Case Studies of Regional Health Care Improvement April 2014 Opportunity for Regional Improvement: Three Case Studies of Local Health System Performance Douglas McCarthy, Sarah Klein, and Alexander Cohen The Commonwealth Fund and the Institute for Healthcare Improvement The mission of The Commonwealth ABSTRACT: Case studies of three U.S. regions that ranked relatively high on the Fund is to promote a high performance Commonwealth Fund’s Scorecard on Local Health System Performance, 2012, despite health care system. The Fund carries greater poverty compared with peers, revealed several common themes. In these communi- out this mandate by supporting ties, multistakeholder collaboration was an important factor in achieving community health independent research on health care issues and making grants to improve or health system goals. There were also mutually reinforcing efforts by health care providers health care practice and policy. Support and health plans to improve the quality and efficiency of care, regional investment and coop- for this research was provided by eration to apply information technology and engage in community outreach, and a shared The Commonwealth Fund. The views commitment to improve the accessibility of care for underserved populations. State policy presented here are those of the authors and national and local funding programs also played a role in expanding access to care and and not necessarily those of The providing resources for innovation. The experiences of these regions suggest that stakehold- Commonwealth Fund or its directors, officers, or staff. ers can leverage their unique histories, assets, and values to influence the market, raise social capital, and nudge local health systems to function more effectively.      For more information about this study, INTRODUCTION please contact: Research has documented pervasive geographic variations across the United States Douglas McCarthy, M.B.A. Senior Research Director in the accessibility, quality, and use of health care services, as well as in health The Commonwealth Fund outcomes and disparities.1 The Commonwealth Fund’s Scorecard on Local Health DM@cmwf.org System Performance, 2012, estimated substantial gains if all regions of the coun- try performed as well as the top-performing regions.2 While many communities are engaged in efforts to build local capacity for improvement,3 they have unique histories and circumstances with complex and evolving relationships among stake- holders with varying characteristics. Nevertheless, regions and communities may To learn more about new publications find it useful to learn from each other’s experiences, not only to identify promising when they become available, visit the approaches to common challenges but also to understand how particular circum- Fund's website and register to receive Fund email alerts. stances influence a community’s choices and success. Commonwealth Fund pub. 1737 With this goal in mind, we conducted case studies of three regions— Vol. 4 Western New York, West Central Michigan, and Southern Arizona (Exhibit 1)—that 2T he  C ommonwealth F und performed relatively well overall and on particular FINDINGS dimensions of performance on the Scorecard, which The case study regions share some characteristics assessed 43 indicators representing health care access, that may allow for better performance but most of quality, efficiency, and outcomes for 306 U.S. regions which are relatively fixed, at least in the short term (Exhibit 2).* Because income and poverty levels are (Appendices A, B and C). For instance, educational associated with regional health system performance, institutions played an important supporting role in the we wanted to study regions with greater socioeconomic study regions, both in health care workforce develop- challenges than other top-performing areas. The three ment and as a source of expertise for community health regions we selected had the following characteristics in improvement initiatives. The following discussion common: includes several other factors that emerged from a syn- • They encompass diverse midsize cities. thesis of the case studies (Appendix D). The case stud- Buffalo, N.Y., Grand Rapids, Mich., and ies were based on insights gained from interviews with Tucson, Ariz., are health care hubs for the sec- a wide range of local stakeholders, supplemented by ond-largest metropolitan areas in their respec- analysis of secondary sources. tive states. The social cohesion and pride of place within the study communities seems to enable different con- • They have higher rates of poverty than other stituencies to unify around the pursuit of ambitious top-performing regions across the country with goals. In Greater Tucson, nonprofits working in concert populations of more than 1 million.4 (Among with politicians, academic researchers, physicians, and the three study regions, only Southern Arizona faith-based groups have set out to make the city the had a poverty rate that was higher than the healthiest in the nation by developing mutually rein- median for all regions.) forcing programs to improve the health of the popula- • They stand out for higher performance on tion. These efforts have been accompanied by changes some indicators, including relatively lower in local policies and investment in infrastructure to health care costs for commercially insured support healthy lifestyles. In Western New York, local adults and Medicare beneficiaries (Exhibit 3). leaders hope to reverse decades of economic decline by enhancing the region’s reputation for delivering While the focus of this series is on regions with high-quality, complex care and by improving the health larger populations, it builds on earlier Commonwealth of the local population, thereby making the area more Fund–sponsored case studies of high-performing rural attractive to new employers. Toward that end, a “coali- areas.5 tion of coalitions” has convened providers, patients, payers, educators, government, religious, and other community leaders to educate and motivate residents to adopt healthy lifestyles and help providers implement best care practices. The medium population size of these regions may be a factor in these collaborations as stakeholders know one another and can more easily engage in both formal and informal opportunities for building mutual * The unit of analysis for the Scorecard on Local Health System influence. In West Central Michigan, hospitals and Performance, 2012, is the hospital referral region (HRR) employers have a long history of working together to defined by the Dartmouth Atlas of Health Care to reflect understand one another’s interests through a regional travel and referral patterns for complex care among Medicare beneficiaries. HRRs have been widely used in health services planning process that includes state-delegated authority research. O pportunity for R egional I mprovement : T hree C ase S tudies of L ocal H ealth S ystem P erformance 3 Exhibit 1. Location and Relative Performance of the Case Study Sites West Central Michigan Western New York Overall Performance Top Quartile Second Quartile Third Quartile Bottom Quartile Not Populated Southern Arizona Source: The Commonwealth Fund Scorecard on Local Health System Performance, 2012. Exhibit 2. Quartile Rankings on the Commonwealth Fund’s Scorecard on Local Health System Performance in Case Study Regions Western West Central Southern New York Michigan Arizona (Buffalo) (Grand Rapids) (Tucson) Performance Dimension Quartile Rank Quartile Rank Quartile Rank Overall (among 306 HRRs) 1 54 1 43 1 69 Access 1 11 2 86 2 133 Prevention and Treatment 1 69 1 14 1 69 Avoidable Use and Cost 2 113 1 65 1 42 Healthy Lives 2 100 2 100 2 88 Note: Performance generally represents the time period 2008–2010. Source: The Commonwealth Fund Scorecard on Local Health System Performance, 2012. 