Integration: from structural to functional.

Because of trends that are driving increased consolidation in the healthcare industry, community healthcare systems in the future will have fewer independent medical practices. Hospitals and physician practices can be structurally or functionally integrated, but those that are structurally integrated only, do not function as integrated health systems. For successful integration, leaders from many disciplines need to engage in a partnership and be willing to create conditions for a functional integration.

Northwest synergy: a lesson in effective collaboration.

Collaboration can be the most effective way to preserve the financial viability of providers and service lines in the same competitive market. When pursuing a large-scale collaboration, it's best to start small, with a single specific service area that can act as a testing ground for working out organizational, cultural, and financial issues. Organizational, cultural, and financial issues are best dealt with by focusing the collaborative effort within an entity that has a separate organizational structure.

Integration of an academic medical center and a community hospital: the Brigham and Women's/Faulkner hospital experience.

Brigham and Women's Hospital (BWH), a major academic tertiary medical center, and Faulkner Hospital (Faulkner), a nearby community teaching hospital, both in the Boston, Massachusetts area, have established a close affiliation relationship under a common corporate parent that achieves a variety of synergistic benefits. Formed under the pressures of limited capacity at BWH and excess capacity at Faulkner, and the need for lower-cost clinical space in an era of provider risk-sharing, BWH and Faulkner entered into a comprehensive affiliation agreement. Over the past seven years, the relationship has enhanced overall volume, broadened training programs, lowered the cost of resources for secondary care, and improved financial performance for both institutions. The lessons of this relationship, both in terms of success factors and ongoing challenges for the hospitals, medical staffs, and a large multispecialty referring physician group, are reviewed. The key factors for success of the relationship have been integration of training programs and some clinical services, provision of complementary clinical capabilities, geographic proximity, clear role definition of each institution, commitment and flexibility of leadership and medical staff, active and responsive communication, and the support of a large referring physician group that embraced the affiliation concept. Principal challenges have been maintaining the community hospital's cost structure, addressing cultural differences, avoiding competition among professional staff, anticipating the pace of patient migration, choosing a name for the new affiliation, and adapting to a changing payer environment.

Organizational design consistency: the PennCARE and Henry Ford Health System experiences.

There has been much discussion of the appropriateness of various organizational strategies for today's healthcare industry. This article presents case studies of two healthcare organizations that have pursued very different configurations. PennCARE uses a virtually integrated, loose contract-based arrangement, while Henry Ford Health System employs a vertically integrated, tight ownership model. Despite these different approaches, their overall designs are strikingly similar. In essence both systems demonstrate a property called organizational design consistency; they simply approach it from different ends of the spectrum. This article presents the notion of organizational design consistency and defines it as the steady pursuit of a single preferred configuration strategy across key elements of organizational design. To illustrate the framework the case studies target four key elements of organizational design (governance structure, organizational culture, strategic planning processes, and decision-making procedures) and explain how consistency across these components adds value to both of these differently configured healthcare systems. There is room enough for diverse configurations of organizations in the current healthcare environment. Consistency does not mandate conformity; value can be derived from both tight and loose models. Furthermore, when fashioning organizational design consistency strategies, healthcare systems should carefully choose tightly or loosely modeled configurations to appropriately suit their aims, their markets, and the capabilities and resources available to them.

Capitated contracting of integrated health provider organizations.

This paper examines global capitation of integrated health provider organizations that link physicians and hospitals, such as physician-hospital organizations and management service organizations. These organizations have proliferated in recent years, but their contracting activity has not been studied. We develop a conceptual model to understand the capitated contracting bargaining process. Exploratory multivariate analysis suggests that global capitation of these organizations is more common in markets with high health maintenance organization (HMO) market share, greater numbers of HMOs, and fewer physician group practices. Additionally, health provider organizations with more complex case mix, nonprofit status, more affiliated physicians, health system affiliations, and diversity in physician organizational arrangements are more likely to have global capitation. Finally, state regulation of provider contracting with self-insured employers appears to have spillover effects on health plan risk contracting with health providers.

