Alignment and integration are the new buzz words. Accelerated by health care reform (patient demand and provider supply imbalance, reimbursement declines, quality requirements and technology pressures), the two operating models can address the amplified need for hospitals and physicians to forge stronger partnerships that optimize value for consumers, whether they are patients, payors or the community at large.
However, many hospitals are unclear about the differences between these two models—let alone how to decide which is a better option for their organization. Are alignment and integration synonymous? Are they just proxies for employment?
The answer to both questions is no. Alignment and integration are different concepts and require different actions, competencies and cultures. (See Exhibit 1).
Alignment is a precursor to integration, for which a group must be blended into a functioning whole. Many clinic-run organizations (e.g., Mayo, Cleveland) and integrated systems (e.g., Kaiser) are examples of integrated groups.
Given its complexity, attaining physician-hospital integration is a lofty and, in some cases, impractical goal for many hospitals. As such, for some organizations, the intermediate step of alignment is the optimal end state, achieving the needed customer value within fixed constraints.
But to align an organization, on which factors should hospitals and physicians focus? Historically, the focus has been on markets: practice locations and patients. (See Exhibit 2).
To more effectively align an organization and set the stage for potentially integrating, the collective group should broaden its focus to include additional leadership areas: quality pursuit, operations, strategy and vision in addition to economic alignment, which are both indirect and direct forms of compensation. Coordinating these alignment mechanisms creates a more effective partnership for optimizing care.
Once the collective group is aligned on all these factors, the organization can reevaluate the feasibility and potential benefits of the more complex integration model.
22 August 2010