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•Hospitals and Integrated Care
–
•Strategies
for
success
•Stefan Brandt
Jan Hartmann
Sorcha McKenna
Nina Strenitz
•EMEA Hospital
CEO conference
•Paris, April 7, 2011
•CONFIDENTIAL AND PROPRIETARY
•Any use of this material without specific permission of McKinsey & Company is strictly
prohibited
•Just before we start, this is our understanding of Integrated Care
•Integrated Care is ...
•... the significant, holistic improvement
•in the efficiency and effectiveness of care...
•... for a clearly distinguishable patient or
group of insurees ...
•Does this
reflect your
own understanding of
integrated
care?
•... across sectoral boundaries
(e.g., ambulatory and hospital care,
connecting health and social care)
•McKinsey & Company | 2
•From fragmentation to cost-effective integration – just a vision?
•From today's reality ...
 Broken treatment chains and
self optimization of each player
•... to a vision for 2020 !
 Enforced pathways and guidelines
for effective, efficient seamless care
 Fragmented funding sources
 Evidence-based funding still rare
 Funding: combined sources
and
evidence-based mechanisms
 Fragmented provider landscape
 Ad hoc communication between
providers and to other players
 Integrated players (e.g., hospitals
and physician networks) with
excellent IT systems and
communication
 Lack of aligned incentives: care
management often initiated only due to
short-term, start-up financing
 Attractive and aligned incentives
for successful long-term care
management
•McKinsey & Company | 2
•External
long-term
momentum
•There arepressures
5 models creating
for hospitals
to integrate
into primary careFocus today
•and opportunities for Integrated Care
•Increasing system pressure
 Less funding available, increasing need for
efficiency to keep profit margins
 Increasing demand for higher quality, enforced by
publishing rankings and evaluations
 First efforts to establish outcome-based pay-perperformance models
•Increasing market pressure and competition
 Outpatient care becoming proven treatment
for chronic diseases (e.g., through DMPs and
compliance programs)
 Increasing specialization of competition
 Rapid development of technology and IT as
an enabler for out-of-hospital care
•Hospitals need
to deal proactively with
challenges and
opportunities of
Integrated Care
•SOURCE: Global Prevalence of Diabetes, Diabetes Care, 27, 1047-1053; Expert interviews; McKinsey McKinsey & Company | 3
•McKinsey & Company | 4
•There are 5 models for hospitals to integrate into primary careFocus today
•Mode
l
•Gain market share
•1 through primary
care integration
•Be active part of
• 2 an Integrated
Care network
•Policlinics for
• 3
secondary/tertiary
care
•Integration of
• 4 primary care
for research
reasons
•5 •Assume full risk in
integrated system
•Description Example
 Take the lead in highquality, primary care, profiting
from economies of scale and
increased referrals to hospital
 Rhön Clinics (Germany)
 Be integral part of a payor/
provider network and benefit
from trans-sector pathways as
"first mover"
 Knappschaft (Germany)
 Geisinger (US)
 Kaiser Permanente (US)
 Extension of services offered
in policlinics to secondary and
tertiary care, including
interventions
 Cleveland Clinic (US)
 AMCs tend to incorporate
primary care, to cover complete
care pathway for translational
research
 Harvard, Duke (US)
 Assume risk for entire
health-care region, providing
high quality care along the
entire value chain and
reducing avoidable
hospitalization
 Valencia (Spain)
 Other integrated
payor/ provider
systems
•McKinsey & Company | 4
Rhön-Klinikum is strongly increasing their activities
in primary
through policlinics
(MVZ)
•There are
5 modelscare
for hospitals
to integrate
into primary careFocus today
•Rhön's activities in primary
care
•Objective Make Rhön inpatient and
outpatient care available throughout region
 Care structure created with 3
levels Hospitals
MVZ day clinics and
Integrated telemedicine (“teleportal
clinic”)
:
–
•–
•
–
•Number of MVZs owned by Rhön-Klinikum
•1
0
•20061
•+50%
p.a.
