Chaos and Organization in Health Care

7. Organizing the Mainstream of U.S. Medicine

7 Organizing the Mainstream of U.S. Medicine The organizations profiled in the previous chapter are tightly structured provider groups, which own their own hospitals, employ their own physicians, and often have their own insurance companies. This management structure is sometimes called the clinic model, meaning that all caregivers work for the same clinic, regardless of whether the individuals may be focused on inpatient or outpatient care. When all the components of the provider organization sit under one management team, responding to crises and market imperatives is at least possible—even if collaboration in the improvement of care can be dif- ficult even in these circumstances. Perhaps advantages derived from this organizational effectiveness will make such tight organizations so attractive to the public that increasing numbers of patients will be attracted to them, and these tightly structured organizations will eventually dominate U.S. health care. The U.S. public seems to value its independence so highly that growth has been sluggish for these “closed systems” within which patients must keep most or all of their care. For most of the United States, staff model delivery organizations with employed physicians are the exception, not the rule. Can other U.S. providers become organized in ways that bring order to the chaos that characterizes the care received by most Americans? The challenges are formidable. Aview from a satellite of U.S. health care would suggest that its main components are academic medical centers, which are built around medical schools and teaching hospitals. This view would be misleading. Closer to the ground, it becomes apparent that most health care in the United States is actually supplied in small physician practices , which generally function like the small businesses they are. The good news is that these small practices frequently offer wonderful , personalized service to their patients, reflecting the pride of 120 Chapter 7 ownership of the physicians who run them. The bad news, as described earlier in this book, is that these small practices are usually not connected to each other or hospitals electronically and in other ways. This isolation reflects the cultural tendency of U.S. physicians to work alone—a tendency that is reinforced by a fee-for-service payment system that rewards doctor visits and hospitalizations, but not patients’ overall care. In this chapter, we will describe two models through which the organization of care can come to this fragmented mainstream of U.S. medicine. The first is a description of our own organization, Partners HealthCare System, which includes two major teaching hospitals as well as community hospitals and more than two thousand nonemployed community physicians. Partners is an example of a provider organization that includes all of the pieces of the tight organizations, but many are semi- or mostly independent, so Partners must work through influence more than control. In this less structured environment , we will look at how Partners is adapting some of the approaches developed by tightly structured delivery organizations. The second is an innovative new approach called the medical home, which proposes bringing systems that organize care into small physician practices— without actually requiring that these physician practices become members of larger organizations. These are not the only approaches being used to bring organization to the mainstream of U.S. medicine’s providers, but they offer a reasonable sense of the strengths and weaknesses of provider-based efforts to improve health care. These insights will be useful in assessing the potential of insurers, employers, and patients themselves to become the organizers of care—topics that will be addressed in the following chapter, and supply the context for considering recommendations in chapter 10 on how providers should change. The Academic Integrated Delivery System Like the tightly structured delivery organizations that underwent turnarounds discussed in the last chapter, Partners HealthCare was founded in response to a crisis. In 1994, managed care plans were rapidly increasing their share of the Massachusetts health insurance market and offering hospitals rates that covered marginal but not fully loaded costs. Hospitals had a choice of accepting rates that required a subsidy from other payers or giving up access to a patient population. More Organizing the Mainstream of U.S. Medicine 121 often than not, the hospitals capitulated and signed contracts at the lower rates for fear of losing patients. The managed care plans actually did some real care management, and the length of stay decreased dramatically wherever the...