One example of success came from the brain and spine service lines group. In reviewing performance and cost data, the group found huge variation in the cost of spinal implants. Under various reimbursement schemes, as much as 75% of the payment for the procedure was consumed in the cost of the implant while others were as low as 25%. As a result, the hospital started negotiating with vendors and has reduced that number overall to about 41%. The hospital realized a huge savings with that alone, Noren says.
As for the cost of the service lines program, “we pay for a few more meals, but other than that, the realignment didn’t cost anything,” he says.
Noren claims this organizational structure doesn’t create 21 new silos, but instead breaks down the barriers between employed and independent physicians as well as between physicians and the rest of the care team in an effort to focus on quality, transparency, and value. About 65% of the physicians practicing at Marquette General are employed. But Noren says little to none of the conversations in the meetings have anything to do with whether the physicians are employed.
“We do not equate employment with engagement in the concept of these service lines. There’s no distinction in voice or prerogative,” Noren says.
Matthew Hanley, MD, is vice president of medical affairs at Centra Health, which realigned its medical staff in a similar way over the past couple of years. The Lynchburg, VA–based nonprofit health system includes 358-bed Lynchburg General and 206-bed Virginia Baptist Hospitals; 93-bed Southside Community Hospital in Farmville is an affiliate.
Hanley implemented a shared governance structure for the emergency department. “We had open collaboration, were very data driven and transparency based, and we had a high level of accountability for results,” he says.