"But you haven't added value if you're just doing it for referrals," he says. "You've merely locked in your referral patterns."
In competitive markets, your strategy should center on partnering those primary care physicians with specialists, postacute care, and disease management systems to add value at the level of the medical condition.
"If not, maybe in a few years, you're not competitive."
He argues that small store clinics, being high touch and low cost, can be managed by algorithm. Hospitals should think about partnership with such clinics to leverage the technology and the primary care physician to manage a team of nurse practitioners in storefront locations.
"These venues of care will be essential to being successful in this new system and will become really important as referral patterns are disrupted and access to primary care is disrupted."
Approach No. 3: The disruptor
Allen S. Weiss, MD, president and CEO of NCH Healthcare System—a Naples, Fla.–based 715-licensed-bed system with net operating revenues of $480 million—is seeking to be the disruptor as health reform accelerates. Even though NCH is only a two-hospital system, Weiss is seeking to collaborate, affiliate, and consolidate to remain relevant on both the low and high end of healthcare services.
As for competition from low-cost sites of care like storefront walk-in clinics, Weiss is thinking ahead to another revolution that may supplant the walk-in clinics: the home visit. But such visits will not be in person. Weiss makes the argument that existing in-home IT already allows home visits through Skype or other online means. Remote monitoring is also gaining acceptance and is proliferating, and regular in-home visits from nurse practitioners and physician assistants will be part of the home care revolution, he envisions.
"We need to be location-agnostic and take care of patients where it's most comfortable for them," he says. "Wouldn't you rather have care provided at home? Not being exposed to C. difficile and MRSA and other bugs has a lot to recommend it."
To develop a working model for such interaction, NCH is on the move. The leadership team has charged the system's CIO, CNO, and the chief administrative officer of the system's 100 outpatient providers to do checkups using Skype or Apple's FaceTime within six months.
"We have a fair number of patients who go home [away from Naples] in the summer," he says. "What if they could have virtual visits in the summertime? Why start up with a new caregiver?"
In August, NCH joined the Mayo Clinic Care Network, a collaborative with the famed Minnesota health system to address patient care, community health, and innovative healthcare delivery, but Weiss is under no illusion that it will secure NCH's future. In narrow operating margin industries, which Weiss insists healthcare is destined to become because of cost pressures, "you need economies of scale and scope," and that means an independent existence is not only impossible for a system like NCH, but is undesirable as well.
"We cannot persist independently when you've got to integrate the care we're providing to include prevention, patient engagement, and avoidance of hospitalization," he says.
More tangibly, the partnership allows NCH to introduce new methods of interacting for primary care that Mayo has already pioneered, such as the virtual visits idea.
Reimbursement for such innovations is often the first concern for leaders, but Weiss contends that worrying about reimbursement hampers innovation and cedes patient relationships to organizations that don't use third-party reimbursement as an excuse not to innovate.
"Right now, reimbursement for virtual visits will be cash, but in the very near future we're talking to the major insurers about getting paid," says Weiss, adding that in California, Kaiser Permanente, which has the luxury of its own captive health plan, already gets third-party payment for such interactions.
"We'd be getting $44 a visit versus twice that for an office visit," he says, but half is better than nothing, and doing a lot of work this way is frequently better for the patient. "About 80% of the office visits done right now by primary care can be done by midlevel providers, and 80% of what the midlevels do can be done over the telephone," Weiss says. "That means overall, two-thirds of visits can be done over the telephone by midlevels. Primary care practitioners will be captives of a team that includes a physician, a midlevel provider, an exercise physiologist, a pharmacist, and a dietician. This individual one-on-one doctor thing was adorable for 1980, but it's not going to work in 2020. Neither the government nor this nation can afford it."
This article appears in the June issue of HealthLeaders magazine.