Standard Setters

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With a growing number of hospitals expanding their service lines and consumer-driven care seeing increasing popularity, payors are seeking ways to monitor program quality and cost as providers jockey for position. Performance designations can help both sides by creating a rigorous evaluation process to determine the cream of the crop.

Designations of excellence are zealously pursued, jealously possessed and, at times, shamelessly promoted—with good reason. Earning these badges of honor takes clinical dedication and financial commitment, but the boost in stature often justifies the outlays of money and energy. “It’s not just something you can do overnight. It takes a lot of hard work and the evolution of a team of individuals that work well together,” says Tom Gammiere, CEO of 700-licensed-bed Scripps Mercy Hospital in San Diego. “From a business perspective, it’s kind of a feather in your cap—a way of designating that all the hard work has paid off.”

Bariatrics boom

According to the American Society for Bariatric Surgery, 170,000 Americans had weight-loss surgery in 2005. With bariatrics becoming less invasive and success stories on the rise, stomach-shrinking procedures are hotter than ever.

The four surgeons in the San Diego-based Pacific Bariatric Surgical Medical Group have performed more than 9,000 surgeries in their 12-year history. Scripps Mercy’s bariatric program is a joint undertaking with the group. In October 2005, the program was deemed a center of excellence by the Surgical Review Corp., which evaluates programs in conjunction with the ASBS.

And now the stakes have risen even higher in the bariatric world. In February, the Centers for Medicare & Medicaid Services announced a new policy that covers only surgeries performed at centers designated by the ASBS or the American College of Surgeons.

Experience preferred

Payors are joining professional organizations in honoring quality at a growing pace; Scripps boasts bariatric designations from both Blue Shield of California and Blue Cross of California. Payors want to know that a service is achieving positive, sustainable results, says Gammiere. “The more you do, the better you get at it,” he says.

Although certain injuries and illnesses can be treated at any hospital, Tunde Sotunde, M.D., UnitedHealthcare’s senior medical director for Arkansas and Tennessee, says when it comes to high-tech and complex procedures, “where you go can make a whole lot of difference.”

United’s cardiac care “premium designation program” incorporates standards from CMS, the Leapfrog Group and the Joint Commission on Accreditation of Healthcare Organizations. “We’ve made a conscious decision not to develop any internal standards or benchmarks, because the thinking is that it’ll be more readily acceptable if the standards that we use come from nationally recognized bodies,” Sotunde says.

United’s designation process considers a hospital’s range of services, patient volume, staff experience and protocols. But United also considers cost. Sotunde says the process evaluates efficiency factors that can impact the overall cost of care, including the level of care delivered before a procedure, what the hospital experience is like and the depth of follow-up care.

Insurers’ motives have been questioned by providers who feel too much of their influential decision rides on cost. But Sotunde sees it differently. “This is not a network within a network. We’re trying to provide broad access, but at the same time we’re providing information in terms of which providers have demonstrated that they are top performers from a quality and efficiency perspective,” he says.

The payoffs

The excellence title can help attract new business when potential patients realize the significance of the designation, says Gammiere. Designation doesn’t automatically translate into higher reimbursement rates, but the preferred provider label can increase patient volumes.

“It definitely is to our advantage in order to get contracts with carriers, because they come to us,” says Pacific Bariatric surgeon Eugene Rumsey, M.D. Rumsey cites increased hits on the practice Web site, a greater volume of phone queries and higher attendance at practice-led informational seminars as proof that the designation has impacted the practice.

It’s too early to tell whether the payor designations will drive in significantly more patients, but Gammiere believes it will be more difficult in the future for programs to sustain the necessary levels of patient volume and quality without payor support. On the horizon, payor designations may even offer direct monetary benefits to distinguished providers. At the end of 2006, United will roll out a “practice rewards” program that offers a financial bonus to providers who receive the designation.

The designation may draw potential employees, as well. Pacific Bariatrics isn’t in the market for a new surgeon, but the designation has boosted its recruiting power. “If a new recruit were looking at a place that was not certified versus one that was, I don’t think there’d be any ambivalence as to which program he’d want to go to,” says Rumsey.

The designation also offers validation to the medical team. Hospitals and physicians can laud their own services, but Rumsey says confirmation from an independent group gives patients an unbiased opinion. “Advertising campaigns only go so far,” Rumsey says.

Out of the Gate

To make the most of their investments, hospitals consider the designation possibilities at the earliest stages—even before the ground is broken on a facility or a new service line is commissioned. These days, when Herbert C. Hoover, M.D., chief of surgical oncology and director of the new Nancy N. and J.C. Lewis Cancer & Research Pavilion at Savannah, Ga.-based St. Joseph’s/Candler health system, is not calling on referring physicians, he’s focused on another goal: establishing the facility as a leader in cancer care.

The 56,000-square foot, $24 million center, which opened in January 2006, is too small and not equipped to handle the research required to be named a National Cancer Institute comprehensive cancer center, so Hoover is seeking other options for smaller facilities that excel. The oncology veteran is also looking within the state for opportunities to improve the center’s prestige. St. Joseph’s/Candler’s cancer registry is one of eight recognized by the Georgia Comprehensive Cancer Registry for excellence in data reporting, and the center has been selected by the Georgia Cancer Coalition as a demonstration site for an initiative that will analyze the Institute of Medicine’s quality indicators.

Hoover’s experience is a plus in the effort. His last hospital, Lehigh Valley Hospital in Allentown, Pa., where he was deputy director of the cancer center, underwent the NCI designation process. The support of hospital leaders is also important. “You can’t do this without a clear backing from the board and CEO,” he says.

Kara Olsen is a staff writer with HealthLeaders magazine. She may be reached at




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