4T he  C ommonwealth F und GRAND RAPIDS AND WEST CENTRAL MICHIGAN: A CULTURE OF STEWARDSHIP The region encompassing Michigan’s second-largest city, Grand Rapids (population 190,000), has benefitted from local philanthropists’ investment in the medical infrastructure, as well as employer-driven efforts to consolidate health care resources, allowing local hospitals and health systems to offer a breadth of services that are unusual for the size of the community. Leaders say the region’s culture reflects the values of self-reliance and prudent use of resources inherited from Dutch immigrants. The conservative culture makes practicing evidence-based medicine second nature for area physicians, contributing to lower health care costs and making the area an attractive place to do business. See: S. Klein, D. McCarthy, and A. Cohen, Grand Rapids and West Central Michigan: Pursuing Health Care Value Through Regional Planning, Cooperation, and Investment (New York: The Commonwealth Fund, April 2014), http://www.com- monwealthfund.org/Content/Publications/Case-Studies/2014/Apr/Grand-Rapids-and-West-Central-Michigan-Pursuing-Health- Care-Value-Through-Regional-Planning.aspx. to review and recommend whether the state should Mutually reinforcing efforts by health grant “certificates-of-need,” which authorize local pro- care providers and health plans to improve viders to purchase expensive new equipment or offer the quality and efficiency of care intensive new services.6 This activism has led commu- Regional and state health insurers in Western New nity leaders to champion the merger of two competing York and West Central Michigan have designed perfor- hospitals to avoid a “medical arms race” as well as to mance incentive programs that use common metrics to recommend that competitors share a PET (positron focus on improvement and are designed to shore up the emission tomography) scanner and avoid duplicating primary care infrastructure. High-performing primary heart transplant services. The hospital merger over- care practices in Michigan, for example, can increase came antitrust concerns in part because of the com- their revenue by as much as 30 percent by achieving munity’s history of accountability and a commitment performance benchmarks for high-quality, efficient by the merged entity to ongoing substantial funding of care delivery.7 A collective of primary care practices community health programming. in Western New York used performance incentives to hire health coaches for patients and practice coaches to help physicians improve care for patients with chronic conditions. Notably, local stakeholders did not iden- tify performance incentives alone as a major driver of BUFFALO AND WESTERN NEW YORK: SPURRING AN ECONOMIC COMEBACK Buffalo, New York State’s second-most populous city (261,310 residents), has suffered economic setbacks since the 1950s. Efforts to reverse the region’s fortunes have focused on recruiting businesses and revitalizing older ones. The region’s health care ambitions, driven by state policy and community action, are unfolding along two fronts. The first is to enhance the region’s reputation for delivering high-quality, complex care, thereby attracting patients who might otherwise go to nearby cities for treatment. A second is to improve the health of the population in hopes of further lowering health care costs, thereby making the region more attractive to new employers. Achieving these goals has been the focus of a number of county-level and regional coalitions. See: S. Klein, D. McCarthy, and A. Cohen, Buffalo and Western New York: Collaborating to Improve Health System Perfor- mance by Leveraging Social Capital (New York: The Commonwealth Fund, April 2014), http://www.commonwealthfund.org/ Content/Publications/Case-Studies/2014/Apr/Buffalo-and-Western-New-York-Collaborating-to-Improve-Health-System-Perfor- mance.aspx. O pportunity for R egional I mprovement : T hree C ase S tudies of L ocal H ealth S ystem P erformance 5 Exhibit 3. Commercially Insured and Medicare Spending per Enrollee, Relative to U.S. Median Spending for Each Population 1.5 Relative Commercial Insurance Lower Spending per Person, 2009 than average 1 Grand Rapids, MI Tuscon, AZ Higher than Buffalo, NY average 0.5 0.5 1 1.5 2 Lower than average Higher than average Relative Medicare Spending per Person, 2009 Data sources: Commercial—2009 Thomson Reuters MarketScan Database, analysis by M.Chernew, Harvard Medical School. Medicare— 2009 Medicare claims as reported by the Institute of Medicine. Ratio lower than 1.0 indicates percent lower than average; ratio higher than 1.0 indicates percent higher than average. Median spending determined separately for the commercially insured and Medicare populations. regional performance (Appendix E), suggesting that three hospital referral regions was nearly double the incentives operated as part of a larger web of account- national median, helped in part by the use of managed ability to engage and empower physicians. care in state Medicaid programs. Previous research has Market and structural characteristics also likely associated greater HMO penetration with lower use play a factor in regional performance. The penetration of services and costs in local markets.8 In the study of health maintenance organizations (HMOs) in all sites, HMOs have provided a depth of experience with GREATER TUCSON: MAKING HEALTH A COMMUNITY PRIORITY With plenty of sunshine and temperate winters, the desert oasis that encompasses Tucson, Ariz. (population 521,000), seems to encourage outdoor activity and healthy behavior. Residents say opportunities abound to share in one another’s cultural traditions, creating a sense of community that is further reinforced by a rich array of nonprofit organizations that work together to identify shared values, spur economic development, and tackle health challenges as the