Public-Private Partnership for an Integrated System of Pediatric Care: The Best Alternative for Hospitals in a Region with Changing Public Policy and Demand for Healthcare Services
Cecilia Meijer Student Number: 10615571 Master of Business Administration (MBA) Thesis Final Submission: March 19, 2015 Supervised by: Prof. Dr. J. Strikwerda
Executive Summary
*Please note: For the purposes of this study, at the request of the organization, the hospital names have been removed in order to maintain anonymity given that this is a current negotiation taking place. Hospital names have been replaced with Hospital A, Hospital B, C and D. Hospital A is currently the sole requester of an assessment to explore the potential Public-Private Partnership, all other organizations have not been consulted related to this assessment as this is an initial inquiry to assess if this is a viable option to be proposed to the State.
South Florida’s pediatric system of care demands an innovative solution in the face of challenging environmental drivers. Florida’s health system is currently ranked 47th in the country when it comes to pediatrics. Historical and recent initiatives, grappling with challenging environmental drivers, have not been sufficient enough to move the needle and place the state in a better place related to pediatrics nationwide. As a result, this paper aims to assess the use of a Public-Private Partnership (PPP) as the most innovative alternative to manage the pediatric care solutions in the South Florida region in an integrated manner. By assessing the current state of pediatric care in South Florida as well as the economic and public health drivers, the findings support the implementation of a PPP model in order to ensure efficiency in a currently inefficient model of healthcare delivery. The proposed PPP model by the requesting facility, Hospital A, will allow for the South Florida pediatric market to operate efficiently and maximize economic and human resources. Hospital A continues to emerge as a leader through a proven track record in quality, technology and innovation. Hospital A is committed to delivering integrated care across the region to provide value to the community and world-class care to the children in their region and beyond. As the current leading provider in the region, Hospital A offers to coordinate pediatric services in the South Florida region with the goal of establishing an integrated delivery system. This document will provide a deeper insight into Hospital A’s proposed PPP with public providers Hospital B, C and D by managing their pediatric service lines and why it is the best option when considering how to provide the best possible care to the pediatric population of South Florida.
Table of Contents
I. Introduction ... 4
II. Background ... 6
III. Research Framework ... 13
i. Statement of the Research Problem ... 13
ii. Purpose of the Company Project ... 14
iii. Project Methodology ... 15
IV. Literature Review ... 17
i. PPP Model ... 18
ii. Impacts of the Implementation of Integrated Care Across the US ... 23
iii. Value Based Healthcare Delivery ... 28
V. Current State Assessment ... 35
i. Demand ... 37
ii. Utilization ... 38
iii. Redundancy ... 39
iv. Benchmark Comparison ... 39
v. Stakeholder Analysis ... 40
vi. Potential Implementation Risks ... 44
VI. Public-Private Partnership Recommendation ... 45
i. Proposed PPP Operational Design ... 47
ii. Economies of Scale ... 48
iv. Service Line Regionalization ... 52
v. Efficiency Model ... 54
vi. Regional Model ... 54
vii. Essential Services ... 54
viii. Financial Impact ... 55
ix. Current State Patient Care Expenses ... 56
x. Regionalized PPP Patient Care Expenses ... 56
xi. Governance Structure ... 60
VII. Considerations in Implementing a Public-Private Partnership ... 62
VIII. Discussion ... 64
i. Quality of Care for Children is Jeopardized ... 64
ii. Unnecessary Utilization Occurs ... 64
iii. Duplication Fuels Costs ... 65
iv. Access is Endangered... 65
IX. Conclusion ... 66
X. Annexes ... 67
Annex 1. Market Assessment ... 67
Annex 2. Pediatric Population Growth to 2022 ... 68
I. Introduction
In the past private and public healthcare sectors operated independently of each other in the United States (US). The perception was that private healthcare was accessible only by the wealthy while the public sector provided healthcare to the poor and were riddle with debt as a result. With the changing economic climate in the US it has becoming increasingly common for partnerships to form between the two sectors. The private sector is quite impacted by the government through regulation, laws and funding. On the other hand, the public sector has become quite dependent on the private sector and the advances it has made in pharmaceuticals and medical technology. PPP’s in the healthcare industry are becoming increasingly more popular and are being utilized by leading healthcare providers in the US.
South Florida’s pediatric system of care demands an innovative solution in the face of challenging environmental drivers. Florida’s health system is currently ranked 47th in the country when it comes to pediatrics. Historical and recent initiatives, grappling with challenging environmental drivers, economic and public health related, have not been sufficient to transition Florida into a better standing nationwide when compared to other pediatric systems. Economic drivers include a $1.7 billion budget deficit, a $20.3 billion Medicaid expenditure that is growing at a 5% Compounded Annual Growth Rate (CAGR), and the Hospital District Commission recommending the de-coupling of tax financing from county facilities. Public health drivers include the fragmentation of the market between providers and an overly concentrated pediatric healthcare system inhibiting economies of scale, high pediatric inpatient use rates signifying a break in the coordination of care, and redundancy in costly pediatric service lines. In addition, the Hospital District Commission is recommending that the “money follows the patient”, in other words instead of the money only going to a single provider all of the hospitals and providers in the taxing district would be eligible to share in the reimbursement dollars. Given these environmental factors it is imperative that the pediatric community assesses ways in which they can alleviate the impact and still continue to provide premier care to the community.
Healthcare delivery services all over the world involve some kind of Public-Private Partnership (PPP) and the US is no exception. In general a PPP is a ‘business relationship between a private sector organization and a government agency for the purpose of completing a project that will serve the public.’ (Investopedia, 2014) In the healthcare sector, a PPP is viewed as often viewed as a ‘long-term contract (usually 15-30 years) between a public sector authority
and one or more private sector company operating as a legal entity.’ (Wikipedia, 2014) By getting involved in a PPP, a healthcare organization can utilize the purchasing power of a government entity in turn allowing the private entity to be innovative and deliver the agreed upon services outlined in the contract. With this type of partnership the private sector would be the one who is paid for their services and also assumes the majority of the financial and operational risk but at the same time can also partake in the reward that comes along by sharing cost savings. Historically, PPPs are generally used to fund healthcare infrastructures; most recently the PPP structure is being utilized to help solve the challenges faced in the delivery of healthcare services. PPPs are transitioning from solely funding the infrastructure of care into the overall management of care delivery in order to reap the benefits of the reduction of overall healthcare costs. Given this transition, the private sector can see the value of the large market available to them. The Centers for Medicare and Medicaid Services (CMS) estimates that between 2015 and 2023 healthcare spending will grow by 6% per year primarily due to the continued implementation of the Affordable Care Act (ACA). By 2023 health expenditures financed by the federal, state and local governments it is projected that it will make up 48% of national spending and is expected to reach $2.5 trillion; while total health spending is projected to be 19.3% of the GDP by 2023, an increase from 17.2% in 2012. (Centers for Medicare and Medicaid Services, 2013) The projected spending will be on infrastructure and non-infrastructure initiatives, however, it is estimated that the majority of the spending will be on non-infrastructure therefore making it the more attractive ventures to focus on.
