could we start talking together (about) buying one for both.”
The healthcare collaborative may be new to this part of Georgia, but it is part of a broader trend.
“We in Massachusetts are seeing it. It’s happening all over the country,” said Stuart Altman, professor of health policy at Brandeis University, located just outside Boston. Fee for value is the future of industry, he said.
“It’s not so much the Affordable Care Act,” Altman said. “You’re going to see Medicare move in that direction (and) Medicaid programs are moving in that direction. They are responding to the changes in the marketplace.”
But when hospitals join forces, Altman said there comes the temptation to act like a monopoly.
“If this collaboration does not focus on just consolidation and using market power to generate higher prices, but really focuses on the positives of a much more coordinated delivery system, then I think it has the potential to do some real good,” Altman said.
Making a positive impact is one reason the collaborative exits, Wanna said. It isn’t just about cutting waste and saving money, patients will benefit too.
“There’s a lot that comes from this collaboration that is putting patient first and outcome and quality first,” he said.
All 23 hospitals in the collaborative will maintain their independence while sharing a system of resources and coordinated care, officials said.