local population grows. In 2003, the city’s mayor took on a challenge from U.S. Surgeon General to make the community a model of a healthy metropolis. One manifestation of these efforts is the construction of a 131-mile “loop” trail that provides opportunities for residents to bike, run, and walk; the trail is expected to generate $9.40 in economic benefit for every dollar invested in the project.9 See: S. Klein, D. McCarthy, and A. Cohen, Tucson and Southern Arizona: A Desert Region Pursuing Better Health and Health System Performance (New York: The Commonwealth Fund, April 2014), http://www.commonwealthfund.org/Content/Publica- tions/Case-Studies/2014/Apr/Tucson-and-Southern-Arizona-A-Desert-Region-Pursuing-Better-Health-and-Health-System- Performance.aspx. 6T he  C ommonwealth F und risk-based contracting and care management tech- health care referrals and access hospital discharge niques. The availability of primary care physicians, information and laboratory test results to improve care at per capita rates close to the regional median in all coordination and transitions. Tucson-area providers three sites, may have helped patient-centered medi- have established innovative teleconsultation programs cal home initiatives. Virtual physician organizations that improve access to care in outlying areas and such as independent practice associations and physi- reduce costly emergency helicopter transports. cian–hospital organizations are important in Western Other ways regions have employed com- New York and West Central Michigan, while providers munity cooperation and outreach include: programs in Southern Arizona appear to have internalized the that use trained volunteers to provide evidence-based principles of managed care through years of market chronic disease management programs in collaboration conditioning. with area providers; deployment of community health Health care providers in all three areas have workers in various roles, including safe and reliable been self-motivated to innovate as well. Many have care transitions from the hospital to the community; been ahead of the curve in adopting or advancing new and convening of community collaboratives to reduce models of care. West Central Michigan had one of the health disparities and improve health outcomes in nation’s first hospices, which began accepting patients minority communities. in 1981, and was one of the first areas of the country to use hospitalists, which helped to standardize care pro- Shared commitment to improving the cesses. More recently, the region’s medical education accessibility of care for underserved pop- programs have emphasized the importance of team- ulations based care. In both Western New York and Southern All three communities demonstrate a strong commit- Arizona, physicians have led the formation of account- ment to meeting the needs of the poor and underserved. able care organizations (ACOs). The ACOs are demon- In West Central Michigan, local philanthropists and strating how to “do managed care right”—using data hospitals joined Kent County more than a decade ago to support intelligent risk-profiling and targeting those to create a nonprofit that provided low-income resi- with high needs and at risk of costly care. dents with access to outpatient care and prescription medicine. Following coverage expansions under the Regional investment and cooperation to Affordable Care Act, the program is evolving to help apply information technology and engage residents use their health plan more effectively and community organizations avoid using hospital emergency departments. Hospitals Investments in regional health information exchanges and community-based safety-net providers in Western (HIEs)—made possible through cooperation among New York formed a coalition to identify geographic competitors—have been significant in two regions areas in need of services as well as to provide mutual and may have helped to reduce fragmentation and support for improving care coordination and engag- duplication of services. Western New York’s regional ing with policymakers. In Southern Arizona, where HIE, created by local health plans and hospitals with substance abuse and mental illness are significant the help of state and federal grants, is supporting the challenges, local voters approved bond initiatives to implementation of disease registries and decision- finance the development of two new behavioral health support tools to improve clinical care and workflow centers that provide a full continuum of services for in physician offices. In West Central Michigan, three patients, from triage and assessment in an emergency competing health systems invested in building a com- department to inpatient and outpatient care. munity HIE that is used by physicians to automate O pportunity for R egional I mprovement : T hree C ase S tudies of L ocal H ealth S ystem P erformance 7 DISCUSSION all three regions are in states with smoke-free worksite The findings from these case studies are generally policies, though their rates of smoking vary markedly. consistent with other research linking contextual fac- It remains to be seen whether local stakehold- tors—such as leadership, culture, social capital, and ers’ objectives for health system development can aligned incentives—to geographic health system be accomplished while retaining or enhancing their performance.10 The case studies also build on prior reputations as lower-cost regions. Medicare costs have literature by offering insight into the ways that com- been rising faster than the national median in West munities engage in regional improvement.11 Leaders Central Michigan, reflecting greater per capita use of in the study regions reported results of programs that services than in the past. Local leaders are concerned reduced hospitalizations, emergency department visits, about competitive market pressures that are testing the and medication costs. These programs are indicative of bounds of community accountability. Similarly, the broader performance improvement pathways that may creation of preferred networks of providers aligned contribute to lower wage-adjusted health care costs with particular health systems in Western New York in the study regions (Exhibit 3). Costs also are influ- may change the dynamics of market cooperation there. enced by factors such as regional demographics and The case study regions offer lessons in how health status.12 Yet, rates of premature mortality and civic-minded leaders can build social capital by of self-reported fair or poor health status were close to appealing to stakeholders’ sense of pride in their com- the median for all regions in Western New York and munities and by linking health and health care to a Southern Arizona (Appendix A), suggesting that lower common desire to overcome economic challenges health care costs were not attributable