The Case for Regionals: A Not-for-Profit Perspective

Abstract

In Managing the Transition to Integrated Health Care Organizations, John Griffith makes a point about not-for-profit health care providers by using literary devices similar to those in an Elizabethan morality tale: He uses extremes to make his message clear, and he uses characters to personify concepts and virtues. In the truest sense of such a tale, there is a lesson, a moral to the story. Griffith uses extremes in the characters of the and The IHCO personifies well-intentioned local providers whose first loyalty is to the community. The IHCO seeks to integrate services to meet community needs as well as to compete with forces at the other extreme, the anti-IHCO. Griffith notes that to achieve integration, the IHCO must have access to capital, be locally controlled, and have certain competencies related to clinical care, administration, and governance. The anti-IHCO personifies aggressive national for-profits whose first loyalty is to stockholders and to the bottom line, and not in fulfilling a mission of service to the community. Somewhere between these extremes, notes Griffith, is another possibility-regional or statewide systems. Mercy Health Services (MHS) is such a system. The eighth-largest health care system in the United States, Mercy Health Services serves Michigan and Iowa, where it provides care to over 40 communities. MHS agrees with Griffith on the competencies and resources a local organization needs to integrate. For example, a local organization must be able to attract and retain capable clinicians and administrators. It must support them with ongoing educational programs and the tools to continuously improve the quality and cost effectiveness of care. It must give them the ability to share information with one another and access information from outside sources, such as national databases. However, the new competencies and resources come at a price. Based on our experience, it is virtually impossible for a local provider to pay the price singlehandedly and get the necessary scope of resources and competencies. We agree with Stephen Shortell-whom Griffith cites in his article-and the Health Care Advisory Board (HCAB) that regional systems are a very successful way to bring to a local community the depth and breadth of resources a standalone hospital needs for integration, but that it cannot generally afford or provide on its own. Regional Systems Add Value to Local Communities Regional not-for-profit systems such as MHS are community-oriented by tradition. The influence of local communities on system direction is critical to achieving the mission. Thus, community orientation and system integration are what can enable regional systems to add value to local communitiesvalue that goes beyond what individual providers or large for-profits might provide. Regional systems can deliver this value by functioning as an Network, a model developed by HCAB. The model is based on the conviction that a system can provide benefits that a standalone organization cannot. MHS has adapted the HCAB model, and it serves as a frame of reference for this discussion. The Intelligent Network offers four valueadded services for local organizations and communities, encompassing many of the competencies Griffith claims are necessary for individual organizations. These categories, with brief examples from MHS, illustrate how a regional system, functioning as an Intelligent Network can deliver needed competencies for local integration: Expert Management This can be defined as the ability of a system to attract and retain top-notch talent and give the entire network access to it. Griffith acknowledges the need of local organizations to improve their competency in management, leadership, governance, and clinical care. Such talent is expensive and can be difficult to attract to a standalone community organization. The value of a system is that it can recruit top clinical and managerial talent to local and system organizations and share that talent across the system by networking its expertise. …