•2
•1
0
4
•07
1
•08
1
•5
1
•2
6
•09
1
•20102
•Impact of Rhön's activities in primary care
•Marketing effect
 Positioned as provider of seamless,
integrated medical care
 Greater brand awareness
•Treatment chains
 Higher hospital occupancy rate due to
targeted transfers from own MVZ
 Better utilization of hospital resources
(e.g., thanks to outpatient surgeries
performed by MVZ physicians)
•MVZ contribution
 As of now, revenues and earnings low
compared to those for company overall
 MVZ EBIT: EUR 0.2 million (2009)
 Overall revenues: 13.3 million (2009)
•1 End of year
•2 As of 01/20/2011
•SOURCE: Company website; press research; McKinsey
•McKinsey&&Company
Company
•McKinsey
| 5| 4
•Rhön's strategy in primary care focuses on co-locating
•their MVZ with their hospitals, both regionally and locally
•Number of facilities of Rhön-Klinikum, by
region
•6
•Hospitals and MVZ in Bavaria
•Bavari
•1
a
1
•MVZ Hospital
6 •Location
•1
•Lower
•Erlenbach am
0 •1
Saxony
Main
1
•6
•Kipfenberg
•Saxon
•7
y
Kronach
•5
•Saxony
•Bad Neustadt
-Anhalt
•7
a. d. Saale
•4
•Hessi
•5
•Bad Kissingen
a
Hammelburg
•4
•Thuringi
•5
Miltenberg
a
•2
•BadenMunich
•2
Württemberg
•Dachau
•1
•Brandenburg
•Markt
•1
Indersdorf
•1
•Mecklenburg•0
Vorpommern
•MV
Z
•Hospitals
•"We are working
towards having
outpatient structures
around our inpatient
locations to ensure
better care for patients
in the region"
•Rhön-Klinikum; report
Q3/2010
•1 Some locations with more than 1 hospital and/or MVZ
•SOURCE: Company website; McKinsey
•McKinsey & Company | 6
•Rhön's MVZ contribute significantly to the number of
•patients, but their financial contribution is not yet significant
•
•Contribution of Rhön's MVZ to the total result
of Rhön Group1
•Percen
t
Number
of
patients
Revenues2
EBIT2
•
11.8
0.6 EBIT from MVZ: EUR 0.2 Mio.
vs. EBIT from all operating
units3: EUR 205.2 Mio
0.1
•Profitability (EBIT margin)1
•Percen
t
•MVZ 1.5
•A significant number of
Rhön's patients are treated
in its MVZ
•Yet, MVZ contribute less
than one percent to both
revenues and EBIT
•Profitability for MVZ is low
•However, no data available
on spill-over effects of MVZpatients for hospital
business
•Rhön Group 7.8
•1 01/2009-12/2009
•2 Isolated for MVZ
•3 Hospitals, MVZ and service companies
•
•SOURCE: Rhön-Klinikum (annual report 2009); McKinsey
•McKinsey
•McKinsey && Company
Company|| 78
•Knappschaft succeeds in directing their insureds into
•their own inpatient facilities using the Prosper networks
•Prosper – KBS's IC networks
•Impact of KBS's activities in IC
•Infrastructure
•Example: KBS-Hospitals in North RhineWestphalia (NRW 2009)
•Share of KBS-insured patients1, percent
 ~ 200,000 patients in 6 networks
 ~ 2,000 physicians
 11 acute and 2 rehab hospitals
•Obligations of providers and patients
 Providers must comply to
clinical
pathways and use network IT
 Patients must use providers within the
network if services available
•Incentives for providers and patients
 Hospitals keep part of efficiency savings
achieved due to pathways
 Professional and quality circles for
knowledge exchange
 Reduced waiting times for patients
 Patients exempted from co-payments
•Bochum-Langendreer
•1
5
•Bottro
p
•Dortmun
d
•Klinikum Vest
•1
7
•BK
B
•MZK Aachen
•Kliniken Essen-Mitte
•5
2
•1
1
•1
9
•3
0
•4
3
•Share of KBS-insured among patients in
KBS hospitals much higher than among all
SHI-insured (5.4%)
•1 Hospitals in full or partial ownership of
KBS
•SOURCE: KBS; Expert interviews; McKinsey
•McKinsey & Company | 8
In the Spanish region of Valencia, IC networks run by
public-private partnerships have been very successful lately
•
•
•Integrated Care model for Valencia
•▪ Contract between government and
•
•
provider from the private sector
Contractor to build and run
regional health network
Government to pay fixed
amount per person
–
•Impact of Valencia's IC model
•Reduced cost of care
•Public healthcare provision, per person
EUR
•86
7
–
•80
9
• ▪ Network including hospitals and
primary care
•National
average Spain