to healthier pop- and advance the well-being of their populations.14 ulations in those regions. (The premature mortality rate The Commonwealth Fund Commission on a High was somewhat lower than the median in West Central Performance Health System proposed the creation of Michigan.) Moreover, leaders in all three regions rec- 50 to 100 voluntary “health improvement communi- ognize the opportunity to lower costs further through ties” that bring together providers, payers, and other the promotion of better community health.13 local stakeholders to redesign payment policy, enhance Each of these communities has been savvy primary care access, leverage health information tech- about leveraging local philanthropy, state grants, nology, and create accountable care arrangements to and national funding opportunities to enhance and improve care for patients with high-cost chronic ill- expand their efforts. Public health officials in Southern nesses.15 Such initiatives might reduce health care Arizona, for example, emphasized the importance of spending by up to $184 billion over 10 years, accord- federal grants in supplementing community resources ing to an estimate.16 While the case study regions are to facilitate community health partnerships that address unique and their experiences cannot be replicated the social determinants of health. State policies sup- wholesale, they offer insights into pathways that other ported efforts to improve performance in various ways, communities might follow to foster collaboration and such as expanding access to Medicaid coverage and the pursuit of economically and socially desired goals fostering the “right-sizing” of hospital services in New for health system improvement. York State, delegating authority for local certificate-of- need reviews in West Central Michigan, and providing the mandate and startup funding for building a state- wide telemedicine infrastructure in Arizona. State pol- icy also supports local efforts to improve public health: 8T he  C ommonwealth F und 5 N otes D. McCarthy and A. Cohen, The Colorado Beacon Consortium: Strengthening the Capacity for Health Care 1 For a recent review of the literature, see: W. G. Manning, Delivery Transformation in Rural Communities (New E. C. Norton, and A. S. Wilk, Explaining Geographic York: The Commonwealth Fund, April 2013); and D. Variation in Health Care Spending, Use and Quality, McCarthy, R. Nuzum, S. Mika et al., The North Dakota and Associated Methodological Challenges (Institute of Experience: Achieving High-Performance Health Care Medicine Committee on Geographic Variation in Health Through Rural Innovation and Cooperation (New York: Care and Promotion of High Value Care, May 18, 2012). The Commonwealth Fund, May 2008). Also see: The Dartmouth Atlas of Health Care (Hanover, 6 According to the American Health Planning Association, N.H.: Dartmouth Institute for Health Policy and Clini- “Health services policymakers have used certificate- cal Practice); County Health Rankings (Madison, Wis.: of-need (CON) regulation to help shape the health care University of Wisconsin Population Health Institute); and system for more than three decades. The rationale for im- C. Schoen, D. C. Radley, P. Riley, J. A. Lippa, J. Beren- posing market entry controls is that regulation, grounded son, C. Dermody, and A. Shih, Health Care in the Two in community-based planning, will result in more appro- Americas: Findings from the Scorecard on State Health priate allocation and distribution of health care resources System Performance for Low-Income Populations, 2013 and, thereby, help ensure access to care, maintain or im- (New York: The Commonwealth Fund, Sept. 2013). prove quality, and help control health care capital spend- 2 D. C. Radley, S. K. H. How, A.-K. Fryer, D. McCarthy, ing.” The U.S. Department of Justice and the Federal and C. Schoen, Rising to the Challenge: Results from Trade Commission have argued against CON regulation a Scorecard on Local Health Performance, 2012 (New on anticompetitive grounds; see: Improving Health Care: York: The Commonwealth Fund, March 2012). Un- A Dose of Competition: A Report by the Federal Trade less otherwise indicated, regional data come from the Commission and the Department of Justice, July 2004, Local Scorecard or supplemental data prepared by the For a response, see: American Health Planning Associa- Scorecard team. The “All HRR Median” reported in the tion, “The Federal Trade Commission & Certificate of scorecard is not the same as “U.S. median,” but is rather Need Regulation: An AHPA Critique” (Falls Church, Va.: a “median among all regions.” AHPA, Jan. 2005), http://www.ahpanet.org/files/AHPAc- ritiqueFTC.pdf. 3 Network for Regional Health Improvement, Regional 7 Health Improvement Collaboratives: Essential Elements B. F. VanderLaan, A Legacy of Primary Care Support for Successful Healthcare Reform (Pittsburgh: Jewish Underscores Priority Health’s Leadership in Accountable Healthcare Foundation and Pittsburgh Regional Health Care (Grand Rapids, Mich.: Priority Health, July 2013); Initiative); D. P. Scanlon, J. Beich, J. A. Alexander et al., and D. A. Share and M. H. Mason, “Michigan’s Physi- “The Aligning Forces for Quality Initiative: Background cian Group Incentive Program Offers a Regional Model and Evolution from 2005 to 2012,” American Journal of for Incremental ‘Fee for Value’ Payment Reform,” Health Managed Care, Sept. 2012 18(6 Suppl.):s115–s125; A. Affairs, Sept. 2012 31(9):1993–2001. M. Rohan, B. C. Booske, and P. L. Remington, “Using 8 J. C. Robinson, “Decline in Hospital Utilization and Cost Wisconsin County Health Rankings to Catalyze Com- Inflation Under Managed Care in California,” Journal of munity Health Improvement,” Journal of Public Health the American Medical Association, Oct. 2, 1996 276(13): Management and Practice, Jan.–Feb. 2009 15(1):24–32; 1060–64; D. J. Gaskin and J. Hadley, “The Impact of Institute for Healthcare Improvement, The IHI Triple Aim HMO Penetration on the Rate of Hospital Cost Infla- Improvement Community; YMCA Activate America, tion, 1985–1993,” Inquiry, Fall 1997 34(3):205–16; G. F. Pioneering Healthier Communities: Lessons Learned Anderson, N. Zhang, and C. Worzala, “Hospital Expen- and Leading Practices (Chicago: YMCA of the USA, ditures and Utilization: The Impact of HMOs,” American 2006); and Centers for Disease Control and Prevention, Journal of Managed Care, July 1999 5(7):853–64; and “Racial and Ethnic Approaches to Community Health M. A. Morrisey, “Competition in Hospital and Health (REACH),” (Atlanta: CDC), http://www.cdc.gov/nccd- Insurance Markets: A Review and Research Agenda,” php/dch/programs/reach/index.htm. Health Services Research, April 2001 36(1 Pt. 2):191– 4 Poverty was defined as percentage of people with fam- 221. ily income below the federal poverty level. One other 9 Pima County, Ariz., The Loop: Economic, Environmen- top-performing region of greater than 1 million people— tal, Community, and Health Impact Study. Rochester, N.Y.