Hospital Systems and Healthcare Reform

Hospital Systems and Healthcare Reform

DOI: 10.4018/978-1-4666-6355-8.ch009
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Abstract

In this chapter, the author addresses the degree of involvement of large hospital systems in convenient care models. These systems are not known for being nimble and innovative, as many are inhibited by fixed budgets and low tolerance for risk. However, they have recently joined the trends and developed their own retail clinics, urgent care centers, and online clinics. In fact, several hospital systems now have a “convenient care strategy” to reduce demand on their overwhelmed emergency rooms and better serve their patients. These strategies also help the systems better position themselves to deal with recent regulatory provisions. Implications of the Patient Protection and Affordable Care Act (PPACA), such as value-based purchasing and bundled payments are discussed in depth. The authors propose that hospital-based convenient care models that are appropriately aligned and integrated with the new arrangements will embody excellent opportunities for hospital systems to provide easy-access entry-points for new patients, to substitute expensive traditional care settings with less costly alternatives, and to deliver high quality and expedient care that will keep patients in their network.
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What is all this [healthcare reform] stuff about? It's about all the stuff we were supposed to be doing the past 10 years, but yet the market is saying get market share, get volume. — Larry Goldberg, CEO, Loyola University Health System in Maywood, Illinois (in Dunn, 2010)

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Introduction

The disruptive innovations described in the previous chapters have mostly originated from outside the traditional healthcare organization circles such as hospitals and hospital systems. As discussed, retail clinics were imagined by a dissatisfied patient turned innovator, urgent care centers first started with physician entrepreneurs, and online care can be credited to a young MBA student. Large hospital systems are not known for being nimble and innovative, as many are inhibited by fixed budgets and low tolerance for risk. However, as innovations start spreading, hospital systems notice them and occasionally decide to join the trend, often prompted by regulatory forces. In this chapter, we discuss the extent of involvement of hospital systems in convenient care models in the last decade or so. We also discuss the major provisions of the Patient Protection and Affordable Care Act (PPACA), and its implications on how hospital systems position themselves in terms of convenient care offerings. Table 1 summarizes our previous and current research on hospital-related retail clinics. In 2009, prior to the passage of PPACA, we conducted a first wave of eight in-depth interviews with executives in hospital systems that have a relationship with retail clinics. We have reported the results of that work in two papers (Kaissi, 2010a; Kaissi 2010b). In 2011, with PPACA just signed into law, Merchant Medicine, a consulting company that we are partnered with, conducted a survey of 20 executives from health systems operating retail clinics. The findings were reported in two recent papers (Kaissi & Charland, 2013a; Kaissi & Charland, 2013b). Lastly, early in 2013, we conducted another wave of thirteen interviews with hospital executives with convenient care relationships, as well as convenient care executives, researchers, and other experts in the field (see Key Informants section). This chapter will draw heavily on the results of these recent interviews, as well as synthesize our and others’ published research in order to examine how the retail clinic strategy fits with hospital system response to PPACA.

Table 1.
Summary of author’s research on hospital-related retail clinics
Nature of ResearchYear conductedPublications
Qualitative: Interviews with 8 health system executives2009 Kaissi (2010a)
Kaissi (2010b)
Quantitative: Survey of 20 health system executives2011 Kaissi & Charland (2013a)
Kaissi & Charland (2013b)
Qualitative: Interviews with 13 health system executives and convenience care experts2013

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