Report from the Doctor’s Office: Complexities of a Modern Day Integrated Delivery Network | Sherpas in Blue Shirts

Posted On September 30, 2011

We recently met in our offices with a practicing physician leader for a major healthcare organization selected to direct development of an Accountable Care Organization (ACO) and a regional Health Information Exchange (HIE). The mission he is embarking on is highly complex, and managing it effectively will require cooperation from competing internal and external constituencies.

Our discussion focused, from a physician’s viewpoint, on the intricacies and hurdles that will need to be bridged before the new organizations can be launched. For example:

  • Government-mandated compliance needs are still under debate but have short implementation timeframes
  • The executive management-appointed board lacks clarity on the nature of a multi-entity Integrated Delivery Network (IDN)
  • Internal disruptive forces require leadership make some tough choices and commit to a plan for structure development and governance models before it can make decisions
  • The need to share information with competitors within a community creates an extremely complicated situation with a further exacerbated and delicate decision-making process, and attempting this without first gaining commitment will ensure unnecessary costs due to delays, and may well result in failure

Here’s the follow-up summary I sent to the Everest Group team members who participated in the meeting:

“Team,

As we heard – confirming what we already knew – the complexities Any Hospital System will face in its effort to address healthcare reform with the development of Accountable Care Organizations and Health Information Exchanges are tremendous. The political nature of dealing with multiple stakeholders can be daunting to say the least.

To be successful, executive leadership at Any Hospital System must commit to defining a plan with a top-down approach that clearly identifies an end state and the steps required to achieve its goals. Finding the right entry point will be difficult because of the political implications, the individual ambitions of the stakeholders, and their lack of leadership.

IDNs nationwide will face similar hurdles. Finding that entry point where commitment can be obtained will be a significant challenge. Defining the point of view for the company and taking it to the C-suite will be a necessary step. It will become clear along the way which organizations are not prepared to make the commitment, and where leadership changes will need to occur before we invest in the effort. Part of that change will be a direct result of how reform plays out for the development, or not, of ACOs, HIEs, and other key components of the healthcare reform effort. There is clearly uncertainty in the political landscape that will cause delays in commitment to organizational development and the accompanying procurement of services.

Our physician friend is a primary example of the frustrations physicians encounter and the increasing pressures they face not only in practicing medicine but also in changing the way they operate their own business and deliver care. The implications of this reality will eventually cause a shortage of physicians, clinicians, and care givers as regulatory compliance becomes more complex. The existing professionals will opt out (retire) and there will be fewer trained experts to take their place.

We’ll be speaking again with our physician contact in two weeks. The purpose of the meeting is to discuss how Any Hospital System can move forward in establishing a plan and committing to an organized, structured approach to this IDN initiative. Best, Gary.”

The development of a point of view for the complex issues IDNs will face due to federal healthcare mandates has created this scenario nationwide. Developing a strategy for and the ultimate provision of necessary services are complex tasks that will challenge the industry to reach viable solutions. There is clearly a need for the development of a strategic direction that not only allows mandates to be met but also fits healthcare organizations’ needs for a sustainable model.

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