Facing the prospect of reduced Medicare reimbursements, BJC Healthcare has entered into a collaborative partnership with three other Midwestern nonprofit health systems.
The pact, named BJC Collaborative LLC, will allow the four nonprofit health systems to reduce costs and share information regarding best medical practices, said Steve Lipstein, chairman of BJC Healthcare, who will chair the collaborative.
“We want to explore the potential of this collaborative to see what we can do together to add value for patients and their families and help us improve or lower the cost of what we do,†he said in an interview.
The other three participating health systems are St. Luke’s Health System, which is based in Kansas City; CoxHealth, which is based in Springfield, Mo.; and Memorial Health System, which is based in Springfield, Ill.
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Lipstein and his counterparts at the other health systems also are scrambling to comply with federal health reform, which aims to re-price medical care based on quality of service rather than volume.
The Centers for Medicare and Medicaid Services is reducing reimbursements to hospitals that fail to meet quality of care standards. In addition, the Medicare budget – under the Budget Reduction Act of 2011 – will be cut dramatically by “sequestration†next year if Congress fails to soon agree on budget cuts.
Three of the four health systems are already working together to jointly purchase medical supplies, and the collaborative plans to explore additional cost savings through the joint purchase of such things as cafeteria food, energy, hospital and laboratory equipment, and training materials.
“We’re creating scale here,†said Ed Curtis, the chief executive of Memorial Health System, which prides itself on its high degree of efficiency.
Lipstein said the health systems, which have not invested money in the collaborative, will be equal partners and, at the beginning, there will be no separate location or offices.
The collaborative is organized as a limited liability company, but Lipstein said it will not be a for-profit. “There’s no intention of creating revenues or expenses that would be any kind of a tax liability.â€
He said that four operating committees will be created to explore computer systems; contracted services and energy management; medical equipment maintenance; and supply chain. Four “roundtables†will also be formed to share information on clinical quality and patient service; employee benefits; professional development; and regulatory compliance.
“It’s more a menu of possibilities than anything that’s been decided upon,†Lipstein said.
He also said the health systems will attempt to foster relationships among hospitals and clinical specialty teams to determine the best ways to care for patients in this region. In the future, he added, it may be possible to jointly establish treatment centers in certain medical areas such as pediatrics or cancer.
Steve Edwards, chief executive at CoxHealth, said that a key strength of CoxHealth is its high degree of “integration,†or high percentage of doctors on its payroll, which helps the hospital motivate its physicians.
The compensation of CoxHealth specialists is based partly on their patient satisfaction scores and quality of care ratings. The health system is in the top 10 percent of hospitals having the lowest readmission rates for Medicare patients.
“We envision working together on some very concrete and specific things and then see where it takes us,†said Dr. Mindy Estes, chief executive of St. Lukes Health System, who will serve as vice chair of the collaborative.
