With the passage of the Affordable Care Act (ACA), new pressure has been placed on health systems, encouraging a different approach to care. New opportunities in health and community care are available at Accountable Care Organizations (ACOs), and some executives are leaping at the chance to develop something new and stay ahead of the curve.
“Even before the ACA was passed, we had started to organize a clinically integrated network of physicians,” says John Grigson, chief financial officer of Covenant Health Systems and chief executive officer of Covenant Health Partners in Lubbock, Texas. Covenant Health Partners was recently certified as an ACO by the government.
When Grigson first came to Covenant Health Systems almost seven years ago, there was already a vision of moving from acute care to eventually offering a continuum of medical services and being responsible for community health.
“Insurance companies cannot manage the health of populations. Only Physicians can.”
“The core of managing community health is high-quality care and patient satisfaction,” says Grigson, “and we want to be the essential health system in our market.” In order to become the best, Grigson immediately had the physicians working on quality, preparing them for the holistic and cohesive health standards of ACOs.
Not His First Rodeo
Grigson served Cook Children’s Health Care System in Fort Worth, Texas, for several years as chief financial officer. During his time there, he helped create a health plan for the hospital. “Creating a health plan was a way to protect the revenue base of the hospital and ensure the hospital stayed in a healthy position,” he says.
With his previous experience in mind, Grigson moved quickly on arrival at Covenant Health Systems. Covenant Health Partners began managing the employee population at Covenant Health Systems. Grigson also set up committees to review the usage of pharmaceuticals, the emergency department, and other services that had been identified as overutilized. This resulted in cost savings for Covenant Health Systems and gave physicians the experience of caring for community health as a network by offering high-quality care to a narrow segment of the population.
Building on a Solid Foundation
With this momentum in place, Grigson has led Covenant Health Systems in focusing on three primary areas of development: population health management, physician partnership, and a complete network of care. “Insurance companies cannot manage the health of populations,” says Grigson. “Only physicians can.”
In order to enable physicians to provide for a complete health solution for the population, Grigson implemented technology solutions, encouraged physician engagement, and emphasized high-value care. The idea was to offer the complete solution for patients and physicians. “We need to organize and integrate all providers and services you would expect in a complete continuum of care,” he says.
The underlying focus to all of these initiatives has been increasing the value of care for the patients and quality of care by physicians. In Grigson’s equation, “low-cost services plus high quality of care and high patient satisfaction equals value.” He also stresses that if value is missing, then Covenant Health Systems is missing the mark.
Setting the Right Pace: From Volume to Value
For the value proposition to work, systems and mind-sets have needed to change, and the finances need to be in place. As a CFO, Grigson confesses this is a challenge to balance. “While the volume of patients is dropping on one side, we are having to invest money in the population health side,” he says, noting the goal of reducing health system use due to better overall community health.
Grigson’s primary success has been physician participation. “We’ve been able to engage our physicians and create the infrastructure they need to begin this journey in being more responsible for managing health,” he says. An incentives program has discouraged overutilization and has encouraged transparency and healthy peer pressure.
Grigson’s current challenge is the pacing of the changes he and others are making. Moving from a model based on the volume of patients to a model based on the value of quality care and satisfaction is not a quick change. “We’ve started with changing the mind-set of employees and partner physicians,” says Grigson. Pacing is also important for financial and communal reasons: moving too quickly can raise costs and strain the budget and morale.
Moving Forward: Volume and Value
Grigson believes that if his two organizations are doing good work, they will create savings for patients and hospitals. “At the end of the day, we need to be the best,” he says. “If we provide the highest quality and satisfaction at the lowest cost, everyone will want to use us.”
That is Grigson’s long-term strategy: gaining market share by offering a complete continuum of high-value medical services to the sixty- two counties and 1.2 million people that the health system serves. With a continually growing list of value-based medical services, Covenant Health Systems and Covenant Health Partners have already expanded into the local health plan market as a cost-effective solution. Revenue will increase by keeping services in network and partnering with other high-quality, low-cost local providers. “It takes a whole community strategy to accomplish what we’re doing,” Grigson says.