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Can Healthcare Be Fixed?

Healthcare reform is a hot topic among politicians and business owners and as CEO of Premier, an alliance of more than 2400 hospitals and 70,000 non-acute healthcare sits, Susan DeVore says that healthcare reform will happen one way or another. Here’s what DeVore sees as the future of healthcare.

Susan DeVore, CEO of Premier 

Susan DeVore, CEO of Premier

No matter how you feel about Obamacare—or what happens with it politically—America’s healthcare system has to change, says Susan DeVore, CEO of Premier, an alliance that represents approximately 2,400 hospitals and 70,000 non-acute healthcare sites nationwide. “We cannot stop, backup or slow down, because the system is not sustainable the way it is today,” she asserts. “There’s also all kinds of bipartisan support for the healthcare delivery system reforms—the things people are still debating are the individual mandate and insurance system reforms.”

Admittedly, DeVore has a lot invested in that argument. Her Charlotte, North Carolina-based organization is dedicated to simultaneously reducing operating costs and improving quality of care for its members. That goal dovetails nicely with an element of healthcare reform looming on the horizon: Medicare payment incentives that will favor successful Accountable Care Organizations (ACOs), or healthcare systems that stem rising health care costs while also meeting performance standards on quality of care and putting patients first.

But DeVore is quick to point out that Premier predates healthcare reform by more than a decade and, as an alliance of healthcare providers that is actually jointly owned by the not-for-profit members it comprises, has its own incentive for meeting the goals proposed for ACOs. “We are essentially a partnership that distributes 70 percent of its net income back to our not-for-profit hospital members, who use it to reinvest in their communities,” explains DeVore, who has been in the CEO seat since the summer of 2009.

Initially, Premier’s cost-cutting efforts centered around a hospital purchasing network that united independently owned and operated healthcare facilities in a purchasing network to reduce costs by aggregating volume and negotiating more effectively with suppliers. Having since grown to become the nation’s largest hospital purchasing network with $571 million in annual revenues (2010), Premier now houses one of the most comprehensive repositories of hospital clinical and financial information in the U.S.—a wealth of data its members can use to track performance, identify best practices and ultimately, improve efficiency and quality of care.

“We run collaborative programs where we bring a few hundred health systems together, find the high performers and low performers on certain criteria and try to move everyone up,” she explains. “For example, one of the leading causes for mortality in a hospital is sepsis. So we had
our automated database pulled data from the collaborative hospitals for those who had higher-that-expected mortality rates and those who had great scores. Then the members shared best practices with each other—things like assessments in the ER for early identification of patients likely to be candidates for sepsis or technology that looks at antibiotic treatments for sepsis.”

Hospitals participating in the collaborative receive monthly report card that shows their performance relative to peers, as well as measurement on performance metrics like mortality rates, patient satisfaction, rate of improvement and costs.

In a 30-month period, DeVore estimates that the collaborative’s efforts have saved more than 25,000 lives and $2.5 billion. “The country as a whole, over the last two years, saw a 14 percent increase in inpatient hospital costs, while the hospitals in this collaborative saw a 2 percent increase in costs,” she says. “That’s all work being done without the new health reform regulation. It’s private sector work to try to improve quality, safety and cost.”

In anticipation of healthcare reform mandates scheduled to go into effect in 2012, Premier launched an accountable care collaborative in May of 2010. The plan is to engage physicians, hospitals and insurance companies in overcoming the barriers those various players face in building community-based accountable healthcare organization systems in their communities. “The problem with healthcare is that it’s been very fragmented, and the incentive has been around volume,” explains DeVore. “This program is designed to create a system where healthcare providers are incented to keep patients out of the hospital, and put patients where they really need to be to get the care they need to stay healthy.”

Patients, too, will need to play a role in driving quality and cost improvements. Consumers today struggle with health care choices in part because of a lack of transparency around both costs of procedures and outcome rates. “Consumers want to know, ‘If I have to go into the hospital, is the hospital safe and is the care delivered of high quality?’” says DeVore, who adds that comparing costs of care at different facilities is also tricky. “Consumers don’t pay for care directly or [cohesively]. They pay the doctor for part of it, the hospital for another part of it and the pharmacy for still another part and that makes it difficult for patients to navigate.”

To address those issues, Premier has established top performance standards in six areas it deems essential for superior quality and economic performance in a medical facility—cost, mortality, harm, patient satisfaction, readmissions and evidenced- based care. The idea, ultimately, is that a hospital that can prove that they are good at all five of those things at the same time would be attractive to payers, insurance companies and patients.

Over time, DeVore sees community healthcare systems that integrate patient data collected by physicians, hospitals and other care providers in the community. Those databases would then enable the analysis of clinical and economic performance integral to identifying best practices
and enabling providers, as well as consumers and payers, to make wiser healthcare decisions.

“We want to define, with our members, top performance in healthcare,” says DeVore. “And we want to meet them wherever they are now and move them there. I wake up every day asking, ‘How am I going to make healthcare safer, of higher quality and more affordable; and how am I going to have health systems in communities lead the way and innovate?’”

About Jennifer Pellet

As editor-at-large at Chief Executive magazine, Jennifer Pellet writes feature stories and CEO roundtable coverage and also edits various sections of the publication.