As a result of the larger markets open to private organizations through PPPs, Hospital A is exploring the possibility of developing a PPP with Florida state and three other public hospitals that provide pediatric services in the area at this given time. Throughout this paper, Hospital A will address the statement whether or not a PPP for an integrated system of pediatric care is the best alternative for hospitals in a region with changing public policy and demand for healthcare services. Hospital A acknowledges that in order to fulfill their commitment, they will need to consider acting as a regional coordinator for pediatrics and whether financing a project utilizing a PPP structure is one of the only ways in which they can provide care on a larger scale than they currently have and if it provides the opportunity to strengthen their health services.
The thesis will consist of an overview of the methodology utilized to conduct the assessment and arrive at a recommended conclusion. In addition, the thesis will provide and
introduction to PPP’s and the current state of the pediatric healthcare system in South Florida. In support of the overview provided and to support a recommendation, a thorough literature review will be addressed upon which the recommendations were based. Following, will be an overview of the recommendation related to the PPP proposal as well as expected benefits that the South Florida region will experience should they choose to implement the proposed PPP model.
II. Background
The US healthcare system is undergoing a number of constraints that are impacting growth, value delivery, outcomes and financial gain. These are a direct result of the major issues identified in healthcare reform which are health insurance and access, standards for coverage and the structure of healthcare delivery; this assessment will focus on the structure of healthcare delivery and what type of model would be most beneficial. In Porter’s presentation “Redefining Health Care: Creating Value-Based Competition on Results” he states a number of paradoxes of US healthcare (Figure I) that are currently impacting value based competition. These paradoxes create a zero-sum competition in which there is competition to shift costs, increase bargaining power, capture patients and restrict choice, and restrict services to reduce costs; all of which do not increase value for patients. (Porter, 2006) By eliminating competition amongst organizations and possibly working together to deliver care by implementing a new model of care delivery, organizations will see positive results in the short and long term.
Figure I. Paradoxes of US Healthcare • Costs are high and rising.
• Services are restricted and fall well short of recommended care. • Overuse of care.
• Standards of care often lag and fail to follow accepted benchmarks. • Diagnosis and preventable treatment errors are common.
• Huge quality and cost differences persist across providers and geographic areas. • Best practices are slow to spread.
• Innovation is resisted. Source: Porter, 2006
Healthcare constraints are a national phenomena and the State of Florida is no exception to the impacts that are occurring. The State of Florida has an over stressed healthcare system and it is not only taking a toll on the state financially but on its constituents as well. As a result of the financial burdens being felt by the State of Florida, government is poised to take aggressive
cost-cutting measures to its Medicaid program while ensuring quality and access to its pediatric population. Florida faces significant financial challenges entering into 2015; recent analyses estimate the State’s FY15 budget deficit at approximately $1.7 billion. Under the current Medicaid program, the State’s 2014-2015 expenditures are estimated at approximately $23.6 billion. This places Florida among the top ten of all states in terms of total Medicaid expenditures; Florida’s Medicaid program covers approximately 3.4 million individuals, of which over half of the recipients are children and adolescents 20 years of age or younger. (Centers for Medicare and Medicaid Services, 2014) Figure II below illustrates the growth of Medicaid in the state of Florida over the last 20 years, as illustrated spending has been growing at an exponential rate over time, growth has been occurring at a 5% compounded annual growth historically. Currently, the State is considering a proposal to reduce Medicaid spending by 4.6%, or $1.8 billion. This cut would likely materialize primarily through reductions to the reimbursement rates paid to the State’s hospitals.
Figure II. Florida - Growth in Medicaid Expenditures ($ in millions)
Source: AHCA, Medicaid Services’ Budget Forecasting System Reports
While children comprise a majority of the Medicaid population, they comprise only 31% of the program’s costs. (Medicaid Services’ Budget Forecasting System Reports) As a result of the number of children that utilize Medicaid services, there is significant risk that cuts to the Medicaid budget will exacerbate the financial condition of many of the State’s pediatric programs. Typically, Medicaid is the primary payer for pediatric services and, as such, pediatric programs are highly sensitive to changes to the Medicaid reimbursement rates. Other financing mechanisms for indigent care, such as the State’s Hospital Districts’ taxing authority and facility financing, have also come under scrutiny.
In addition to the potential cuts in the Medicaid budget, Governor Rick Scott issued Executive Order 11-63 on March 23, 2011 forming a commission to assess and make recommendations on the role of Florida’s Taxpayer Funded Hospital Districts in delivering care to low income and under-served populations. The Executive Order made the following observations:
• Some Hospital Districts have the authority to levy taxes and use these revenues to subsidize government-operated hospitals. There is a need to review the contribution made by these facilities in terms of cost, quality, and access as compared to their non-subsidized peers.
• The Administration’s intent is to “develop a more rational approach to compensating hospitals with a higher degree of predictability and fairness, and which does not incentivize inefficiency, higher cost, or irrational business practices.”
• The Commission on Review of Taxpayer Funded Hospital Districts (The Commission) was specifically asked to determine the “most effective model for enhancing healthcare access for the poor.”
The Commission returned its report to the Governor on December 30, 2011, which concluded that the state needs to decouple funds from the associated facilities, the state should focus on providing high quality indigent care as well as caring for patients in the lowest cost settings possible. Figure III highlights a selection of the report’s findings that led to the conclusions put forth by The Commission.
Figure III. Findings from the Report of the Commission on Review of Taxpayer Funded Hospital Districts
• Special hospital districts should become indigent healthcare districts, funding indigent healthcare based on local priorities and not limited to hospitals owned or operated by the district.
