Practice Management

Phoenix Children’s Hospital integrates care from ground up

When good care is being given, everyone benefits financially


About 4 years ago, officials at Phoenix Children’s Hospital stopped and took a look around. The adult health care landscape was zooming toward value-based models and integrating care so that previously separate components were now working together. The health of whole populations mattered more than ever.

But their hospital, they found, accounted for just 9% of the “care touches” – interactions between a patient and a doctor – of their half-million pediatric population. They were not working closely with primary care doctors and independent specialists. Patients would come to the hospital, get treated, and then – poof, they were gone. The hospital came to a realization that there was a better way to provide care.

Chad Johnson, senior vice president at Children's Care Network Phoenix

Chad Johnson

“We can’t keep doing this alone and saying, ‘We’re going to impact the overall wellness of our patients just by being a hospital,’” said Chad Johnson, senior vice president of Phoenix Children’s Care Network.

They began a process that led to what appears to be a “first-of-its-kind” model, an integrated care network created from the ground up by a hospital venturing out into the community and actively recruiting private primary care doctors and specialists. Now, more than 1,000 physicians from more than 100 practices in the Phoenix metro area are part of the network, joined with the hospital through contracts laden with incentives for meeting care and wellness goals. When good care is being given, the network gets paid, and everyone benefits financially.

“It’s amazing the difference we’re able to provide when we start linking together what used to be very disparate systems,” Mr. Johnson said.

Here are some features of the network:

Every group and practice, including the hospital, is now sharing their data. When a child shows up at the ER, the ER doctor can quickly see things like who the primary care doctor is, allergies, medications, and care history.

  • Targets such as asthma control, providing basic wellness exams, and following patients appropriately, are tied to financial rewards.
  • Children with complex or special health care needs, and patients who are high utilizers, have a care coordinator assigned to look more closely at their cases.
  • A corporate entity created by the hospital and its independent community physician partners has a doctor-heavy board of directors composed of community primary care physicians, specialists, hospital-employed physicians, and hospital administrators.

Some of the care improvements have been dramatic, Mr. Johnson said. One teenager had made 55 ER visits and 21 inpatient visits over 9 months, but the pattern went unnoticed. With new tools – reports drawn from hospital records, insurance records, and records from other doctor visits – the problem became apparent. A care coordinator found that the mother didn’t quite understand how to administer the boy’s medication, prompting repeated medical crises and hundred of thousands of dollars in unnecessary costs. The teenager has since re-enrolled in school and has had no more hospital admissions, Johnson said.

He said that, at first, many community doctors had a “real skepticism” of being too closely tied to a hospital financially, but now doctors are getting in touch with the network about joining.

“There’s a leap of faith that has to happen in the initial stages,” he said. “When you get the insurance companies at the table to really work with you to build the right incentives around truly impactful and quality care, you can really start to move the needle. When you see – with data – that what you’re doing is having success, and they see the additional money coming from the incentives, that really helps.”

Amy Knight, MHA, chief operating officer of the Washington-based Children’s Hospital Association, said that, while other children’s hospitals have migrated toward more integrated care, they either haven’t needed to recruit community physicians as they have in Phoenix, because they already employed many primary care physicians, or market conditions have been such that they haven’t expanded as quickly.

“Phoenix saw a huge opportunity and was very smart about how they approached their own market,” she said. “They are definitely on the front end, the cutting edge of doing that.”

Since its network has expanded, Phoenix Children’s has hosted visitors who hope to draw lessons from their experience, she said.

“I think what most people go away with is: ‘Very interesting, very cool – not sure it would work in our market,’” she said. Still, lessons on thinking about risk and building a governance structure are widely applicable, she said.

“The house may look a little bit different, but some of the things you’re doing inside it may actually all look the same,” Ms. Knight said.

She expects a continued move toward more integrated care networks, despite the on-again, off-again political talk about repealing and replacing the Affordable Care Act.

“There’s probably some people stepping back in hesitancy, but I don’t think that the political discourse right now will necessarily change the trajectory that we’re on.”

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