State’s Big Health Systems Collaborate on Costs, Care

Milwaukee Journal Sentinel (Wisconsin)

August 12, 2014

Copyright 2014, Journal Sentinel Inc. All rights reserved.

Aurora Health Care and five of the state's other largest health systems have created a partnership with the goal of working together to improve healthcare quality and lower costs.

The partnership—announced last week and yet to be named—also hopes to contract with health insurers to provide a statewide network of hospitals and clinics.

"This is real evidence of the traction and the change in the evolution of healthcare," said Nick Turkal, chief executive officer of Aurora Health Care.

In addition to Aurora, the partnership's founding members include Aspirus in Wausau, Bellin Health in Green Bay, Gundersen Health System in La Crosse, ThedaCare in Appleton and UW Health in Madison.

The idea is for the six health systems to share their best practices for improving quality and eliminating waste. For example, the health systems could share clinical guidelines rather than have each system develop its own.

"Why do it six times if you can do it well one time for the whole state?" Turkal asked.

Health systems have long collaborated on initiatives to improve quality or lower costs. What distinguishes the partnership announced Wednesday is its scale and scope.

"This level of coordination across a state may be unique," said Rich Yurkowitz, a health benefits consultant and actuary with Aon Hewitt, a benefits consulting company.

The six health systems have combined annual revenue of more than $9 billion, and their hospitals and clinics are accessible to about 90% of Wisconsin's population. They also have operations in Illinois, Iowa, Michigan and Minnesota.

The new partnership hopes to contract with health insurers, and the statewide network could appeal to national and government employers.

"It would be a convenience for employers to contract with one insurance company and have the state covered," said Alyce Katayama, a partner and healthcare lawyer at Quarles & Brady LLP.

The combined health systems, she added, "have a very impressive footprint."

The six health systems now belong to the narrow, or "focused," network of a health plan offered by Anthem Blue Cross and Blue Shield in Wisconsin.

The systems eventually hope to negotiate contracts jointly with all health insurers, said Greg Devine, a senior vice president of ThedaCare, who will be the president and chief executive of the partnership.

That could increase their bargaining power in contract negotiations with insurers.

The partnership could spur other health systems to come together to set up their own statewide network, Katayama said.

Integrated Health Network of Wisconsin, a competing consortium, plans to offer its network to health insurers and employers this year. The consortium includes Froedtert Health, the Medical College of Wisconsin, Columbia St. Mary's, Wheaton Franciscan Healthcare, Agnesian Health-Care and Ministry Health Care.

The network's members also plan to work together to improve quality and lower costs.

But Integrated Health Network doesn't have a statewide presence, and some of its former members, such as ThedaCare, now belong to the new partnership.

The new partnership plans to start by developing a scorecard of sorts based on hundreds of quality metrics to identify initial areas for improvement, Devine said.

He acknowledged that health systems don't lack for initiatives and projects designed to improve quality or lower costs, and how many of those an organization can take on at one time is a challenge.

ThedaCare has a committee charged with helping to set priorities.

"We've been there," Devine said. "We understand the challenges."

But he said the health systems' chief executives and other executives are committed to the new partnership.

"They recognize that there is a great value that we can a deliver to the state by working together," Devine said.

Gundersen Health has an international reputation for end-of-life care, for instance, while Aurora is known for its cardiology care.

"We can be better together," said Mark Platt, senior vice president of business services for Gundersen Health System.

The partnership also could help lessen the variation widespread in healthcare.

Yurkowitz praised the health systems for collaborating.

"This may say something about the state of Wisconsin," he said.

Each organization in the partnership uses software from Epic Systems Corp. in Verona for its electronic health records, though the systems typically are configured differently.

"There absolutely are economies of scale if we could move to one Epic (system)," Devine said.

That could require substantial changes for the people using the systems.

All of this is in the earliest stages. But Turkal of Aurora said the partnership probably would not have happened a decade ago.

"This is real evidence of progress in reforming healthcare," he said.

The original headline for this article was: State's big health systems partner up: Aurora, UW Health, four others to collaborate on costs, care

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