• Special hospital districts should not limit themselves to providing tax funds to hospitals. Indigent care funding models that are based on a “money follows the patient” system provide a more equitable distribution of funds for indigent care…
• …both local bills and general laws are the most effective way to enact reforms such as the transition from a hospital district to an indigent care district.
• With any change of ownership or governance, the Commission recommends that Hospital District (oversight authorities) should… (c) require the maintenance and/or expansion of community health programs, with an emphasis on primary care and emergency room diversion.
Under a shifting economic and political landscape, pediatric providers in Florida can no longer afford a wait-and-see approach. Many of the State’s pediatric departments and freestanding children’s hospitals are operating under tight financial constraints that threaten to worsen in the coming years. A confluence of factors are bearing down on pediatric providers and, without a coordinated response, the existing levels of access and quality may be at risk. Figure IV illustrates the current pediatric system of care for South Florida and some of the factors currently influencing pediatric care.
Figure IV. Existing Pediatric System of Care for South Florida
The Children Health Corporation of America (CHCA) published the 2011 Pediatric Accountable Care and Payment Reform whitepaper in which they conducted an assessment of Medicaid impacts that will be felt by the state and there is an evident downward pressure on financial performance of children’s hospitals and pediatric service lines. The first of which are the proposed Medicaid budget cuts. Medicaid covers approximately 30% of all the children in the United States (US) and accounted for 51% of gross patient revenue to children’s hospitals in 2010, Medicaid reimbursed an average of 70-80% of the cost of care provided. Due to the combined high-volume and low-reimbursement nature of Medicaid reimbursement, children’s hospitals are vulnerable to the Affordable Care Act’s (ACA) expansion of Medicaid eligibility that took effect in 2014. The second downward pressure identified relates to managed care contracting. Under HB 7107, Florida sought to enroll a large portion of its Medicaid beneficiaries into managed care plans. With this increased enrollment, the negotiating leverage of the private payers increases and children’s hospitals may find themselves accepting pricing
Florida State Children / Community
Fragmentation
Redundancy of Services State Budget Deficit
Medicaid Expenditure Growth Taxing Districts
Demand for High Quality Environmental
Drivers
Existing Pediatric System of Care For South Florida
concessions with little or no choice. Pricing concessions may include alternative reimbursement models such as value-based purchasing or risk-sharing arrangements. The third downward pressure relates to at-risk federal funding. Other funding resources that help subsidize the lower reimbursement rates at children’s hospitals are at risk, including the Children’s Hospital Graduate Medical Education (CHGME) program that provides support to free-standing children’s hospitals. Grant funding programs that commonly provide support for initiatives at children’s hospitals such as the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), and the Agency for Healthcare Research and Quality (AHRQ) are also at risk for facing reductions.
In addition to the findings put forth by the CHCA there are several public health drivers that are pressuring South Florida hospitals to seek innovative ways on how to manage pediatric care. Drivers include the fragmentation of the market between providers and overly concentrated pediatric healthcare systems inhibiting economies of scale, the high pediatric inpatient use rates signifying a break in the coordination of care and the redundancy in costly pediatric service lines. As result of the aforementioned challenges, a platform emerges to design an innovative pediatric system of care that improves quality and access, and, subsequently, lowers costs. This system is known as the PPP, a contract between the public sector and the private sector in which both parties agree to furnish a service or an asset for the public benefit. PPPs are not new in healthcare; they have been used globally to create highly efficient healthcare systems that generate attractive financial returns while also providing a public benefit. PPPs can be highly flexible and allow for diverse arrangements, representing a unique vehicle for transformation to a more sustainable healthcare system. With a strategic vision toward what an innovative redesign of the pediatric system of care could represent for South Florida and the positive impacts it would have in terms of quality, access, and cost, Hospital A embarked on an assessment to identify if implementing a PPP is the best way to realize a vision for an integrated pediatric system of care for South Florida. The foundation of this system will be built upon a PPP between Hospital A, the State, and participating counties, or their respective hospital facilities. As the current leading pediatrics provider in the region, Hospital A will coordinate pediatric services in the South Florida region with the goal of establishing an integrated delivery system. Hospital A would form a PPP with public providers Hospital B, C and D by managing their pediatric service lines.
Figure V. Pediatric System of Care for South Florida Considered by Hospital A
It is noted that Florida’s legislature is considering a proposed Public-Private Partnership Act (Senate Bill 576 and House Bill 337). The Act states that certain qualifying projects, such as schools, water/wastewater management facilities, technology infrastructure or any other public infrastructure facility that are utilized for a public purpose may be fulfilled by PPPs. Interestingly, this model has also been used to finance hospitals in Florida and other regions and, more importantly, the healthcare model has also evolved to include clinical services in the PPP. It is this clinical PPP model that Hospital A hopes to apply in South Florida.
Hospital A is open to considering a variety of governance structures that allow for preservation of individual brands and relationships, however, securing quality care and access for the pediatric population of South Florida will be paramount to all other considerations. Hospital A believes that the returns received from utilizing a PPP model to the State and the pediatric population are derived from improved quality and access along with lower costs. Figure VI provides an overview of the integrated pediatric systems of care returns related to quality, costs and access.
Savings and benefits are difficult to quantify, but third party evidence and a preliminary cost of care analysis gives Hospital A confidence that a PPP would be the appropriate avenue to follow. Benefits of the PPP are derived through 5 main areas, all of which reinforce quality; 1) economies of scale, 2) integrated care, 3) service line regionalization and creation of centers of excellence (e.g., Cardiac, Neuroscience, Ortho, Cancer, etc.), 4) economic development as a result of the PPP, and 5) potentially reduced tax rates in the proposed taxing districts. Expected benefits/savings as a result of a PPP include quantifiable savings to the State’s pediatric healthcare system, which will likely range from 20-25% of patient care expenses over a ten-year period. Additional non-quantifiable savings related to service line regionalization, economic development, and tax district savings may represent even larger opportunities. Hospital A would take the lead in executing the pediatric PPP and implementing an integrated model of care, rooted in principles of quality and population health for kids.
Besides improvements in quality, access, and population health for kids, the PPP can deliver significant savings and greater value from Medicaid spend for the State of Florida. Considerable state spending on pediatric care requires that the timing of benefits realization be considered. Assuming stakeholder buy-in and cooperation, the PPP can start delivering savings within the first year. Within the first year of implementing a PPP, short term savings that are to be expected are economies of scales, elimination of redundant FTEs and back office functionality, supply chain optimization and renegotiation of contracts. In addition, the hospitals would benefit from standardization of protocols by implementing Hospital A clinical protocols and operating room scheduling, and reduced tax rates in the proposed region taxing districts.