—also had a poverty rate comparable to the poverty rates in the Buffalo and Grand Rapids regions. O pportunity for R egional I mprovement : T hree C ase S tudies of L ocal H ealth S ystem P erformance 9 10 15 S. Silow-Carroll and G. Moody, Lessons from High- D. Blumenthal, “Performance Improvement in Health and Low-Performing States for Raising Overall Health Care—Seizing the Moment,” New England Journal of System Performance (New York: The Commonwealth Medicine, April 26, 2012 366(17):1953–55. Fund, May 2011); J. Williams, “Geographic Variations 16 in Health Care Utilization: Effects of Social Capital and Commission on a High Performance Health System, The Self-Interest, and Implications for U.S. Medicare Policy,” Performance Improvement Imperative: Utilizing a Co- Socioeconomic Review, 2012 10(2):317–42; and C. Simon, ordinated, Community-Based Approach to Improve Care “Geographic Variation in Cost, Quality and Population and Lower Costs for Chronically Ill Patients (New York: Health,” presentation at the AcademyHealth Annual The Commonwealth Fund, April 2012). Research Meeting, Baltimore, Md., June 23, 2013. 11 S. T. Roussos and S. B. Fawcett, “A Review of Collab- orative Partnerships as a Strategy for Improving Com- munity Health,” Annual Review of Public Health, 2000 21:369–402; E. Wagner, B. Austin and C. Coleman, It Takes a Region: Creating a Framework to Improve Chronic Disease Care (Oakland: California Healthcare Foundation, Nov. 2006); and L. R. Hearld and J. A. Alexander, “Governance Processes and Change Within Organizational Participants of Multi-Sectoral Community Health Care Alliances: The Mediating Role of Vision, Mission, Strategy Agreement and Perceived Alliance Value,” American Journal of Community Psychology, March 2014 53(1–2):185–97. 12 Given its large population of Hispanic Americans, the Tucson region’s performance on measures of healthy lives may be influenced by the so-called “Hispanic paradox,” whereby Hispanic Americans experience better health outcomes than would be expected given their gen- erally lower socioeconomic status compared with non- Hispanic white Americans; see: J. M. Ruiz, P. Steffen and T. B. Smith, “Hispanic Mortality Paradox: A Systematic Review and Meta-Analysis of the Longitudinal Litera- ture,” American Journal of Public Health, March 2013 103(3):e52–e60. 13 Grand Valley State University, “Health Check: Analyz- ing Trends in West Michigan”; L. Tumiel-Berhalter, C. Crespo, and D. Rowe, The Western New York Public Health Alliance Health Risk Assessment Update, 2004– 2005 (Buffalo: State University of New York, University at Buffalo, Population Health Observatory, 2005); Erie County, New York, “2014–2017 Community Health As- sessment”; and University of Arizona College of Public Health, Pima County Health Needs Assessment, March 2012. 14 Social capital refers to “resources stored in human relationships” (X. de Souza Briggs, “Social Capital and the Cities: Advice to Change Agents,” presentation to an International Workshop on Community Building, The Rockefeller Foundation, Bellagio, Italy, Oct. 1997). Also see: R. Putnam, Bowling Alone: The Collapse and Revival of American Community (New York: Simon & Schuster, 2000). 10T he  C ommonwealth F und Appendix A. Demographic, Market, and Health Indicators for Study Regions (HRRs) West Nationwide distribution among 306 HRRs Central Western Michigan Southern 25th 75th Data New York (Grand Arizona Mini- per- percen- Maxi- Data source years (Buffalo) Rapids) (Tucson) mum centile Median tile mum Demographic characteristics Total population 1,376,405 1,164,560 1,298,642 129,587 347,789 616,212 1,198,114 9,991,405 American Com- 2007– Age under 18 munity Survey, 21.9 26.0 23.3 15.1 22.4 23.7 25.0 33.7 2011 U.S. Census Age 65 and older 15.7 12.0 15.2 7.5 12.0 13.6 15.2 34.5 1 Race White 83.7 86.4 78.5 24.1 71.5 82.6 88.9 96.8 American Com- Black or African American 2007– 10.6 5.9 3.3 0.3 2.6 6.5 15.0 51.6 munity Survey, 2011 U.S. Census Other race or multiracial 5.7 7.7 18.2 1.7 4.6 7.4 13.0 73.6 Ethnicity Hispanic or Latino 4.0 7.8 35.4 0.9 3.3 6.6 15.6 89.9 Non-Hispanic, white 81.5 82.4 55.4 8.3 59.5 74.4 85.4 96.1 Non-Hispanic, black or African American 10.3 5.7 3.0 0.3 2.5 6.3 14.8 51.3 Non-Hispanic, other race or multiracial 4.2 4.2 6.2 0.9 3.1 4.1 6.5 66.9 American Com- 2007– Median household income munity Survey, $50,116 $51,371 $48,049 $31,000 $44,498 $49,276 $57,605 $106,605 2011 U.S. Census Percent below federal poverty level (FPL) 14.2 14.8 17.9 4.9 12.1 14.8 17.2 36.8 Percent below 200% FPL 31.4 33.7 38.6 14.2 29.4 34.5 38.7 64.0 High school education or less, adults over age 25 44.0 43.4 38.6 21.3 40.4 45.3 50.7 66.8 Bachelor’s degree or higher 26.3 25.7 27.1 13.1 19.9 24.1 28.7 54.4 Market characteristics Hospital beds per 1,000 population Dartmouth Atlas 2006 2.6 2.1 2.0 1.4 2.1 2.4 2.9 4.7 Medicare Provider 1,616 3,748 1,563 Hospital market concentration2 2010 149 1,515 2,541 3,980 10,000 of Service File (moderate) (high) (moderate) Primary care physicians per 100,000 residents 68.0 66.6 66.7 43.9 62.4 68.8 77.5 117.0 Dartmouth Atlas 2006 Specialty physicians per 100,000 residents 118.6 107.1 124.3 68.3 106.5 117.5 130.4 215.0 Market share of top three insurers (commercial) Managed Market 73.0 84.2 65.1 39.3 68.4 74.6 80.7 93.6 Surveyor, Health- 2010 HMO penetration (among all payers) leaders-Interstudy3 30.5 31.4 30.2 0.2 7.6 16.5 23.1 56.6 Total reimbursements per commercially insured Commercial claims4 2009 $2,228 $2,919 $2,603 $2,014 $3,010 $3,314 $3,617 $5,068 patient under age 65 Total standardized Medicare (Parts A & B) IOM analysis of 2009 $7,800 $7,857 $7,556 $5,313 $7,514 $8,483 $9,271 $16,825 spending per beneficiary Medicare claims5 Percent change in standardized Medicare IOM analysis of 2007– 11.8 18.8 9.2 –9.4 0.1 10.5 14.5 24.9 spending per beneficiary (2007–2011) Medicare claims5 2011 Health indicators and outcomes Mortality amenable to health care, deaths per CDC—NVSS 2007– 92.3 82.9 91.2 51.5 78.9 91.3 108.8 169.0 100,000 population (Hempstead) 2009 Percent of adults who smoke 20.7 17.7 14.3 6.2 15.7 19.0 21.9 30.9 Behavioral Risk Percent of adults who are obese (BMI >= 30) 2009– 28.3 30.3 29.5 15.3 26.5 29.5 32.9 45.6 Factor Surveillance 2010 Percent of adults reporting fair/poor health, 14+ System 30.0 28.6 31.1 17.9 26.6 29.5 33.1 42.0 bad mental health days, or activity limitations Note: HRR = hospital referral region. 1 In order to provide a clear, simplistic demographic picture of race, the authors elected to stratify each region’s population by those identifying as white only, black or African American only, or any other race or combination of racial backgrounds. These three categories capture 100 percent of the population, with Hispanic or Latino ethnicity recorded separately. 