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Hospital Economics Don’t Reward Chronic Disease Management

My colleague and friend Dr. Jaan Sidorov has recently started a blog — Disease Management Care Blog.  Check it out and add it to your RSS feed.  Jaan is eminently qualified to write on the topic — he spent 25 years at Geisinger Health System in Pennsylvania as a practicing physician and as an executive, and he just ended a term on the board of DMAA—the Care Continuum Alliance (formerly Disease Management Association of America).

Jaan’s sense of humor and articulateness shine through in his latest posting “Are Integrated Delivery Systems really all that?” He presents a Top 10 list of “why IDS’ could always remain the health care solution of the future”.

Jaan, it’s worth splitting a hair here. Let’s clarify who we’re talking about when saying “an integrated delivery system” (IDS).

To the extent you look at an IDS as a truly integrated financing and delivery system, I have no disagreement with the list.  However, the number of IDS’ surviving today is relatively small (Group Health Cooperative, Kaiser, Geisinger, Intermountain Healthcare, a few others) and NOT growing…the economics don’t support it.

It became fashionable in the 1990s for many hospitals/regional health systems to start calling themselves an “IDS”.  This was a failed experiment.  Hospitals couldn’t develop the expertise to run the insurance (financing) side of the business and they lost their shirts when they tried hiring doctors.

Hospitals just don’t have the interests to pursue system integration.  This isn’t a character flaw, it’s purely a function of economic incentives.  Hospitals are still mostly reimbursed for putting patients in beds and performing procedures.

A intriguing recent report documents that hospitals don’t see chronic disease management as a priority.  Estes Park Institute recently issued “Top 10 Issues in Health Care 2008”.  Some 700 hospital managers, board members, and physician leaders were asked to rate a list of issues based on “importance” and “difficulty”.

Here are the results.  “Better coordination of chronic illness” is at the bottom of list on importance and near the bottom on difficulty.

Hospitalchronic

(Click on the graphic to see a larger version)

Could this change?  Could hospitals become leaders in chronic care?  Of course…but the economics of health care delivery will have to change first. 

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 Unported License. Feel free to republish this post with attribution.

1 Comment

  1. Jaan Sidorov on January 26, 2008 at 8:38 am

    Very interesting Vince and I appreciate and agree with the need to carefully define just was comprises an IDS.

    My take-away from the graphic is that the respondents are pretty clueless in assigning chronic illness care to a low difficulty quadrant. Maybe it’s best that they stay away from the field.