Aside from short-term savings there would be additional long-term savings that would be seen beyond the first year of implementation. The hospitals within the PPP would see integrated care savings related to allocation of care to the lowest cost setting such as reductions in emergency department (ED) usage (particularly among the Medicaid population) and a reduction in the inpatient utilization and length of stay (LOS) (particularly for asthma, diabetes and Neonatal Intensive Care Units (NICU)). PPPs would also allow for economic development, the development of a regional pediatrics database and extended telemedicine, service line regionalization and the creation of Centers of Excellence.
III. Research Framework
i. Statement of the Research Problem
As previously stated, PPPs are a model that are often utilized within the healthcare field in the US, however, it is not a model that has been implemented in the South Florida region in the pediatric setting. While there has been some success in implementing the model to service pediatric populations in various regions it is not something that can be guaranteed in the south Florida region given the changing political and economical landscape. As a result of the changing landscape, hospitals are seeking a way to not only provide high quality care to the pediatric population but they are also looking for a way to do so in the most cost effective way. Therefore, there is a need to find a way in which specialty areas for each hospital can be highlighted and care is delivered in a consistent manner instead of duplicating efforts and providing care that is not standardized. PPPs are playing a “critical role in improving the performance of health systems worldwide, by bringing together the best characteristics of the public and private sectors to improve efficiency, quality, innovation, and health impact of both private and public systems.” (Mitchell, 2005) Based on discussions with hospital senior leadership, hospitals are providing care without collaborating with other hospitals in the region. Under the current model of care delivery, if hospitals continue to operate at the status quo, hospitals would be able to continue providing adequate care to their patients, however, the treatment is not as cost effective as it could be.
Should Hospital A find that the PPP is not the ideal model to be implemented in the region, they will need to assess other options to ensure they continue to be the leading hospital in the region. It is imperative that Hospital A find an integrated model that will work for the regions as they will continue to face increased competition from their proposed partners that would in turn cause the hospital to potentially loose potential volume and revenue to existing organizations that are becoming increasingly stronger over time within the pediatric market. Even though there is a significant amount of research that has focused on the utilization of the PPP model within the healthcare system there is a not enough research that is specific to the proposed region. Given the lack of region specific data, it is helpful to dig deeper to a more granular level to assess if a new integrated care model can be implemented to further enhance the pediatric services delivered in South Florida and to determine cost efficiency.
ii. Purpose of the Company Project
The objective of this study is to determine if the application of a PPP is the most optimal option for the Hospital A to pursue, if so, what would be the strategy developed to implement such a partnership. This assessment will focus on the current state of the proposed region, South Florida. South Florida is a region that is the fifth largest urbanized are in the US with a population of more than 5 million. It is estimate that the South Florida population will grow by almost 3 million. As a result this region is recognized as one of the fasted growing regions in the country. It is because of this that the healthcare system faces challenges on how to best deliver high quality and cost effective care to population but more specifically the pediatric population. In an effort to capitalize on the legislative changes that will support the creation of a PPP as well as on the increasing demand from the payer and patients alike to have cost conscious care available Hospital A is seeking to find an innovative way to achieve its proposed goals.
Hospital A is the leading provider of pediatric care in the region and is national ranked in a number of service lines including cardiology, neurology and pulmonology among others. Their success in a variety of service lines highlights their ability to take the lead in coordinating and managing a PPP. Hospital A focuses on dominating market share, assuring financial growth, enhance regional/national brand and presence, and being the standard for service, outcomes, quality and service. Hospital A’s success is due largely in part to ability to attract some of the best physician talent in the region and in the South East of the US. However, despite having such high volume for some of their service lines and highly trained clinical and non-clinical staff they are still unable to maintain a leading edge financially and in overall volume among its competitors.
Based on initial conversations with Hospital A, the PPP is something leadership is interested in pursuing, however, they require analysis to support this recommendation. Based on the analysis conducted of literature available related to this topic as well as qualitative and quantitative data made available the expected conclusion would be that the PPP is something Hospital A should pursue because the cost of inaction or inappropriate response threatens the health of Florida’s pediatric population. If a PPP is not implemented there is the potential that it jeopardizes quality of care, drives duplication of costs, access is endangered and unnecessary utilization occurs.
iii. Project Methodology
The research conducted was primarily based on the analysis of data provided by Hospital A and additional data gathered through research of other hospitals in the area as well as the government. The majority of the information utilized was data obtained through Hospital A’s database system and projection databases related to financials, volume, utilization, and quality. In addition to quantitative data, qualitative data gathered through interviews conducted with Hospital A senior management about the financial data obtained and other information was utilized to reach a formal recommendation. Given the confidentiality of this assessment, only a few of the senior leadership staff are privy to the project, the interview list was kept rather limited in order to ensure Hospital A had the opportunity to conduct a proper assessment prior to wider discussions. Aside from data obtained through Hospital A and government databases secondary sources of information found through research on the web and other published articles were utilized.
The multiple data sources that were drawn upon as a foundation for analysis include the following:
Demographics • Historical and projected population for South Florida counties.
Utilization • Inpatient and emergency for all hospitals in South Florida counties including payer and service lines. Limitations to this data are that the ambulatory data is not as comprehensive as needed.
Financial
Expense • Average patient care experience per inpatient discharge, ED visit, ambulatory visit, and ancillary service for Hospital A, B, C and D. Limitations are that ED, ambulatory, and ancillary data not categorized by pediatric service line or age.
Financial
Revenue • Medical per diem reimbursement rates, total patient care revenue for inpatient discharges and for outpatient services. Limitations include that Medicaid per diem is not categorized by pediatric service line or age.
Qualitative
Key assumptions and inputs utilized include the following: Population
Definition • Pediatric population defined as male and female ages 0-21. • Newborn and Neonatal population is based on a ration to the obstetrics population
defined as all female ages 15-44.
Service Area
Definition • Primary service area (PSA) defined as all zip codes accounting for 77% of total discharges within the counties of the South Florida region. • Secondary service area (SSA) defines as all zip codes accounting for 23% of total
discharges within the counties of the South Florida region.
Service Line
Definition • Newborns/Neonate – All DRGs included in the CHCA Service Line Definition for “Neonatal Medical” and “Neonatal Surgical”. • Pediatrics – All patients ages 21 and under, excluding newborns and OB.