• ▪ Transfer solution for moving patients,
favouring outbound care
•▪ Profitability of provider capped at 7.5%
Valencia
•60
7
•2530%
•Valencia
province
•Transfer of risk from government to
provider
• ▪ Fixed payments per person from
government (regardless of actual cost of
care)
•Patient satisfaction increased to 90%
•SOURCE: Hospital de Torrevieja; Expert interviews; McKinsey McKinsey & Company | 9
•McKinsey & Company | 8
•Torrevieja, in the south, demonstrates the success
•of Valencia's approach to Integrated Care
 Medium size hospital
(260 beds)
 Run by a private
company (Torrevieja
Salud) as a public-private
partnership
 Torrevieja Salud provides
full public healthcare
service for the
Department of Torrevieja
 Regional government
pays annual fee per
eligible resident to the
company, covering the full
range of services1, 2
•Highly successful
model
 Lowest level
of public
healthcare
spending in Spain
 Improved quality
and efficiency of
care, e.g.,
significantly reduced
waiting times
 Payment to medical
staff based on financial
results
•1 Additional fee for every patient not registered in the region ("non Capita")
•2 Not including personnel assigned to primary care and drug costs
•McKinsey & Company | 1 0
In hospitals run by the Integrated Care network
the approach has shown significant, tangible results
•Example: Hospital de Torrevieja
•Waiting lists reduced by ~ 40% over 18
months
•Non urgent work in A&E reduced
by ~ 75% over 2 years
•Number of patients waiting for major
surgeries
•Share of non-urgent cases treated in A&E
Percent
•2,40
0
•2,20
0
•2,00
0
•1,80
0
•1,60
0
•1,40
0
•1,20
0
•1,00
0
•80
0
•60
0
•1
8
•1
6
•1
4
•1
2
•1
0
•8
•41%
•75%
•6
•4
•2
•SOURCE: Hospital de Torrevieja
•05/0
7
•07/0
7
•09/0
7
•11/0
7
•01/0
8
•03/0
8
•05/0
8
•07/0
8
•09/0
8
•11/0
8
•01/0
9
•03/0
9
•05/0
9
•07/0
9
•09/0
9
•11/0
9
•01/1
0
•03/1
0
•05/1
0
•07/1
0
•09/1
0
•11/1
0
•0
•McKinsey & Company | 1 1
•In Torrevieja, the electronic medical record Florence has
•been critical to success
•Florenc
e
Medical
(EMR)
•Florenc
e
Management
•Florence
e-Learning
•SOURCE: Hospital de Torrevieja
 Microsoft-powered Electronic Medical
Record Database (EMR), developed inhouse for approximately EUR 1 million
 Integrates patient records with
clinical
information across all departments
 User-friendly, patient and processmanagement focused tool creates guidelines
for daily operations
 Provides services to hospital staff (e.g.,
workflow analysis) as well as patients (e.g., text
message updates on waiting times)
 Also able to “talk” with external clinical databases
 Current development effort: integrating
decision criteria to help standardise processes
•McKinsey & Company | 1 4
•To make Integrated Care a success, four things are necessary
•Aligned incentives
 Incentives aligned across providers,
funding mechanisms tied to outcomes
 Active support for patients to manage
their own care
•Information sharing
 IT infrastructure, processes, and
gover-nance support one integrated
patient record and easy information
flow
•Joint governance
 Joint governing, decision-making
body to monitor and act on issues
 Agreed protocols allowing care to
be delivered by a multi-disciplinary
team
•Organizational development & culture
 Leaders and clinical teams
spanning provider organizations
 Joint training and development
plus development of team culture
•McKinsey & Company | 1 4
•And what does this all mean for YOU?
•FOR DISCUSSION
•For hospitals not yet involved in Integrated Care
•▪ What models of Integrated Care are the most promising for your
•hospital and is necessary to realize them?
•For hospitals already involved
•▪ What was the context (drivers) that led you to integrate?
•▪ Why did you select the model you did? What were some of the
•structural constraints?
•▪ Are you better off with it than without it (qualitative and
•quantitative)?
•▪ How long did it take you to really get it going?
•▪ What would you do differently if you were to start it again?
•McKinsey & Company | 1 4