A half-year after the formation of a hospital consortium that includes two Greater Lehigh Valley health networks, the association has identified four cost-cutting initiatives that some of the seven members will begin.
The initiatives are just the first steps for AllSpire, which was formed Sept. 19 and includes Lehigh Valley Health Network and Reading Health System. The seven networks came together for a common goal, to provide the most cost-effective and efficient health care and to respond to the Patient Protection and Affordable Care Act.
AllSpire has agreed to gradually implement in some of its health systems these four initiatives: an electronic health care record platform, using a single source to manage employee benefits, group purchasing and regional laboratory services. Reading Health System and LVHN both are planning to carry out all four initiatives.
Each initiative has been proven to decrease costs for the consortium’s networks and ultimately will cut costs for patients, the consortium said.
“I do not anticipate the projects will be done in tandem,” said Clint Matthews, president and CEO of Reading Health System. “If two are ready to go, they will get started, and we have not identified any involving cutting or adding jobs.”
The seven health care systems each invested $1 million to form and fund the initial startup costs of AllSpire.
The consortium brings together nearly 30 hospitals in seven networks: LVH, Reading, Lancaster General Health in Lancaster, WellSpan Health in York, Atlantic Health System in Morristown, N.J., Hackensack University Health Network in Hackensack, N.J., and Meridian Health in Neptune, N.J.
“When I sit down with the other CEOs, we are all facing the same challenges and trying to get to the same place,” said Dr. Ronald Swinfard, president and CEO of Lehigh Valley Health Network. “Why not do it with some collaboration?”
To prioritize initiatives to pursue, Allspire created an internal committee in each of its health systems. All seven committees met once a month via telephone conferencing, and they met monthly on an individual basis.
The committees report quarterly to an Allspire management council that has members from all seven networks. The management council reports to the seven CEOs of the networks and each network’s board of trustees.
Each health system has one final vote per initiative to determine which of them the consortium will pursue.
“With AllSpire, we are able to bring the best and the brightest of the health systems together to help improve across the seven systems,” Matthews said. “And this means better outcomes.”
The initiatives selected are four of what eventually could be many, as about 30 potential projects were identified by the committees.
At least half of the health systems need to vote in favor of an initiative for it to be approved, and not all of the systems are required to implement an AllSpire project, Matthews and Swinfard said. Each health system is responsible for funding its portion of an initiative.
Information technology is one of the first initiatives. Five of the seven health networks already use Epic, an electronic health care record system. AllSpire wants to link the Epic software system among the five networks to create one accessible platform.
“We will not fully integrate the health care records of our patients, but only the platform and software systems,” Matthews said.
Group purchasing is another initiative that AllSpire will implement to allow its health systems to jointly negotiate contracts and vending services and use economies of scale. The intent is to get a better price on purchases of equipment and supplies.
Another AllSpire initiative is to potentially use just one outside source to manage employee benefits for all seven systems. Presently, all seven networks outsource on their own to manage employee benefits.
Regional laboratory service is the final initiative during the first rollout. Each network has its own laboratory, and one idea is to have the systems share a regionally located lab or labs.
After its first four initiatives, AllSpire’s next round of projects could include care management.
Encouraged by the federal government, care management would mean establishing patient-centered medical homes.
These homes would serve as a primary care facility that can coordinate all the care a patient might need with more providers and a wider variety of providers. The facility’s lead doctor would take on a new kind of role, as a care coordinator.
AllSpire also will continue to respond to the Patient Protection and Affordable Care Act, commonly referred to as Obamacare. The health care reform bill, signed into law in 2010, was touted as an effort to increase the access to and affordability and quality of health care for Americans.
“I think that we have been responding to changes in the health care environment anyway,” Matthews said. “Obamacare has just created another layer of urgency and anxiety.”
Swinfard noted that health care is in a somewhat disruptive state because of the changes at the national level.
“What unifies the seven CEOs of AllSpire is that we now have a better opportunity for change in health care,” he said.