• Pediatric sub-specialties were defined by CHCA service lines for ages 21 and under.
Payor Mix • Payor mix is focused on Medicaid primarily as the highest payer. Analysis was developed based on categories of Medicaid and ‘other” to highlight this trend. The “other” category consists of all other types of coverage or uninsured.
• Pediatric Medicaid eligible calculated using percentage of 35% of total population as Medicaid enrollees (America Academy for Pediatrics – Medicaid State Reports).
Utilization / Demand Projections
• No inflation was applied to growth projections.
• Community wide discharges were grown based on historical use rates at each of the four facilities.
• Future demand was projected based on market share and growth projections proposed by Thomson Reuters.
Total Costs / Integrated Care
• The baseline total patient care experiences were calculated using each hospital’s original costs structure respectively.
• In the scenario depicting integrated care, if the hospital’s cost structure was originally above Hospital A, then Hospital A’s cost structure was used. If the hospital’s cost structure was lower, it was maintained.
• A 10% adjustment factor was applied to the total costs to represent economies of scale after integrated care.
• All integrated care assumptions begin in 2014 and carry forward.
The quantification of savings in the analysis depends on a solid understanding of patient care expenses (“expenses”). The analysis sought to first divide expenses into two major categories (inpatient and outpatient), and to further detail outpatient into ambulatory and ED. The reason for this division is that the integrated model and assumptions are predicated on decreases in inpatient and ED utilization. Thus, the goal was to detail expenses by: inpatient, ambulatory, and outpatient. Given limitations in the dataset available, assumptions were developed to identify the Pediatric component of expenses, as well as to allocate ancillary services appropriately, these are detailed in Figure VII.
Figure VII. Assumptions to Identify Pediatric Expenses
Cost Allocation to Inpatient and Outpatient
AHCA Annual Reports for each hospital were used to distribute patient care expenses between outpatient and inpatient. A cost to charge ratio was calculated by dividing total expenses by total revenue. The ratio was then applied to the inpatient revenue and outpatient revenue to determine inpatient and outpatient costs.
Calculation of Total Pediatric Inpatient Patient Care Expenses
Total inpatient pediatric costs were calculated through the addition of Pediatric Acute Care, Pediatric Intensive Care, Neonatal Intensive Care, and
Neonatal/Newborn costs. Additionally, total inpatient ancillary costs were also included. Since ancillary costs were not separated for pediatrics, a ratio of total pediatric costs by total acute care costs was applied to the additional ambulatory and ancillary services to approximate the pediatric component.
Calculation of Total Pediatric Outpatient Patient Care Expenses
Total outpatient expenses were available by ED and ambulatory. Given the data available, it was not possible to allocate ancillary costs by ED and Ambulatory. For this reason, ED and Ambulatory ancillary costs were aggregated. In order to carve out the pediatric component, the total ED + Ambulatory costs were divided by total visits to obtain a per visit average. While this is the same for adults and pediatrics, the assumption was that an ED or Ambulatory visit does not differ in costs significantly.
Calculation of Cost per unit (discharge or visit)
To achieve a cost per unit (discharge or visit) Inpatient and Inpatient Ancillary total costs were divided by total pediatric discharges per facility to obtain an average cost per discharge; as mentioned above, ambulatory and ED expenses are not shown by pediatrics on the annual report, so it was assumed that adult and pediatric cost per visits are equal. Using this assumption, total Ambulatory/ED and
Ambulatory/ED ancillary costs were divided by total visits (pediatrics and adult) to obtain a cost per visit rate. These rates were applied to appropriate discharges and visits for projected future expenses.
IV. Literature Review
With a methodology in place for addressing whether or not Hospital A should implement a PPP model in the South Florida region it is imperative to identify best practices and supporting evidence in implementing a PPP. In this section there is a review of literature depicting the role of a PPP and its impact in a variety of areas in healthcare such as utilization, financial expenses and revenue, volume, quality and infrastructure overall. The findings of the review indicate that while there are numerous organizations across the country implementing a PPP model, there is not a “cookie cutter” model than can be implemented in any region. Implementation of the model will vary across the spectrum depending on the needs of the organization. The literature obtained allows for further insight into the PPP model and the best alternatives available for Hospital A to take ideas from in order to develop the most optimal model. To best understand the best type of PPP model to propose, it is critical to first have a good understanding of the PPP within the healthcare context and then obtain an understanding of its successes in the market, pediatric and adult.
i. PPP Model
The current healthcare environment in the US is quite competitive and is requiring hospitals to find innovative ways in which to maintain their competitive edge or gain additional market share by taking business away from their competitors within their primary and secondary service areas or by expanding their service scope to areas in which they have little to no presence. While healthcare organizations have a focus on quality they also want to ensure that while delivering quality care they are able to reach financial incentives. Besides improvements in quality, access, and population health for children, a PPP can deliver significant savings and greater value from Medicaid spend. Considerable state spending on pediatric care requires that the timing of benefits realization be considered. Assuming stakeholder buy-in and cooperation, a PPP can typically start delivering savings within the first few years of implementation if executed appropriately.
Governments both local to the US and internationally have introduced the PPP concept in order to improve the value of the money utilized in public service projects or because it has the possibility of obtaining private finance to public service. (Espigares and Torres, retrieved from
http://www.ugr.es/~montero/XVIeep/81.pdf) The main reason to implement a PPP model is to
create better value for their money when compared to the government delivering the service in a traditional manner. At times traditional delivery of government service may not be efficient or of high quality, therefore the government may choose to utilize a PPP model in order to use private sector capabilities to deliver in a more efficient manner better quality and more quantity. (Espigares and Torres, retrieved from http://www.ugr.es/~montero/XVIeep/81.pdf) While this may prove to be true, it is also important to note that collaboration between the state, public and a private organization is not always a guarantee of success. In order to have a successful collaboration it is important to ensure that there is sufficient transfer of the risk, if not then it would be viewed a traditional public procurement function whereas if there is sufficient transfer of risk from the public organization to the private organization then it can be viewed as a PPP. In a PPP the government is responsible for setting the requirements and subsequently grants the private organization to develop and set the particular aspects of the agreement. (Corner, 2006) Privatization of public service functions became more popular in the 1980s but for some time was something that was being rejected but the health care sector due to the fear of failure. Over time it evolved to a separation of purchasers and providers within the public sector and then
delivery was moved out all together from the public sector in order to increase value for money, innovation and responsiveness to users. (Espigares and Torres, retrieved from
http://www.ugr.es/~montero/XVIeep/81.pdf)
PPPs in the healthcare sector can take different forms depending on the level of risk and responsibility the public and private sector take on. In healthcare the PPP is characterized by the organizations that form part of the PPP having common goals and similar levels of risk and reward. In the majority of health related PPPs the private sector organization is usually the one to take on all or most of the responsibility of the operations and coordination while the financing can come from the public or private sector or both. (Espigares and Torres, retrieved from
http://www.ugr.es/~montero/XVIeep/81.pdf) Below is Figure VIII, which provides an overview
of the several key types of PPPs that are often found within the health care sector. The format utilized for the PPP will depend on the regulations currently in place in the healthcare sector in the proposed area of service.
