Hospital Consolidation Gets a New Playbook

Philip Betbeze, for HealthLeaders Media , February 14, 2013

In fact, the goal has become to keep the patient out of the hospital through a combination of careful maintenance and a more hands-on approach to treating patients after their hospital stay is over, or with an eye on managing their condition such that they don't have to visit the hospital at all. The idea is that's where Healthways and its capabilities come in.

Texas Health is betting that disease management pioneer Healthways, led by CEO Ben R. Leedle Jr., can serve as a similar pivot point for the health system to make needed interventions on a targeted set of high-cost patients—very similar to what Montefiore developed years ago with its CMO—The Care Management Company.

"We'll be working with them to strengthen and expand—on a service line basis—support for people with chronic disease," Leedle says. "We'll intensify care transitions postacute to reduce readmissions likelihood and partner with them on direct-to-employer marketing of these capabilities."

Hawthorne says the speed of the transition is one reason such partnerships have become so important.

"We know what we do well. We've had remarkable outcomes caring for people at the tertiary level, but as we get into areas of moving the model to more of a health model than a sickness one, to create from scratch all the pieces that are now readily available in an organization like Healthways was not attractive," he says. "Speed and agility and confidence in a partner were important. We didn't have the expertise or time to create this ourselves."

Leedle says other health systems will be looking to answer the same value question as they take on risk, and Healthways hopes to develop similar long-term contracts with geographically diverse health systems with size and scale. That geographic exclusivity, however, would preclude it from doing similar deals with close competitors in the same areas, for example, that Texas Health serves.

Leedle envisions a partnership that can demonstrate differentiated value over the competition, and even speculates that health systems that prove they can deliver better quality at a lower price have a significant opportunity to offer large employers. "This work is filled with potential channel conflict and tension, but in the end, we're headed to a marketplace where large employers will demand the very best value, and we think they'll sort out where that best value proposition is coming from."

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This article appears in the January/February 2013 issue of HealthLeaders magazine.

Philip Betbeze is senior leadership editor with HealthLeaders Media.
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