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HEALTH SYSTEMS: Optimum economy of scale $3-$5 billion+

The July issue of the Catholic Health Association’s journal, Health Progress, is largely devoted to articles about the changing role of Catholic health providers.  What does sponsorship mean today?  How can Catholic providers partner with secular and for-profit entities?  The Morrissey article contains an interesting factoid, which is a quote from an executive at Catholic Healthcare Partners, speaking about the advantages of health systems:

  • “We do believe in economies of scale; we think the optimum economy of scale is at least $3 to $5 billion in assets or annual revenues, and it might be larger than that.”  (page 8)

Source: Morrissey, J.  New partnerships for stronger mission.  Health Progress;94(4):7-13, July-Aug. 2013.  Click here: http://www.chausa.org/publications/health-progress/article/july-august-2013/new-partnerships-for-stronger-mission  Posted by AHA Resource Center (312) 422-2050, rc@aha.org

Top 10 biggest health systems: 2013 magazine survey

Each year, the magazine Modern Healthcare conducts a survey of the health systems in the US and compares them on the basis of net patient revenue and, in a separate table, by number of acute care hospitals.  The annual story provides a listing of the largest health systems and a more granular breakdown by whether the systems are public, for-profit, Catholic, non-Catholic religious, or secular.  There is also a listing of health systems operating home health agencies, for those with the largest number of home health visits.  The story discusses the degree to which health systems are getting involved in accountable care organizations (ACOs).  More data can be purchased from the publisher.  Note that health systems that did not participate in the survey are not included in the results.

Largest health system in 2013 (regardless of ownership type):  HCA (whether measured by revenue or by number of acute care hospitals)

Source: Evans, M.  Beyond ACOs.  Modern Healthcare;43(25):20-24, June 24, 2013.  Click here for publisher’s website: http://www.modernhealthcare.com/  More data can be purchased here: http://www.modernhealthcare.com/article/20130622/DATA/130629993/modern-healthcares-37th-annual-hospital-systems-survey Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

How many ACOs are there? 250 and counting

Here’s one just-published answer to the popular question: “How many accountable care organizations (ACOs) are there?”  These authors, with Weill Cornell Medical College in New York, state that there are currently more than 250 ACOs and that the number increased rapidly in 2012.  They anticipate that the number will continue to grow lickety-split not only due to federal government initiatives but because commercial insurers are signing ACO-like contracts with various entities.  The authors go on to discuss the meaning of population health (buzzword alert!) and what ACOs can realistically be expected to take on in that regard.

What do I like about this article?  It’s topical.  There’s a useful quotable number in it.  Even though it is not completely free full text online, the publisher will let you see the first page for free.

Source: Noble, D.J., and Casalino, L.P.  Can accountable care organizations improve population health? Should they try?  JAMA;309(11):1119-1120, Mar. 20, 2013.  Click here for the publisher’s website: http://jama.jamanetwork.com/article.aspx?articleid=1669825  Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

Number of System-Affiliated vs Independent Community Hospitals, 1999-2011

System-affiliated hospitals outnumber those that remain independent. In 2011, 61% of community [acute care, non-federal] hospitals were affiliated with a health care system. This compares to 51% in 1999. Conversely, 39% of community hospitals were independent facilities in 2011, down from 49% in 1999.

Source: Table 2.1: Number of community hospitals, 1991-2011. In: Trendwatch Chartbook 2013, American Hospital Association, Feb. 26, 2013. http://www.aha.org/research/reports/tw/chartbook/2013/table2-1.pdf . Related chart 2.4 for 2001-2011: http://www.aha.org/research/reports/tw/chartbook/2013/chart2-4.pdf

Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

POPULATION HEALTH: Catholic Health Initiatives’ pilot

Catholic Health Initiatives (Denver) http://www.catholichealthinit.org/, a large multi-institutional system, is working on managing population health based on the accountable care organization (ACO) model.  The target population is CHI employees.  The model is also structured on the medical home approach.  CHI hopes to cut employee health care costs by 10 to 14 percent. 