2 Market concentration is calculated using the Herfindahl-Hirschmann Index (HHI). General standards outlined by the U.S. Department of Justice divide the spectrum of market concentration into three broad categories: unconcentrated (HHI below 1,000), moderately concentrated (HHI from 1,000 to 1,800), and highly concentrated (HHI above 1,800). 3 Commonwealth Fund’s analysis of Managed Market Surveyor, Healthleaders-Interstudy (Jan. 2010). Used with Permission. All Rights Reserved. 4 Commercial spending estimates provided by M. Chernew, Harvard Medical School Department of Health Care Policy, analysis of the Thomson Reuters MarketScan Database. Total per-enrollee spending estimates generated from a sophisticated regression model include reimbursed costs for health care services from all sources of payment, including the health plan, enrollee, and any third-party payers incurred during 2009. Outpatient prescription drug charges are excluded, as were enrollees with capitated plans and their associated claims. Estimates for each HRR were adjusted for enrollees’ age and sex, the interaction of age and sex, partial-year enrollment, and regional wage differences. 5 Analysis performed by the Institute of Medicine. Total Medicare per-person spending estimates include payments made for hospital (part A) and outpatient (part B) services. Estimates exclude extra payments to support graduate medical education and treating a disproportionate share of low-income patients. Data are standardized by making adjustments for regional wage differences. O pportunity for R egional I mprovement : T hree C ase S tudies of L ocal H ealth S ystem P erformance 11 Appendix B. Select Community Contextual Factors Region (HRR) Western New York West Central Michigan Southern Arizona Factors (Buffalo) (Grand Rapids) (Tucson) Second-largest metropolitan area Second-largest metropolitan area Second-largest metropolitan area Relative size in state in state in state Declining (–3.0% from 2000 to Growing (4.5% from 2000 to 2010) Fast growing (16.2% from 2000 to Population change1 2010) 2010) Above average (rank 75 of 200 Average (rank 100 of 200 cities); Below average (rank 150 of 200 Economy: job and cities); predominance of service- headquarters of several national cities); some high-tech but many wage growth2 sector jobs firms low-wage jobs 33% below the median 12% below the median 21% below the median Health care costs3 (commercial) (commercial) (commercial) (2009) 8% below the median (Medicare) 7% below the median (Medicare) 11% below the median (Medicare) University at Buffalo medical school Michigan State University medical University of Arizona provides Educational is partnering with a local health school campus and local allied expertise for developing evidence- institutions system to create an academic health programs support health based community initiatives and medical center. workforce development. neighborhood coalitions. Community/family foundations Local philanthropists fund (Interviewees did not mention as a support innovations that improve infrastructure; health system factor.) Local philanthropy safety-net access and promote care foundation provides $6 million transformation. annually for health programming. Second-highest Medicaid spending Below-average Medicaid spending Near-average Medicaid spending State Medicaid per enrollee among U.S. states; the per enrollee among U.S. states; per enrollee among U.S. states; policy4 majority are enrolled in capitated most are enrolled in capitated delivered exclusively through managed care. managed care. capitated managed care. Statewide (worksites, restaurants, Statewide (worksites, restaurants, Statewide (worksites, restaurants, Smoke-free policy4 bars) bars) bars) Shared commitment to developing Conservative social values and Progressive values and pride of Cultural values and a high-quality, efficient care engaged employer community place inspire efforts to promote shared motivations system as a means of fostering an contributes to a sense of healthy lifestyles and meet the economic revitalization. stewardship for shared resources. needs of the underserved. Income inequality (inner city is Rising health care costs and market Poverty (sixth-highest among large among the poorest in U.S.) and competition are testing the bounds metro areas); drug trafficking and Challenges health disparities particularly in of community accountability. substance use; health disparities medically underserved areas; particularly in health professional dependence on external funding. shortage areas. Note: HRR = hospital referral region. Sources: Authors’ analysis of case study interviews and background information unless otherwise noted below. 1 W. H. Frey, Population Growth in Metro America Since 1980, Brookings Institution, 2012. 2 Milken Institute, Best-Performing Cities 2012. Rankings reflect 200 large metropolitan areas during 2005–2011. 3 M. Chernew analysis of Thomson Reuters MarketScan Database and IOM analysis of Medicare claims (see Appendix A, note 4 for source notes). Differences in costs reflect differences in both prices and service use for commercial enrollees, but differences only in service use among Medicare beneficiaries. 4 Kaiser Family Foundation, State Health Facts. 12T he  C ommonwealth F und Appendix C. Local Health Care Marketplace Characteristics in Case Study Regions Region (HRR) Western New York West Central Michigan Southern Arizona Characteristics (Buffalo) (Grand Rapids) (Tucson) The 17-hospital region is moderately The 14-hospital region is The 16-hospital region is moderately concentrated around two large concentrated around three health concentrated around four health nonprofit health systems: a three- systems: a nonprofit nine-hospital systems: a three-hospital nonprofit hospital Catholic system, and a system formed through a community- Catholic system, the two-campus Hospitals and health systems recent affiliation between a five- directed merger, a nonprofit Catholic University of Arizona academic hospital system and a county system that is integrating across the medical center, a large nonprofit hospital that was orchestrated by the region, and an osteopathic hospital community hospital, and a two- state to “right-size” hospital capacity that recently affiliated with a for-profit campus medical center owned by a in the region. chain. national for-profit chain. Most area physicians practice alone Health systems employ an Small, independent, single-specialty or in small groups, often as members increasing number of physicians in physician practices are experienced of IPAs affiliated with health systems affiliated medical groups, but most with managed care. Large medical Physician or plans. Employed physicians physicians continue to practice groups include primary care practices and medical groups practice in