How Your Hospital Can Tailor A Value-based Strategy

Hospitals & Health Networks, By Howard Larkin, May 12, 2016

"Although global budgeting and full capitation are not possible for many hospitals, some are taking a slower path toward transitioning to value-based services. Even still, these moves create value gains and help to build the infrastructure to go further.

It was an ambitious decision even for an organization as big and robust as Intermountain Healthcare: to lower its target for patient care revenue by $700 million. But to get ahead of the shift from fee-for-service to value-based care, Intermountain leaders decided that this was exactly what was needed to control its own destiny.

Rationing or withholding care beneficial to patients was a nonstarter. Instead, Intermountain leveraged its pioneering work in clinical process improvement and advanced IT to transform itself. Using a global budgeting approach that could serve as a model for health systems across the country, Intermountain revamped operations throughout its Salt Lake City-based system, which includes 22 hospitals, a health insurance subsidiary and about 1,400 employed physicians at more than 185 clinics serving most of Utah and southern Idaho.

The result: Intermountain is on track this year to meet that $700 million target — 12 percent below its previous income trend."

The inspiration for the changes was sparked by a Harvard Business Review article co-authored by Laura Kaiser who is the CEO of Intermountain, and Thomas Lee, M.D.