Will the passage of the Patient Protection and Affordable Care Act (PPACA) in 2010 usher in a renewed emphasis on hospital Centers of Excellence (COE)? Did the Center of Excellence concept ever really go away? Whatever you call it, and most importantly, however you define it, the COE remains a logical concept for organizing, staffing, marketing and focusing resources on a relatively homogenous patient population of great importance to the typical hospital. This has been particularly true with comprehensive cardiovascular services, as they comprise a highly visible clinical service frequently contributing significant revenue to the hospital or health system. Successful CV programs require focused management, significant and regular capital investment in expensive technology, ongoing clinical development and a large and diverse specialty medical staff. Are these programs comprehensive CV service lines or CV Centers of Excellence? CFA believes that the most successful programs are nearly indistinguishable.
One way to interpret the intended consequences of the PPACA is the push towards a number of new payment incentives that require a closer working relationship between physicians and hospitals. These include accountable care organizations (ACOs), pay-for-performance-type programs, payment bundling (hospital and physicians), and several other initiatives. If hospitals need to work more closely with their physicians towards achieving common objectives, then what better way to organize this effort than around a specific service line, or Center of Excellence? With healthcare reform promoting better health outcomes at lower cost, it makes sense that hospitals look at the best way to approach their individual strategic and operational response to reform.
COEs are a logical place to start. Currently, while cardiovascular specialists focus their attention on the service line that supports their work, their level of engagement varies. COE development can be promoted by enhancing physician/hospital integration. Specialty physicians can be expected to work more closely within their respective hospital service lines to promote increasing value to patients and payers when they are incentivized to do so.
Focus on COE development will parallel the needs of the developing PPACA-sponsored efforts. Physician-hospital alignment and comprehensive integration can create the mechanism for goal congruence and appropriate incentivization towards these goals. Alignment/integration strategies must focus on how these strategies will successfully support the goals and objectives of the service line.
Beyond fostering closer integration and alignment with the CV medical staff to better respond to emerging requirements of the PPACA, CFA believes that eventually governmental payers will contractually steer patients to the higher quality and lower cost providers (as many private payers/managed care plans do today). This eventuality will be driven by the necessity for Medicare and Medicaid to achieve substantial cost savings in the face of increasing demand for services by our aging population. Preparing and positioning to respond to such a heightened competitive arena will likely drive CV COEs to re-double their program development and management efforts to new levels. This is what CFA calls a Performance-Based Center of Excellence.
We will leave the discussion of what is required to turn a service line into a “Performance-Based” Center of Excellence for a future article.
CFA invites your thoughts, comments and questions.