Figure VIII. Types of PPPs Found in the Health Care Sectors
Source: Nikolic and Maikisch, 2006
Partnering with the private sector directly implies potential benefits that include a reduction in government spending, greater efficiency and/or better management of the services provided or infrastructure. (Espigares and Torres, retrieved from
http://www.ugr.es/~montero/XVIeep/81.pdf) The shift of government programs toward social
insurance programs and contracting mechanisms as a way to expand health care coverage has only deepened the public and private sectors interdependence on each other. (Mitchell, retrieved from http://www.hsph.harvard.edu/ihsg/publications/pdf/PPP-final-MDM.pdf) The
interdependence that has developed between the two has highlighted the importance of working together and allowed each of the sectors involved to recognize that cooperation is mutually beneficial regardless of the time and effort it takes to maintain an amicable relationship.
One of the most common reasons to enter into a partnership is the financial impact that may be experienced. The financial impacts that may be the outcome of a PPP are in the form of additional resources or cost reduction; regardless the partners will see a long or short tem
financial impact if the PPP is executed appropriately. In addition to financial gain there are other considerations that provide additional incentives to enter into a PPP. Transfer of knowledge between the partners is an important the incentive especially within the healthcare sector, for example in the delivery of care for a specific service line in which one hospital provides a higher caliber of care and better outcomes when compared to the other organizations in the partnership. There are various benefits from entering into a PPP, while the most popular one is the financial impact there are other considerations such as prestige, influence and publicity. (Mitchell, retrieved from http://www.hsph.harvard.edu/ihsg/publications/pdf/PPP-final-MDM.pdf) PPPs should only be entered into as long as there is a transparency and mutual benefit.
Also important when developing a PPP is the governance structure for the proposed model. Governance is defined as the rules, processes and laws by which an organization is operated.” (IFC, 2010) In order to determine the appropriate governance structure the organization must first select the appropriate PPP model it will follow. PPPs are primarily utilized as a procurement vehicle for the government to be able to build or upgrade infrastructure. Its intent is to ensure that all parties involved in the PPP are benefiting by ensuring the share of risks, rewards and responsibilities. (Barrow et al, 2011) The PPP model is viewed as the preferable alternative rather than contracting out services because it utilizes and supports the strengths of all parties involved. It is a unique model because it extends beyond the design, bid, and build phase and includes operation and maintenance over a long-term period. (Barrow et al, 2011) According to Iossa and Martimort the PPP is characterized by three main features, tasks bundling, risk transfer and long-term contact. Typical PPPs involve bundling of the design, build, finance, and operations that is contracted out to a variety of firms. The models that fall under this feature are the design, build, finance and operate model (DBFO), the build, operate and transfer model (BOT) and the build, own, and operate model (BOO). The risk transfer feature includes the transfer of a large portion of the risk and responsibility to the contractor. (Iossa and Martimort, 2009) In this case, the government would be the entity to specify the service required and the basic standards, but it allows the other entities involved to control the rights and responsibilities on how to deliver the services and meet the standards that
were specified in the contract. Therefore, the design, construction and operational risk are mostly transferred to the private sector organization. The term contracting feature includes a long-term contract that lasts approximately 20 to 35 years. (Iossa and Martimort, 2009) Payments to the private sector for use of the facility are made by the government or by the public who are users to the facility. The risk of ownership by the private sector increases according to the type of model implemented, Figure IX illustrates the increase in risk as the PPP models change.
Figure IX. Types of PPP Projects and Risk Associated to the Private Sector
Source: Barrow et al, 2011
In addition to determining the type of PPP model, as part of the governance structure the entities involved in the PPP will also need to determine the board composition, membership, representation, voting rights and whether they will want private investors as part of the PPP model. While doing so, the partnership must possess core principles required for a partnership. The partnership should provide relative equality between partners, a mutual commitment to the health objectives, autonomy for each partner, shared decision-making and accountability, equitable returns and outcomes, and benefits to stakeholders. (Raman, 2009) It is the responsibility of the leadership of the organizations to ensure that the responsibilities of governance are carried out through planning, decision-making and performance management functions. However, it is also important to ensure clinicians are involved in the governance structure as they are driving clinical decisions of the organization. Figure X provides an overview of the principles of good governance that should be considered when determining the governance structure.
Figure X. Principles of Good Governance
Stakeholder Rights • Stakeholders include investors and employees, as well as patients, community members and organizations, and vendors.
• Some rights are accorded by law and others may be established by the organization. Stakeholders should know their rights and have a means of redress for violation of their rights.
Integrity and
Ethical Behavior • Decisions are based on the values held by an individual or organization. It is important, then, that the organization defines and agrees on a shared set of values and code of conduct, such that decisions are based on a common understanding. Disclosure and
Transparency • The organization implements procedures to independently verify and safeguard the integrity of its operating and reporting systems. Disclosure of material matters concerning the organization should be timely and balanced to ensure that investors and other stakeholders have access to clear, factual information.
Performance
Orientation • The organization should establish indicators to determine whether goals and objectives are being met. All aspects, including financial, management, and clinical performance, should be measured to provide an overall assessment of the
organization. Responsibility and
Accountability • The leadership of a health care facility is ultimately responsible for providing safe, high quality care. It is accountable for its actions to the relevant stakeholders, e.g. investors, health authorities, community, and individual clients.
