How Health Care Is Organized - II: Health Delivery Systems

Second-generation HMO's (Virtual Integration):

Health plans contract with: •Many groups of physicians and specialists •Multiple hospitals •Multiple pharmacies •Multiple home health agencies

Accountable Care Organizations (ACO's)

•ACO - A provider-led organization whose mission is to manage the full continuum of care and be accountable for the overall costs and quality of care for a defined population •The Affordable Care Act authorized Medicare to initiate an ACO program beginning in 2012 •The number of ACO's in the US has risen dramatically since 2010 and is projected to cover 70 million lives by 2020 •Span a spectrum of organizational structures

From Medical Homes to Medical Neighborhoods

•Contributes to the care of a population of patients •Includes primary, secondary and tertiary care •Related services needed by different patients at different times to meet their comprehensive health care needs •Provides care that is functionally integrated but not necessarily structurally integrated

Physician Hospital Organizations (PHO's)

•Developed as an alternative to the IPA model •Physicians partner with a hospital to jointly contract with health plans for both physician and hospital payment rates •Physicians are independent practitioners on the hospital's medical staff and physicians directly employed by the hospital

Preferred Provider Organization (PPO)

•Developed partially in response to reluctance of many patients to be locked into utilizing a limited panel of physicians •Physicians joining a PPO agree to accept discounted fees hoping that by being listed as a preferred provider they will attract more patients to their practice

Second-generation HMO's (Virtual Integration): Network model HMO's

•Easier to organize than prepaid group practices •A hospital or insurance company could recruit office-based, fee-for-service physicians practicing in the community into a network •Physicians can continue to see their non-HMO patients •Physicians can establish contractual relationships with numerous HMO's and IPA's

Vertical integration

•Often everything is available under one roof (physician, lab, x-ray, pharmacy, specialists) •Consolidating under one organizational roof •Common ownership of all levels of care from primary to tertiary care Common ownership of the facilities and staff necessary to provide the full spectrum of care

•Kaiser-Permanente

•Physicians paid salary •Hospitals utilize global budget •Regionalized tertiary care services

Structurally integrated organizations

•Primary care groups •Multispecialty groups •A unified electronic medical record •Interdisciplinary health care teams •A quality improvement infrastructure

Independent Practice Association (IPA

•Serves as broker/middleman on behalf of physicians •Negotiates and administers contracts with HMO's and other types of health plans

Integrated Medical Groups (IMG's)

•Tighter organizational structure •Physicians are employees, do not own their practices •Can have contractual agreements with multiple managed care plans and HMO's •Physicians can care for out of network patients

Comparing Vertically and Virtually Integrated Models: Vertical

•Vertical - first generation - staff model HMO (and group model HMO) •Vertically integrated HMO's •Often use web-based "patient portals" to facilitate communication between physicians and patients •Can improve patient satisfaction (patients feel that their physician knows them well) •Can be an obstacle to patient satisfaction (fewer choices in where care and services will be covered)

Comparing Vertically and Virtually Integrated Models: Virtual

•Virtual - second generation - network HMO - Utilizes IPA, IMG's, PHO's •Virtual = contractual links, no brick and mortar, no common ownership •Virtual - physicians can see IPA and non-IPA patients