Page 35 - Hoag Orthopedic Institute 2014 Outcomes Report

“THE FORMATION OF HOAG ORTHOPEDIC INSTITUTE EMBODIES THE PRINCIPLE THAT ENTITIES CAN BEST ACHIEVE CLINICAL QUALITY AND EFFICIENCY
BY FOCUSING ON A LIMITED RANGE OF CLINICAL PROCEDURES. IN DOING SO, THEY REDUCE THE COMPLEXITY THAT IMPEDES PERFORMANCE IN ORGANIZATIONS THAT ATTEMPT TO OFFER ALL SERVICES TO ALL PATIENTS.” JAMES C. ROBINSON, PROFESSOR, UNIVERSITY OF CALIFORNIA, BERKELEY
CASE STUDIES OF ORTHOPEDIC SURGERY IN CALIFORNIA: THE VIRTUES OF CARE COORDINATION VERSUS SPECIALIZATION
University of California, Berkeley, Prof. James
C. Robinson writes about two models of care competing to remediate the ills of the U.S. health care system in the May 17, 2013, issue of Health Affairs, a leading journal of health policy thought and research. His article highlights these two frameworks, made manifest at Kaiser Permanente Irvine Medical Center, and Sand Canyon Avenue neighbor Hoag Orthopedic Institute.
Robinson points to Kaiser as a thriving example in California of a high-volume and diversified organization combining physician groups and hospital systems under a global payment system. This framework, he contends, underlies the Affordable Care Act’s emphasis on accountable care organizations.
He also points to Hoag Orthopedic Institute as a center of excellence focused on a high-volume service line operating as a joint venture. (HOI is 49 percent physician-owned, 51 percent Hoag Hospital-owned. HOI was the last specialty hospital in the United Stated approved before the Accountable Care Act banned physician-owned specialty hospitals, precluding physicians from sharing in the profits of facilities where they provide care. However, 72 percent of ambulatory surgery centers are at least partially physician-owned. Nationwide there are at least 89 specialty hospitals.)
Robinson reports that market competition seems to be resolving in favor of an integrated approach, as seen in the Kaiser model. At the same time,
he cautions that the value of specialization must not be lost, and warns against “bureaucratic supervision” and “a weakening of local accountability” in the battle for efficiency.
James C. Robinson Health Affairs Abstract
Two overarching frameworks compete to address the organizational ills of the health care system. One framework diagnoses lack of coordination and prescribes integration and global payment. The other diagnoses loss of focus and prescribes specialization and episode payment. This article, based on research and interviews, assesses how the two frameworks manifest themselves at two high-volume orthopedic hospitals in Irvine, California. The Kaiser Permanente Irvine Medical Center is part of a large and diversified health system. The Hoag Orthopedic Institute
is a single-specialty facility jointly owned by the physicians and the hospital. Market outcomes, such as the merger of the Hoag specialty hospital into a larger diversified health system, suggest that Kaiser’s focus on coordination of patient care from preadmission to postdischarge is a key factor in its success. But Hoag’s specialization also leads to improved efficiencies. The integrated approach appears to be prevailing. At the same time, large diversified organizations might obtain further efficiencies by pursuing service-line strategies as described in this article—for instance, by providing incentives for efficiency and quality for each specialty and type of care.
Copyrighted and published by Project HOPE/Health Affairs
and reprinted with permission. James C. Robinson J. C., Case Studies Of Orthopedic Surgery In California: The Virtues Of Care Coordination Versus Specialization. Health Aff (Millwood). 2013; 32(5): 921-8. The published article is archived and available at www.healthaffairs.org.
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