Landing a spot among the nation’s most-integrated health networks got a little harder for this year’s ranking. The healthcare industry’s strong finances, a growing move toward disease management and investment in information technology buoyed scores across the board—and boosted some organizations significantly—in an annual ranking of healthcare’s most efficient, best-performing networks by Yardley, Pa.-based Verispan, a healthcare data and consulting firm. The ranking, now in its 10th year, grades networks on integration using a 100-point scale based on health systems’ operations, clinical quality, efficiency and breadth of services. This year’s crowded field of strong contenders raised the bar for those hoping to land among the top 100, and left less room between top-scoring systems. “It got more competitive,” says Subhash Seelam, senior market manager for acute-care and integrated healthcare networks for Verispan, “which is healthy competition.” This year’s No. 1 organization—St. John’s Health System, Springfield, Mo., a six-hospital subsidiary of 17-hospital Sisters of Mercy Health System, Chesterfield, Mo.—skyrocketed from the 15th spot a year earlier. However, less than two points separated St. John’s score, 93.98, and those of its two closest competitors. No. 2, perennial high-scorer Intermountain Healthcare, finished with a 93.38 score. The Salt Lake City-based, 18-hospital system held its 2006 ranking and score, with a slight dip from 2006’s 93.7 tally. This year’s No. 3-ranked system—seven-hospital ProMedica Health System, Toledo, Ohio—slipped from first in the 2006 rankings, scoring 92.71, or nearly two full points down from last year. Kim Day, St. John’s president and chief executive officer, says the system’s score reflects results from its increasingly coordinated efforts to improve quality, safety and patient satisfaction. “It’s possible only in an integrated model,” which allows a system to leverage its size and align incentives among physicians and management, Day says. The cutoff score for ranking among the top 100 networks climbed to 75.3 points from 71 points last year, Seelam says, squeezing some systems out of the upper tier. Others saw improved scores, but their rankings slipped. Providence Health System-Oregon, based in Portland, dropped to sixth from the No. 4 spot in 2006, despite a three-point gain in its overall score. Another top 10 finisher, six-hospital Sentara Healthcare, Norfolk, Va., gained about 2.5 points but fell two spots to rank fifth this year. And 12-hospital University of Pittsburgh Medical Center dropped 10 spots in rank—landing at No. 22 in 2007—even though its score was more than a full point higher this year: 85.54 vs. 84.49 in 2006. Scores rose as a growing number of top 100 networks further centralized budgets, integrated technology and coordinated care such as disease management, Seelam says. Verispan surveyed 587 networks and received complete responses from roughly 200 eligible systems. Networks surveyed are those whose operations are jointly marketed and operated, either by common ownership or contractual agreement, Seelam says. This year’s report includes 18 new networks among the top 100. More returning systems saw scores rise than fall (43 vs. 34). The tighter competition reflects improved integration overall, Seelam says. The mean score rose to 81.65 in 2007 from 79.2 in 2006, Verispan’s data show. The rankings score systems based on integration of operations, financial performance and the composition—or scope—of services. The ratings use a total of 33 subcategories. Some 40% of networks’ integration score rides on greater integration via technology. Roughly one-third of the 2007 top 100 finishers scored higher on technology integration than they did a year earlier. Among this year’s top 100 finishers, 76% used electronic medical records compared with 72% a year earlier, Seelam says. |
Network news Networks also demonstrated widespread improvement in other areas: expanded specialty or service offerings and finances. Some 20% widened their network of specialists, Seelam says. Operating and profit margins rose notably as well. Performance on a key clinical integration measure—chronic disease management—also improved. Ninety-six percent of the top 100 networks demonstrated coordinated disease management, up from 87% in 2006. “It’s among the keys to integration,” Seelam says. St. John’s wasn’t the only system to ascend the rankings thanks to a radically improved score. Franciscan Health System, Tacoma, Wash., jumped 28 spots compared with 2006 to No. 8 in this year’s ranking after its score improved by slightly more than 10 points to 90.48. Franciscan—owned by 55-hospital Catholic Health Initiatives, Denver—operates 35 clinics and three hospitals; a fourth hospital in Gig Harbor, Wash., is under construction and is slated to open in June. Franciscan’s President and CEO Joe Wilczek says the system has continuously worked to standardize and, when possible, consolidate operations. “The reason you have a system is that you try to deliver efficiency throughout” its operations, Wilczek says. The system is four years into an eight-year effort to convert to EMRs, he says. In 2005, Franciscan completed a four-year effort to standardize forms used throughout its operations, and in 2006 it automated its central