Center for Studying Health System Change

he organizational changes described above appear to have some effect on administrative integration but a more limited impact on clinical practice. Current efforts at administrative integration seem to vary among area hospitals. For example, the Sparrow System has centralized many of its administrative functions across the hospital and other entities and is in the process of developing a new information system and electronic medical records to support its efforts to become an integrated delivery system. MC², whose most recent merger is now five years old, is just beginning to integrate its administrative and clinical operations. MC²’s major concerns are integration of the separate medical directors and staffs remaining from the two hospitals that formed this new entity and development of a common culture. Administrative integration is expected to escalate with major upcoming major organizational changes at MC² and Sparrow/St. Lawrence.

A major factor related to clinical practice has been the initial purchases of physician practices and the more recent reconsideration of this strategy. Hospitals believe this strategy has achieved limited success and are considering other approaches, including introduction of financial incentives and guidelines to which physicians will be held and development of physician office space on or near hospital campuses.

Despite the recent emphasis on data and information, there is relatively limited clinical management or use of clinical tools, and clinical integration and care management are viewed as being in the "embryonic stage." With few exceptions, Lansing providers and plans appear to have neither the financial incentives nor the technologies to support changes in clinical practice. Moreover, the current overlap in networks and limited formal referral arrangements contribute to this environment. In general, providers cannot track patients across settings or entities, and clinical information systems and electronic records are just now being developed. However, efforts by selected plans and hospital systems are now underway to develop a more extensive emphasis on clinical management, such as using Health Plan Employer Data and Information Set (HEDIS) measures to initiate quality-monitoring efforts and development of a physician profiling system by BCN, which will include financial incentives and penalties. At the system level, Sparrow has a quality improvement program that is designed to address reductions in length of stay for such high-cost patients as burn and trauma with more appropriate use of outpatient settings and primary care physicians. BCN is piloting a disease management program with a focus on conditions where hospitalization can be avoided. In the future, it is expected that purchaser interests in identifying and addressing the quality of care in the Capital Area may influence practice.

The Lansing market has a strong emphasis on primary care and prevention and health-promotion activities. The primary care emphasis is being supported further by the growth of Medicaid managed care and commercial enrollments in HMOs. The health department is taking a leadership role in addressing prevention and health-promotion efforts using the broadly representative Health Status Advisory Group and task forces to increase the clinical emphasis on these efforts. In addition to the participation of many sectors on this committee, there is also support for these activities from providers and plans with several of the systems emphasizing wellness strategies. With the planned merger of Sparrow/St. Lawrence, competition related to wellness services is likely to escalate as the new entity and MC² use its wellness programs to compete with each other.