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June 9, 2017

Ask the Expert: What sets the best integrated health systems apart?

Daily Briefing

This is the first post in our "Ask the Expert" series, in which Advisory Board's top experts answer common questions they receive from health care leaders.


“We integrated our health system—why haven't we experienced more performance improvement?”
- CEO of a recently integrated health system


Ron Charpentier

Ron Charpentier, Senior Vice President, Advisory Board Consulting

I recently met with leadership from a statewide health system that includes a university and nine community hospitals that are either owned or managed. Each of the hospital CEOs felt their facility needs were not being met by the health system—and wondered if they were a true, valued part of the system at all.

These complex relationships are becoming more common in health care as entities merge or affiliate with the intent to deliver integrated care, and are a frequent topic of conversation my team has with members. To get integration right, and avoid the frustration of your system's CEOs, you need to follow these best practices:

1. Take a look under the hood

It's not easy to make big moves when it comes to structural consolidation—with so many legal and operational hurdles to overcome in bringing together entities in an owned or affiliated fashion.

But in reality, that part of integration is just the tip of the iceberg. Many health systems that are struggling to deliver on the promises of consolidation have set up the right basic model, but have not addressed the performance challenges that lurk underneath. So even though they've consolidated, they haven't integrated—and by that I mean optimized their system for differentiated outcomes and competitive care delivery.

For example, one health system my team worked with set up the infrastructure for a medical group across a region in the Northeast. It was a major win for the organization, finally bringing together hundreds of providers under one roof. But while the physicians are now consolidated under a unified vision—clinical, operational, and cultural change hasn't happened at the practice level. As a result, the health system is still investing significant capital to address underlying issues because of that.

There are several effective ways to form a unified system, but the important question is whether an organization has leveraged the integration to improve performance. The best cases of integration I've seen involved a robust investment in change management down to the practice level, often with extensive training to ensure stakeholders are engaged—with elevated standards of clinical, financial, and operational performance hardwired at the point of care.

2. Reward agents of change

In the pursuit of systemness, health systems may face political sensitivities, organizational inertia, and sometimes changes in leadership. This process can be especially difficult in organizations with deeply rooted cultures, such as academic medical centers with faculty plans and chairs. And transformation is particularly challenging when the existing leadership model is actually the primary roadblock to a collaborative and integrated culture that drives performance.

Ultimately, leaders in seat across the integrated organization need to be:

  • Visionary and bold enough to break through political barriers, but wise enough to pace change;
  • Collaborative with clear prioritization of collective needs over individual gains;
  • Transparent in progress toward agreed-upon strategies and objectives—revealing barriers that impede progress, and illuminating operating, clinical and financial performance;
  • Accountable for executing and achieving results and also building a culture of accountability; and
  • Communicative to ensure the right information permeates the organization and drives the formation of an inclusive and outcomes-driven culture.

Health systems must determine what organizational model will inspire collaboration, motivate change, identify success, and promote accountability across all entities.

Some organizations are going as far as moving toward a service line/institute model, where leadership and care delivery is organized around wellness and chronic disease management. That's just one example of the trend toward breaking down historical silos to integrate care delivery—at a potentially high political cost. However you cut it, though, the structure and characteristics of leadership will have a direct impact on whether the integrated health system remains viable in today's market.

Challenges and opportunities for the integrated AMC

On June 14, my colleagues and I will be discussing strategies for the integrated academic health system and taking questions on a live webconference. Join us to learn more how organizations can better align to meet unique market challenges.

Register Now

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