system-affiliated or independently, typically as members providers employed by the Catholic independent medical groups and the of virtual physician organizations system, the University’s faculty medical school faculty practice. such as PHOs that play a key role in practice, and an independent local medical culture. federation of private physicians. Several FQHCs and “look-alike” A large FQHC operates 15 clinics Several FQHCs serve the area, the community clinics are collaborating primarily in the city of Grand Rapids; largest of which operates clinics and Safety-net clinics to identify and fill unmet needs the Catholic system runs five urban programs in 15 locations around throughout the region. and rural centers for uninsured and Greater Tucson. underserved patients. Regional nonprofit health plans Statewide and regional nonprofit National, state, and local health partner with physicians to adopt health plans offer incentives for plans; some support primary care common performance metrics quality improvement by supporting medical homes or provide navigators Health plans and design flexible incentives that investments in primary care to help patients participate in disease promote regional improvement. infrastructure and physician management. organizations. A large IPA formed a Medicare ACO Two local physician organizations An independent community hospital in partnership with the Catholic are participating in a statewide partnered with 180 physicians in Local system. Medicare ACO with the Ann Arbor– private practices and FQHCs to form participation A multihospital coalition is based University of Michigan Health an ACO serving privately insured and in health care participating in the federal CBCT System. Medicare patients. delivery reform program to reduce readmissions of An area council on aging is initiatives high-risk elderly patients. collaborating with the Catholic health system to participate in the federal CBCT program. Note: ACO = accountable care organization; CBCT = community-based care transitions; FQHC = federally qualified health center; HRR = hospital referral region; IPA = independent practice association; PHO = physician–hospital organization. Source: Authors’ analysis of interviews, background documents including HealthLeaders-InterStudy Market Overviews, and publicly available information. O pportunity for R egional I mprovement : T hree C ase S tudies of L ocal H ealth S ystem P erformance 13 Appendix D. Summary of Regional Pathways to Higher Performance Region (HRR) Western New York West Central Michigan Southern Arizona (Buffalo) (Grand Rapids) (Tucson) 1) Regional collaboration to improve 1) Regional planning and accountability 1) Community organizing efforts to health care delivery and population health to promote efficient use of resources and promote health and physical activity Example: A regional “coalition of coalitions” enhance health care value Example: A community-wide health campaign convenes stakeholders to advance Example: Locally conducted certificate-of- advocates and offers technical assistance for population health and build improvement need reviews have helped limit duplicative establishing nutrition programs in schools, capacity. In one effort, county health investments in high-cost services such as health ministries in faith-based organizations, departments, local hospitals, and community medical imaging equipment, contributing to wellness programs in businesses, and groups are creating a community health comparatively lower use and costs of such healthy food choices and physical activity in improvement plan for the entire region. services in the region. neighborhoods. 2) Partnership between regional health 2) Mutually reinforcing efforts and 2) Use of refined managed care plans and physicians to improve quality incentives to improve quality techniques to improve quality and drive Example: Physician groups use capitated Examples: Health plan performance efficiency payment and performance incentives incentive programs have enabled primary Example: A multisite community health from health plans to adopt EHRs, hire care physicians to develop the infrastructure center assign nurses to follow patients after care coordinators, and implement disease for patient-centered medical homes; the they are discharged from area hospitals to registries to improve care transitions and programs are associated with improved make sure they have their medications and disease management, achieving a positive quality and reduced use of hospital and understand next steps in care, leading to a return on health plan investment. radiology services among participants. 20 percent drop in readmissions. Pharmacy- based diabetes clinics help patients manage 3) Investment in health information 3) Community outreach to address health drug regimens and engage in self-care. technology infrastructure needs of underserved populations Example: In 2012, 95 percent of laboratory Example: An interconception care program 3) Collaboration to improve continuity of test results and 85 percent of radiology encourages good nutrition, dental care, and care and chronic disease management reports generated in the region were birth spacing of at least 18 months among Example: The Pima County Council on Aging available electronically to physicians through women who have previously experienced a trains volunteers who cooperate with health a regional health information exchange bad pregnancy outcome, leading to longer systems and community organizations to organization, helping to speed diagnosis and pregnancy terms, higher infant birthweights, help older adults remain independent in their reduce duplication of services. and fewer NICU admissions. homes, by educating them about risk of falls and self-management of chronic conditions. 4) Leveraging local resources to improve 4) Commitment to strengthening the public health and extend the safety net safety net for uninsured and low-income 4) Programs to address the needs of Example: Bringing together local safety-net residents underserved and uninsured residents providers created a communication bridge Example: Kent County’s Children’s Example: A telemedicine program created between hospitals and outpatient clinics, Healthcare Access Program draws on by a local health system offers cardiology which led to a program to reroute uninsured philanthropic dollars to strengthen primary consults to critical access hospitals, reducing patients from EDs to primary care sites, care for 15,000 low-income children enrolled the need for costly helicopter transports and some of which have extended their hours to in a regional Medicaid health plan, leading to saving $500,000 in a six-month period at meet patients’ needs. improved asthma control, reduced ED visits, one site. and fewer missed school days. Note: EHR = electronic health record; ED = emergency department; NICU = neonatal intensive care unit. Source: Authors’ analysis of case study interviews and background documents. 