Mutual Respect • Leaders should demonstrate mutual respect and civility with a goal of building trust. Source: IFC, 2010
While there are principles to consider when determining a governance structure, there is no perfect or correct structure for healthcare organizations; it will all depend on the complexity of the organization and parties involved. Therefore, given that PPPs are extremely complex in nature it is evident that careful consideration must be given to a number of issues to ensure the PPP contract provides clear direction and regulation. To ensure all interests are aligned and taken into account the governance structure should take into account the use of mechanisms like profit sharing, commissions or efficiency wages. The arrangements that are made should be detailed in the contract and should reflect risk-baring costs and efficiently organize information in order to reduce problems that may come up as a result of asymmetrical information. (Barrow et al, 2011) One of the more common problems that arise with PPPs are incomplete contracts which are a direct result of asymmetrical information on behalf of the parties involved or difficulty measuring required performance outcomes and thresholds for parties involved. (Barrow et al, 2011) Accountability is something that is critical to the success of a PPP and it is an area in which there is a lot of variability when implementing a PPP therefore it is also important to ensure the contract and governance provide the ability to make parties involved accountable for
their involvement. If the PPP results in the building of a new facility down the road or development of a new product, it will also be important to ensure residual rights of control are included in the contract as this is very important in relation to a PPP implementation in the healthcare sector.
PPPs can take many forms as is evident from the research conducted, it is up to the organizations that will be involved to determine the most appropriate PPP model and governance structure that will work in the interest of all parties involved. Thoughtful consideration and research is required to determine these critical pieces and should be done so with input from all parties involved in order to ensure buy-in from the beginning of the process.
ii. Impacts of the Implementation of Integrated Care Across the US
While there are few PPP models that have been assessed in the US related to the pediatric market, success in the adult market can also indicate the benefits of implementation. Therefore to better understand the impact that a PPP model will have on the healthcare model in general it is important to take a deeper look at some of the adult implementations and their successes as well as those in the pediatric space. Below are a number of case studies related to integrated care models such as PPPs and their key outcomes when implemented. Evidence supports the theory that implementing a new integrated model of care improves quality outcomes and reduces utilization and associated costs.
The Bird et al case study conducted in 2011 assesses if an integrated care model such as a PPP reduces the use of hospital resources by pediatric patients suffering from asthma. The model implemented assigned care facilitators who provide assistance in promoting self care and management, education and link to an integrated healthcare system that is made up of acute and community based healthcare providers. (Bird et al, 2011) The purpose of utilizing this model was to assess improvement of quality of life and health between pre use of acute services with no interaction of a care coordinator and an integrated model and post use of acute services of the integrated model. The study found that there was a decrease in the use of the ED, admissions and LOS on behalf of the patients who utilized the care coordinator that promoted the use of an integrated model while the other subset saw an increase in ED use, admissions and LOS. In addition, not only were there improvements in utilization, there were also improvements in health and quality of life, including physical and emotional. The reduction in the use of hospital
services was attributed to the aversion of preventable presentations and admissions, via the enhancement of care - and self-management, and access to community health services. In an additional article related to Chronic Disease Management of asthma and PPP by Meyer and Smith there is evidence of significant impact of integrated care on utilization and cost, which leads to predictable savings. The article focuses on home environmental assessment and amelioration for patients with frequent ED use or hospitalization, this is similar to a patient centred medical home approach, which allows for high generalizability when comparing. There was a 49% reduction in overall urgent care utilization related to emergency department use, hospitalizations and unscheduled clinic visits.
A number of published studies related to asthma provide a positive correlation related to the return on investment on the development of quality improvement studies and cost savings. In 2007, the Center for Health Care Strategies (CHCS) conducted an assessment of the number of asthma related integration of care models in which it they found positive key outcomes that support the implementation of an integrated model such as a PPP. A study conducted by Krieger in 2005 found that the use of community health workers to provide home visits, generate action plans, deliver resources to reduce exposures, and advocate for improve housing conditions led to a 15% reduction in asthma related urgent health services use. Alternative methods of care delivery are also part of what a PPP would entail, also included in the CHCS study were alternative delivery models. One model assessed by Krishna in a 2003 study is the use of internet-enabled interactive multimedia asthma education program by participants in exam room and waiting rooms during clinic visits. Implementing this type of education led to a 68% reduction in ED visits, a significant reduction in utilization that leads to unnecessary spending on behalf of the patient and the organization. In a study conducted by Teach in 2006 it was determined that the use of specialized, ED-based clinic following an ED visit for asthma led to a 46% reduction in ED visits for asthma. The clinic provided assessment and education in asthma self-management and environmental triggers, and linkages and referrals to ongoing care. An additional study related to asthma by Walders in 2006 assessed the use of interdisciplinary care teams to provide medical care, asthma education and problem-solving therapy.
Utilization directly impacts cost therefore it is important to identify additional instances in which costs savings are the results of implementing integrated care models. In the 2004 Villagra Diabetes Study, telephonic disease management was assessed as part of a PPP structure.
The telephonic disease management included web-based patient education, home remote patient monitoring devices, reminders and educational mailings for patients. Findings showed a 24% reduction in hospitalizations, a 14% reduction in ED visits and a 5% reduction in office visits. This study shows evidence of predictable savings in which a unique approach was utilized to integrate various methods to reduce patient visits that are not needed.
Providing the best care to pediatric patients starts when the babies are in utero, an area in which Hospital A is currently not involved in providing care therefore it is also important to ensure that if Hospital A implements a PPP it will also benefit the other hospitals that excel in providing care for mothers undergoing a high-risk pregnancy. The ability for a hospital that specializes in high-risk pregnancy to provide interventions while the baby is in utero has proven to yield savings. (CHCS, 2008) In a study conducted by CHCS it was found that providing a similar function of care as provided by a care facilitator and patient centered medical home approaches that includes intensive pre and postnatal care focused on dietary counseling as well as home visits throughout pregnancy and postpartum leads to significant cost savings. The study concluded that implementing this integrated care led to a reduction in NICU admissions from 62% to 31% and it also led to a 39% reduction in hospitals costs. As a result in reductions in the areas previously mentioned, it was found that there was a 9-month reduction in the total months that the mother was on Medicaid. Therefore it was found that not only the patient and the hospital experience savings but there is also additional cost savings to the government program. In addition to the studies above, in the 2005 Stankaitis High Pregnancy Study of organizations that were implementing a PPP model it was determined that the implementation led to the identification of high-risk pregnant women through reimbursement incentives to obstetric practices; perinatal nurse care coordinators; psychosocial and medical support including home visits, transportation assistance, skilled home care, and social service referrals. As a result there was a 47% reduction in NICU admissions overall. Similarly the Luke 2003 study that focused on specialized clinic providing additional maternal education and nutritional assessment and monitoring led to a 31% reduction in NICU admissions.
