As health enterprises have grown both horizontally and vertically in the past decade, they have almost invariably taken to calling themselves “health systems.” This term poorly describes what are in many places mere collections of health assets with a common brand name. The recent operating performance of many nationally known “health systems” begs some real questions about how measurable value is being created in their enterprises.
If health care leaders expect to reap benefits from their growth, their organizations must become actual systems of care. This will require that the enterprises do at least the following:
Be an operating company, not a holding company. Merely owning assets means nothing to patients and their families. It also does nothing to guarantee an acceptable level of financial performance. The assets a health system owns must work together in an organized way to provide a complete patient experience. They must share support staff and management reporting systems to reduce overhead, measure operating performance in a consistent way, and generate a return to capital above fixed and variable costs. Finally, the vision of health system’s leadership must permeate each and every piece of the care system.
At its core, be a clinical enterprise. The core of a health system should be a sentient clinical entity governed by the clinicians themselves, with system logistical and financial support. This means that its clinicians — whether they are employees, contractors, or independent practitioners — must collaborate in a consistent way across the system. The care they provide must be organized, not improvised. It must be driven by consensus best practice and grounded in the best available scientific evidence of what works. To drive results, the clinical enterprise should rely on strong professional values articulated by clinical leadership, not compensation formulae. Care performance should be constantly examined and continuously improved.
Provide patients and families with a seamless and consistent experience across the system. The health system may have dozens or hundreds of care sites, but patients and families should receive a consistently high-quality clinical experience regardless of who they are or where or how they enter the care system.
The pathways patients follow as they receive care should be “blueprinted” — that is, to the maximum extent possible, scripted in advance. That blueprint should be explained clearly to families at the beginning of their care experience. Families should understand their role they will play in the patient’s recovery and what to expect in the way of identifiable clinical risks. If the patient’s intended trajectory, care transitions, and controllable risks to that trajectory are not clear to the family, the care system has not done its job.
“Affirmatively control” the delivered cost of care. Affirmative control — or actively managing the cost of care — is impossible without timely and accurate information at the point of care, consensus among clinicians about what the best practices are, and consistent collaboration inside the care team to achieve it. The health system should assure that there is good communication among the members of the care team and that patients flow efficiently through the system. The team members must work together to minimize wasted professional time and eliminate avoidable clinical complications such as infections and medication errors that add both cost and patient risk.
To be an effective health system entails much more than geographic reach or a comprehensive portfolio of services. Portfolios do not take care of patients. It is the effective management of the clinical enterprise that distinguishes a true care system from a collection of assets. Peter Drucker told us more than two decades ago that the modern hospital is the most complex enterprise in our economy; its management is, thus, the most complex managerial challenge. The guiding hand of management, in partnership with enlightened clinical leadership, is essential for health systems to be sustainable.