Unique governance for a national ministry. Catholic Health Initiatives' board structure empowers laity, supports mission.

The three original founding healthcare systems and 10 sponsoring religious institutes of Catholic Health Initiatives (CHI) have developed an unprecedented governance model to support their vision of a national Catholic health ministry in the twenty-first century. The new organization spans 22 states; annual revenues exceed $4.7 billion. Religious institutes choose either active or honorary status before consolidating with CHI, depending on their desired involvement in the organization. Currently, nine are active and two are honorary. CHI's civil corporation comprises one representative from each active congregation. These representatives approve major changes in mission or philosophical direction. They control board membership by appointing three to five congregation representatives as sponsorship trustees, who are responsible for approving the remaining members of the Board of Stewardship Trustees. This half-religious, half-lay governing board is responsible for leading CHI. CHI has only two levels of governance, a national board and boards of market-based organizations, for instance a network of facilities with one management structure, or a community board of an individual facility. This avoids multiple administrative layers and approval processes. The organization has a civil identity as CHI and a canonical identity as a public juridic person of pontifical right, called Catholic Health Care Federation (CHCF). The governing board members of CHI, as members of CHCF, serve as the religious sponsors for all CHI health facilities. Some facilities have already been "alienated" (turned over) to CHI by their religious institutes; others will be alienated in the future. CHI's recent consolidation with Sisters of Charity of Nazareth Health System added an 11th sponsor, a sixth geographic region, and two members--one religious and one lay--to the governing board. The governance model assists such growth through the appeal of an equal religious-lay partnership and a flexible sponsorship model.

Hospice operations and perspectives: Part III.

As managed care and integration become increasingly important in healthcare, the hospice movement is struggling to find new ways to fit and survive within the changing system.

Surviving the chaos of merger mania.

Mergers are the watchword of the decade as managed care changes how health care is delivered. Beyond changing day-to-day operations, mergers can affect staff personally. How can home care and hospice managers help their staff to keep priorities straight and morale high?

A strategy for coping with change: an affiliation between a medical school and a managed care health system.

Case Western Reserve University School of Medicine (CWRU), a private research-focused medical school, and Henry Ford Health System (HFHS), an integrated health system with a preponderance of managed care, have established a formal, broad affiliation that includes substantial commitments that bind the two organizations. Among them are formal full-time faculty appointments at CWRU for qualified professional staff of HFHS, designation of an associate dean for CWRU at HFHS, election of HFHS faculty to key medical school committees such as admission, curriculum, and promotions and tenure, and the commitment of funds to the affiliation by both organizations: a grant from HFHS to CWRU for curriculum development, and investment from CWRU to HFHS. The alliance of two such organizations is made complex by a number of issues. They include differences of institutional cultures as well as traditional issues in academic health centers such as departmental authority over curriculum and faculty appointments, competition for academic preeminence, and competition among hospitals for patients. The affiliation was facilitated by shared commitments to education, agreement on the need to adapt student education to the emerging managed care environment, a shared commitment to health services research, investment in the concept that learners add value to a health care delivery setting, and the desire to develop graduates with knowledge of practice in managed care. The authors conclude that medical schools and integrated managed care health systems gain sufficiently from such an affiliation that the investment of time, effort, and resources is readily justified.

Arranging affiliation agreements and outside rotations.

Affiliation agreements are necessary when a sponsoring institution makes arrangements for all or part of the education elements of an internship or residency program to be delivered at another hospital. The sponsoring institution may be a college of osteopathic medicine or an osteopathic hospital. Some basic considerations, which are outlined herein, should be reviewed when the sponsoring institution enters such agreements. Some of these considerations are requirements of the American Osteopathic Association, while others are necessary to avoid later complications. Agreement should be reached on negotiable factors, accepted by both institutions, and then referred for legal review by appropriate authorities.