Care coordination for pediatric patients is imperative in order to ensure quality improvement and cost improvement. The study published by Klitzner et al in 2010 observed if care coordination for pediatric patients suffering of complex diseases yielded positive outcomes for both the patient and the organization. Implementing a new model of care is believed to
increase value to patients and improve outcomes for the hospitals. (Klitzner et al, 2010) The study focused on patients treated through the UCLA Pediatric Medical Home Project that included varying elements such as follow-up appointments and access to a family liaison. The study found that implementing a different model of care led to a decrease by 50% of ED visits per patient after enrollment in the medical home program. The study concluded, “incorporating a program of care coordination according to the principles of the medical home into an outpatient pediatric residency teaching clinic may not only serve as a training vehicle for pediatric residents, but also create favorable alterations in medical resource use.” (Klitzner et al, 2010) Serving the underserved in the community is one of the drivers that lead to implementing a PPP at times. Often communities that are served by public hospitals have fewer resources available to them due to budget constraints within the government. Currently, the healthcare system faces numerous challenges impacting not only pediatric patients but adults as well. Challenges identified include inadequate access, increasing healthcare costs, and economic and systemic pressures that directly impact quality. (National Association of Community Health Centers, 2007) The US needs a strong and evenly distributed primary care workforce in order to ensure good health for the population. (National Association of Community Health Centers, 2007) The study conducted by the NACHC focused on the use of community health centers (CHCs) to provide affordable care to underserved communities. The study found that CHCs increase patient access in underserved demographics (indigent, uninsured, underinsured, etc.), prevent sickness, manage chronic illness, and reduce the need for avoid avoidable and costlier care, such as ED visits or hospitalizations. (National Association of Community Health Centers, 2007)
An additional report developed by the Institute of Medicine and the Healthcare Financing Administration also states that implementing a model of integrated is a significant factor in improving quality and decreasing cost of care delivery. (Wise et al, 2006) The purpose of the Institute of Medicine’s assessment is to verify the impact of integrated care on utilization, cost, and quality of care for patients that are provided complimentary health coverage that is seeking to implement a proactive medical and disease management processes by conducting health risk appraisals designed to identify and prioritize health risks. In addition the program provided health summaries of each member’s medical care utilization, individual healthcare plans serving as the basic summary of active health issues and used to coordinate the care processes. The program also included evidence-based clinical guidelines covering the most common chronic
and acute health problems. (Wise et al, 2006) These tactics within the care model led to a decrease of $756 in costs per member per year when compared to a sample population that did not have access to the model mentioned, providing sound evidence that they integrated care model provided significant cost savings to the organization. Furthermore, when looking at the outcomes of the population served by the proactive population-based disease management and complex care management there is clear evidence that coordinated medical and disease management programs have the potential to provide significant positive impacts to the organization when executed appropriately. (Wise et al, 2006)
In 2008 the Common Wealth Fund published an article in which it described that in order to have a high performing healthcare system it should be re-organized. The study assessed the fragmented health system and provided recommendations for policy development in order to stimulate high performance, included in the recommendations were six attributes (Figure XI) that they determined were ideal for a healthcare delivery system. (McCarthy and Mueller, 2009)
Figure XI. Six Attributes of an Ideal Healthcare Delivery System Information
Continuity Patients’ clinically relevant information is available to all providers at the point of care and to patients through electronic health record systems.
Care Coordination and Transitions
Patient care is coordinated among multiple providers, and transitions across care settings are actively managed.
System
Accountability
There is clear accountability for the total care of patients. (Grouped this attribute with care coordination, since one supports the other.)
Peer Review and Teamwork for High-Value Care
Providers (including nurses and other members of care teams) both within and across settings have accountability to each other, review each other’s work, and collaborate to reliably deliver high-quality, high-value care.
Continuous Innovation
The system is continuously innovating and learning in order to improve the quality, value, and patient experiences of healthcare delivery.
Easy Access to Appropriate Care
Patients have easy access to appropriate care and information at all hours, there are multiple points of entry to the system, and providers are culturally competent and responsive to patients’ needs.
Source: McCarthy and Mueller, 2009
Community Care of North Carolina (CCNC) was one of the 15 case studies in which the 2008 report focused in order to develop the six attributes. CCNC is a “public–private partnership between the state and 14 nonprofit community care networks. The networks comprise essential local providers that deliver key components of a “medical home” for low-income adults and children enrolled in Medicaid and the State Children’s Health Insurance Program.” (McCarthy and Mueller, 2009) In this model there are primary care practices that participate alongside state
provided resources, information and technology support. The resources provided by the state include staff as well as financial reimbursement to the local network per member to cover management activities. In addition, physicians receive Medicaid fees and are being reimbursed an additional fee per member for medical home and population health management activities in order to ensure the physician takes a more active role in care coordination. CCNC is responsible for working with other community agencies in order to coordinate care with the local health department and mental health agency to provide community delivery systems. The community delivery systems were utilized to develop approaches that utilize the resources and relationships that CCNC has in order to meet the goals that have been set by the state. As a result the network receives supplemental funding for care management and quality improvement initiatives that are supported by statewide implemented performance measurement and benchmarking activities. (McCarthy and Mueller, 2009) The results of the study show that there was a cost savings and also improvements in care delivery when the CCNC model was implemented to manage chronic conditions. Per the study conducted by McCarthy and Mueller, the results experienced by CCNC is a good example of coordinate care delivery success and its relevance to other states that are seeking to improve care management and ensure that the under served population is receiving coordinated care.
The cases discussed in this section are only a few of the many cases that have been assessed to seek further insight into the impacts of integrated care models. The reference section lists additional cases assessed as reference for the purposes of the development of the
recommendations proposed.
iii. Value Based Healthcare Delivery
One of the primary drivers of implementing a PPP in south Florida is the idea that by utilizing the specializations in which each hospital is most successful and focusing on these given specialties not only will cost be reduced but also outcomes would in turn improve. Michael Porter states, “if you don’t measure outcomes you can’t determine value.” Porter states that to aid the US health care system patients should be placed in the center of the system in order to provide higher quality care at lower costs in all service lines offered. Instead of focusing solely on meeting revenue targets or meet physician demands, Porter believes healthcare organization must make changes that will allow them to meet the needs of the patients; “value for patients is