laboratory, Wilczek says. Meanwhile, Columbia St. Mary’s, a four-hospital system based in Milwaukee that is part of 69-hospital, St. Louis-based Ascension Health, jumped 50 spots to No. 50 this year from a 100th-place tie in 2006—thanks to a 9.5-point increase in the system’s score to 80.59. “The overall goal is to increase our value to our community, and truly to deliver healthcare the way it is meant to be,” says Therese Pandl, Columbia St. Mary’s executive vice president and chief operating officer. The system has made a deliberate, strategic effort to improve its across-the-board performance, from finance to safety to operations to customer service, she says. Like Franciscan Health System, Columbia St. Mary’s has focused its efforts on standardizing operations across its hospitals. “We believe reducing variation increases safety, and it is also more efficient,” Pandl says. For the first time, Verispan also ranked high-scoring systems among those not included in the 100 most-integrated networks (See related story, this page). The new ranking tier, the so-called “Best of the Rest,” was created to highlight high-performing systems from geographic regions that are typically underrepresented in the top 100, Seelam says. Midwest systems make up nearly half the top 100 each year, Seelam says. Northwestern and Southern networks regularly fail to make the list, because of the size of their markets, he says. The alternative ranking comprises 63 systems: 25 from the South, 17 from the Midwest, 13 from the Northeast and eight from the West. |
Steady climb This year’s three highest-ranked networks also experienced steady, organic revenue growth, rather than gains from mergers or acquisitions, Seelam says. Improved financial stability among the systems’ historically weaker operations raised the trio’s overall scores, he says. St. John’s also benefited from a stronger score on its operating margins, Seelam says. Patient revenue grew nearly 13% to $1.14 billion from $1.01 billion in 2005, says St. John’s Chief Financial Officer and Senior Vice President Jim Budzinski. The system’s operating margin rose to 3.3% in 2006 from 3.1% in 2005, he adds. Also, St. John’s score improved in a category where most in the top 100 lost ground: adjusted admissions, Seelam says. Budzinski credits the improved margins to better utilizing management among St. John’s health plan enrollees, overall growth in hospital volume and successful efforts to improve federal reimbursement for St. John’s rural hospitals by gaining critical-access designation. He called the gains “sustainable” and “consistent with our expectations.” Admissions rose thanks to local population growth, he says. “No mergers, no acquisitions,” he says. Inpatient admissions rose 1% in 2006 compared with a year earlier, Budzinski says. Surgery volume, which includes outpatient and inpatient procedures, increased 5% while emergency room visits rose 3% during the same period, he says. Enrollment in St. John’s health plan increased 5%, to 320,000 enrollees in 2006 from 305,000 lives in 2005, thanks to patient and employer preference, according to Budzinski. St. John’s debuted among the top 100 in 1999 at No. 62 and has risen steadily in the rankings with each successive year, landing in the top spot after its score jumped 10.17 points for 2007. St. John’s also saw higher scores on quality of service, capitated employer contracts and outpatient surgery ratings, Seelam says, as well as strong financial performance. Moody’s Investors Service analysts noted in September that the Sisters of Mercy’s Springfield, Mo., operations generated the most operating cash flow of any unit with in the 18-hospital system. Using Press Ganey Associates, a South Bend, Ind.-based patient-satisfaction consulting firm, St. John’s tracked and improved its patient satisfaction scores, which all ranked in the top 10 percentile for clinics and comparable hospitals for its fiscal year ended June 30, 2006. Inpatient satisfaction scores rose markedly between January and July 2006, climbing above the 90th percentile from the 68th, an “unheard of” leap, Day says. “It was an all-out effort to achieve the goal,” he says. The system also rolled out an electronic patient registry, developed internally, to monitor disease management. St. John’s successfully used incentives to boost patient-satisfaction scores, Day says. The system’s broad network of employees and services allows officers to direct priorities using incentives and track performance using widespread data collection. Integrated systems set common goals and share the rewards, he says. The patient registry, which St. John’s doctors began using during the past 18 months after four years of development, collects data on treatment and outcomes, which allows doctors to compare patients’ care against established clinical standards for disease prevention and maintenance, says Dominic Meldi, chief of staff for St. John’s Hospital, Springfield, and the system’s board chairman. Physicians’ incentives are tied to performance and patients’ outcomes, says Meldi, who adds he was initially skeptical of efforts to develop a tracking system in-house. Meldi now cites the registry as a “major asset” among clinicians, who can get concrete data on the health of their patients. “Sometimes it’s sobering to see poor performance,” he notes. |