Why I like this article: At the end, there are suggestions on how other health systems might begin to approach population health management.

Source: Sanford, K.D.  Population health management: a “start small” strategy.  Healthcare Financial Management;67(1):44-47, Jan. 2013.  Click here for more information: http://insurancenewsnet.com/article.aspx?id=370913&type=newswires  Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

Arguing in support of a for-profit Catholic health care entity

Ascension Health Care Network http://ahcn.com/ calls itself “the nation’s first for-profit Catholic healthcare system.”  It is a joint venture of Ascension Health and Oak Hill Capital Partners.  This article is a lengthy examination of the concepts and values associated with nonprofit health care providers generally, and Catholic providers in particular.  The characteristics of “Catholic identity” are explored.  The author concludes, “a for-profit, Catholic-owned health care entity that mindfully embraces the distinctive Catholic identity will retain most of the nonprofit characteristics closely aligned with, and perhaps integral to, the meaningful provision of the good of health care.”

Source: Carroll, K.A.  Can for-profit Catholic health care get the mission right?  Health Progress;93(3):49-59, May-June 2012.  Click here for access to full text: http://www.chausa.org/pages/our_work/mission/overview/  Posted by AHA Resource Center, (312) 422-2050, rc@aha.org

Practice Benchmarks on Non-profit Health System Governing Boards

A study of the governance structure of the 14 of the largest nonprofit health systems in the US is detailed in this new report. With an eye toward ongoing improvement, the report provides benchmarking data on governance practices in the following areas:

  • Board structure, including consecutive term limits, voting board member limits, board size, board composition, board committees and executive committees, and perceived effectiveness of committees
  • Board processes, covering board accountability, board chair-CEO relationships, board and CEO evaluation processes, succession planning, boards role in patient care quality and in community benefit, and allocation of board time and effort
  • Board culture, such as  approach to decision-making, board development, senior staff support for the board, and executive sessions

Emerging governance patterns are identified. The study collectively scores systems [not by name] on effective governance practices and correlates that with overall system patient care performance, based on Thomson Reuters [now Truven] 100 Top Hospitals methodology. While not the primary focus of the study, the researchers found a correlation between effective  governance scores and some patient care measures, but not with the overall aggregate patient care performance measures used. An appendix to the report highlights a selected governance feature each participating system provided.

The systems that participated in the study were:

  1. Adventist Health System Sunbelt Healthcare
  2. Ascension Health
  3. Banner Health
  4. Carolinas HealthCare System
  5. Catholic Health East
  6. Catholic Health Initiatives
  7. Catholic Health Partners
  8. Christus Health
  9. Kaiser Foundation Hospitals and Health Plan
  10. Mayo Clinic
  11. Mercy Health
  12. Providence Health & Services
  13. Sutter Health
  14. Trinity Health

Source: Prybil L and others. Governance in large nonprofit health systems: current profile and emerging patterns. Commonwealth Center for Governance Studies, 2012. http://www.mc.uky.edu/publichealth/documents/Governance_booklet_FINAL.pdf

Related sources:

Foster D. Hospital system membership and performance; top 100 hospitals research. Truven Health Analytics, May 2012. http://www.100tophospitals.com/assets/health_system_hospitals_perform_better.pdf

Prybil L and others. Governance in high-performing community health systems; a report on trustee and CEO views. Grant Thornton, 2009. http://www.nonprofithealthcare.org/resources/GovernanceInHigh-PerformingCommunityHealthSystems.pdf

2011 AHA health care governance survey report. AHA Center for Healthcare Governance, 2012. Available for sale at http://ams.aha.org/eweb/?ahabu=AMERICANGOVERNANCE

Dynamic governance: an analysis of board structure and practices in a shifting Industry.  2011 biennial survey of hospitals and healthcare systems.  Governance Institute, Fall 2011. Available for sale at http://www.governanceinstitute.com/ResearchPublications/ResourceLibrary/tabid/185/ProductID/1199/CategoryID/3/List/1/Level/a/Default.aspx?

Posted by AHA Resource Center, (312) 422.2050, rc@aha.org


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