14T he  C ommonwealth F und Appendix E. Relevance of Various Factors to Regional Health System Performance, as Rated by Local Stakeholders Average rating by region (1 = low importance, 3 = high importance) West Central Western Michigan Southern New York (Grand Arizona (Buffalo) Rapids) (Tucson) Combined (N=7) (N=9) (N=6) average Stakeholder role-based factors Providers or provider groups or associations (e.g., hospital, physician, FQHC) 2.6 2.7 2.7 2.6 Private payers (e.g., insurers, health plans, self-insured employer groups) 2.6 2.6 2.5 2.5 Community-based organizations (e.g., council on aging, YMCA, Citizens’ 1.9 2.1 2.7 2.2 League, etc.) Employers (e.g., engagement in employee health and wellness programs or 1.9 2.4 2.0 2.1 health care improvement initiatives) Consumers (e.g., engagement in health promotion) 1.7 1.9 2.3 2.0 Public payers (e.g., Medicare, Medicaid, CHIP) 1.4 1.9 2.2 1.8 Local health-related government agencies (e.g., public health departments) 1.6 1.9 2.0 1.8 Instrumental factors Collaborative efforts among key stakeholders to identify, prioritize, and/or 2.6 2.6 2.2 2.4 address local health needs Participation in demonstration projects (e.g., patient-centered medical homes, 2.6 2.1 2.5 2.4 ACOs, etc.) Regional initiatives to address a particular problem (e.g. chronic disease, 2.1 1.6 2.5 2.1 hospital-acquired infections, readmissions) Use of health information technology and electronic health records to improve 2.4 1.7 2.2 2.1 performance Efforts to address the needs of the uninsured 2.2 1.7 2.3 2.1 Learning collaboratives to train health care providers in quality improvement 2.0 1.8 1.8 1.9 techniques Pay-for-performance programs 2.1 1.9 1.5 1.8 Technical assistance from regional extension centers, QIOs, or other sources 2.1 1.2 1.7 1.7 Public reporting of performance measures 1.7 1.4 1.8 1.7 Public policy initiatives 1.9 1.2 1.8 1.6 Participation in programs organized by external entities (e.g., IHI, GPOs, CDC, 1.3 1.8 1.7 1.6 HRSA, etc.) * Respondents to a preinterview written questionnaire were asked the following: “To understand the factors that play a significant role in regional performance on health care access, quality, efficiency, and population health, please indicate the importance of the following in the [region], by ranking them of high, medium, or low relevance, or not applicable.” Ratings were converted into a numeric scale where 1=Low and 3=High. Responses of not applicable (N=3) were given a numeric rating of zero. Items without a response (N=3) were not given a rating. Source: Authors’ analysis of case study interviews and background documents. O pportunity for R egional I mprovement : T hree C ase S tudies of L ocal H ealth S ystem P erformance 15 A bout the A uthors Douglas McCarthy, M.B.A., directed this project as senior research adviser at the Institute for Healthcare Improvement from 2011 to 2013. He currently serves as senior research director for The Commonwealth Fund, where he oversees the Fund’s Scorecard project, conducts case-study research on delivery system reforms and breakthrough opportunities, and serves as a contributing editor to the bimonthly newsletter Quality Matters. His 30-year career has spanned research, policy, operations, and consulting roles for government, corporate, aca- demic, nonprofit, and philanthropic organizations. He has authored and coauthored reports and peer-reviewed articles on a range of health care–related topics, including more than 50 case studies of high-performing organiza- tions and initiatives. Mr. McCarthy received his bachelor’s degree with honors from Yale College and a master’s degree in health care management from the University of Connecticut. During 1996–1997, he was a public policy fellow at the Hubert H. Humphrey School of Public Affairs at the University of Minnesota. Sarah Klein is an independent journalist in Chicago. She has written about health care for more than 10 years as a reporter for publications including Crain’s Chicago Business and American Medical News. She serves as editor of Quality Matters, a newsletter published by The Commonwealth Fund. Ms. Klein received a B.A. from Washington University and attended the Graduate School of Journalism at the University of California, Berkeley. Alexander (Sandy) Cohen, M.P.H., M.S.W., a research associate at the Institute for Healthcare Improvement (IHI), supports qualitative research of high-performing local and regional health systems, as well as the design and rollout of a formative evaluation system applied to a range of IHI quality improvement projects. For more than five years he has engaged in a diverse spectrum of health services research and practice across academic, nonprofit, and community-based settings, specializing in mental and behavioral health services, care management systems, and health care reform. Mr. Cohen received master’s degrees in clinical social work and public health, concentrating in health policy and management, from Boston University. A cknowledgments This case study was developed as part of a grant from The Commonwealth Fund to the Institute for Healthcare Improvement. The authors are grateful to the many individuals in each region who shared their perspectives on the case study regions (see the Acknowledgments in each case study report). The authors also thank the fol- lowing individuals who shared insights on local health system performance as background for the project: Erin Bonzon, M.S.W., M.S.P.H., National Association of County and City Health Officials; Julie Willems Van Dijk, R.N., Ph.D., University of Wisconsin, Population Health Institute; Carol Beasley, Ninon Lewis, Zoe Sifrim, and John Whittington, M.D., Institute for Healthcare Improvement; Len Nichols and Jay Shiver, Department of Health Administration and Policy, George Mason University; Dennis Scanlon, Ph.D., Pennsylvania State University; and Romana Hasnain-Wynia, Ph.D., Patient-Centered Outcomes Research Institute. The authors also thank Anne-Marie Audet, M.D., M.Sc., David Radley, Ph.D., Cathy Schoen, and the communications staff at The Commonwealth Fund for advice on and assistance with case study preparation. Editorial support was provided by Joris Stuyck. The views presented here are those of the authors and not necessarily those of the Institute for Healthcare Improvement or The Commonwealth Fund or their directors, officers, or staff. This case study was based on publicly available infor- mation and self-reported data provided by the case study participants. The Commonwealth Fund is not an accreditor of health care organizations or systems, and the inclusion of an institution in the Fund’s case study series is not an endorsement by the Fund for receipt of health care from the institution. www.commonwealthfund.org