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Can You Get Coordinated, Patient-Centered Care from a Team of Vendors?

By Brian Schilling

Observing that the health care system is fragmented is a little like observing that it's too expensive: everybody already knows. But a fragmented system doesn't have to mean fragmented care. According to two experts interviewed by PHP, there are five key things employers can do to make sure employees get top-quality care, regardless of what the patchwork of health care vendors might look like. PHP talked to Jerry Burgess, CEO of Healthcare 21 (an employer-based nonprofit coalition and member of NBCH that works with various stakeholders to improve health care and health care purchasing), and Chris McSwain, director of Global Benefits at Whirlpool Corporation, to get their perspective on the challenge of integrating care from diverse teams of vendors. They offered these five key pieces of advice:

Get Everyone Together in One Room
At least once a year, both McSwain and Burgess recommend bringing hospitals, health plans, disease management firms, behavioral health suppliers, pharmacy managers, and other vendors together for a full day to make introductions, identify and discuss issues, set goals, and resolve problems. For a company like Whirlpool, which contracts with somewhere between 15 and 25 vendors to provide benefits, just making introductions can be valuable.

"It's a mistake to assume that your vendors are talking to each other or are even aware of how they're each serving the same population," said McSwain. "Bringing people together helps establish channels of communication that are essential when issues come up and for driving integration across vendors."

Those issues can range from relatively simple data transfer or referral questions to more thorny matters related to coordinating different treatment approaches or even ironing out revenue-sharing agreements.

"There's no shortage of things for people to talk about," says Burgess. "The point is not to solve every problem, but to get everyone together to start these conversations."

McSwain holds a health care summit for all Whirlpool health vendors once a year where—among other things—they talk about how to optimize the handling of mock patients. Burgess holds a similar annual event, but invites employers, physician representatives, and others to participate as well. For more about structuring such an event, read McSwain's paper on the subject (written while at a previous company) here.

Think of Your Vendors as a Supply Chain
Burgess cautions benefits managers against the dangers of getting overly comfortable with either vendors or brokers. And with more than 30 years of experience on both ends of the vendor/purchaser relationship, he's seen enough to know that getting too comfortable with the status quo is problematic.

"You need to think of your vendors as being part of a supply chain that ultimately delivers a service: health care," said Burgess. "Your job is to make that supply chain as strong and as efficient as possible. If you're contracting with an organization because their rep is fun to golf with, then you're doing something very wrong."

McSwain thinks in supply chain terms as well, but also cuts a distinction between what he refers to as vendors, suppliers, and partners. "Of course, we prefer to work with organizations that will help own problems when they arise. And even better—we like to see organizations working proactively to avoid problems and find new efficiencies. You can't get that with silo'ed vendors that don't talk to each other."

According to both McSwain and Burgess, the industry standard leaves a lot to be desired. "Most HR shops do not have supply chain management as a core competency and that's a miss—you need to be able to think about health care delivery as a process from beginning to end and look at all the steps in between to make sure the chain is being well managed, with special focus on all the points where employees actually receive care," said McSwain. "It's not just checking a box, yes, my employees have access to mental health care. It's, 'How does that care fit in with the rest of the chain to improve the health and productivity of our employees?'"

Measure, Measure, Measure
McSwain started last year's summit by saying, "Congratulations—how your organization performed last year got you into the room. What you do together will keep you in the room year after year." The clear message: Whirlpool will be measuring performance and integration between vendors. Those that don't measure up may not be asked back.

For some vendors—hospitals and health plans in particular—widely accepted processes already exist for measuring and comparing performance. Burgess recommends making sure any hospitals serving your employees participate in the Leapfrog Hospital Survey initiative, a measurement effort created by and for employers. For health plans, NBCH's eValue8 tool acts as a sort of clearinghouse for data from more than a dozen different sources, including accreditation information, performance data, satisfaction survey results, and more. These and other such tools allow employers to see not just how vendors are performing now, but to track progress over time.

"You want to see forward progress for all your suppliers every year," says Burgess. "And you want to be able to hold them accountable for what they're selling you."

Pay for Results
Both McSwain and Burgess are believers in the get more/pay more approach to compensating suppliers. Burgess advocates building performance bonuses into contracts up front so there's no ambiguity about what's expected and what the potential payoff might be for strong performance.

"We know that we're asking a lot of our vendors," said Burgess. "Quality improvement is a complicated process that costs money, so by setting up an meaningful incentive you're saying to the vendor that their investment in QI is worth it and it's worth something to you. That's the right message."

Whirlpool takes a similar approach, building operational and clinical performance targets and related bonuses into every contract. Going forward, the company plans to emphasize outcomes-based contracting whenever appropriate.

Think Long Term
Finally, both Burgess and McSwain emphasize the need to think long term with respect to managing vendors along the length of the health care supply chain.

"The notion of a benefits manager as someone who hands out candy is long gone," said Burgess. "You don't want a benefits manager to be warm and fuzzy, you want him or her to think like a business person whose job it is to manage the cost of the health benefit and to manage the risk of the covered population. You can't do that if your suppliers change every year."

Burgess is a believer in applying standard quality improvement processes (removing defects, reducing variability) over a long period to realize dramatically improved results. But the process takes time.

No process is too big or too small to warrant attention. "Every time something goes wrong, it's an opportunity to learn and do better next time," he says.

"At Whirlpool, we know successful relationships require hard work from all sides," says McSwain. "We challenge ourselves to help our partners find win-win outcomes. When this happens the biggest winners are our people, whom we consider our greatest asset."

While neither advocates for contracts with terms beyond a few years (three or less is a good guideline), both believe that stability among suppliers is crucial to getting good care and good value for the investment in health care.

Note: Jerry Burgess regularly leads seminars at the NBCH-supported College for Value Based Purchasing. Chris McSwain will be a featured speaker at NBCH's 2010 annual meeting in November. To view a calendar of upcoming NBCH meetings, visit our Web site .

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