Rural Integrated Systems In California: Preparing For Managed Care
1999; Project HOPE; Volume: 18; Issue: 5 Linguagem: Inglês
10.1377/hlthaff.18.5.237
ISSN2694-233X
AutoresS Weisgrau, Luisa Buada, Martha Campbell, Ira Moscovice,
Tópico(s)Healthcare Policy and Management
ResumoGrantWatch Health AffairsVol. 18, No. 5 Rural Integrated Systems In California: Preparing For Managed CareSheldon Weisgrau, Luisa Buada, Martha Campbell, and Ira Moscovice AffiliationsSheldon Weisgrau is an independent consultant with Rural Health Consultants in Lawrence, Kansas. Luisa Buada is executive director of the California Institute for Rural Health Management in Oakland. Marty Campbell is a program director and the director of evaluation at the James Irvine Foundation, based in San Francisco. Ira Moscovice, who is evaluating the Developing Rural Integrated Systems Initiative, is a professor in the Division of Health Services Research and Policy and director of the Rural Health Research Center at the University of Minnesota's School of Public Health in Minneapolis.PUBLISHED:September/October 1999Free Accesshttps://doi.org/10.1377/hlthaff.18.5.237AboutSectionsView PDFPermissions ShareShare onFacebookTwitterLinked InRedditEmail ToolsAdd to favoritesDownload CitationsTrack CitationsPermissionsDownload Exhibits TOPICSManaged careHealth care providersSystems of careDecision makingMarketsCommunity healthGrantsAccess to careCosts and spendingQuality of care The recent rapid growth of managed care has been largely an urban phenomenon. Given their narrow population and economic bases, many rural communities lack the volume necessary for the cost-effective management of health care, which is required under managed care systems. 1 As a result, providers in many rural areas are only peripherally influenced by recent changes in health care financing, and these providers continue to operate under fee-for-service or cost-based reimbursement systems. However, market forces and government initiatives, among other factors, are forcing change on the existing health care organization and financing systems in these communities. As both the public and private sectors shift to managed care and other strategies for controlling health care costs, many rural communities and providers are seeking to respond to this administrative and financial environment. Preserving local access to services and gaining control of local premium dollars are particularly important to rural communities, for both the health of their residents and for economic well-being.In response to this rapidly changing environment, the James Irvine Foundation launched a four-year, $6 million initiative in 1997. The goals of the Developing Rural Integrated Systems (DRIS) Initiative are to help rural California communities to better understand managed care and to spur the development of integrated, community-based health systems that can operate effectively in the changing managed care marketplace.The DRIS ModelThe DRIS Initiative is designed to support a community-based dialogue and planning process that engages various parties in the community and results in the creation of integrated health systems at each participating site. Under the DRIS Initiative, integration can occur at different levels of the health care system: clinical (the coordination of patient care services); functional (the coordination of key support or administrative functions); and/or financial (the sharing of capital, risks, and profits).The primary value of the DRIS Initiative is that it provides a structured framework for rural communities to examine their health care delivery systems. The framework involves three phases of activity, defined as follows. Phase I includes data collection and assessment, community education, formation of local community health councils, and selection of managed care functions. Phase II includes feasibility analysis of the selected functions, defining governance of the cooperative entity or network, developing a business plan, and planning operations.Phase III involves implementation of the integrated system. DRIS is being implemented in four rural areas of California: Humboldt/Del Norte Counties, Imperial County, the Ridgecrest/Indian Wells Valley in Kern County, and the Lompoc Valley in Santa Barbara County. All of the DRIS sites are now involved with a range of Phase II activities.At each site local leaders form a community health council, comprising representatives of local business, health care providers (including the local hospital and primary care and specialist physicians), public health, health care consumers, and others. Although the council is not incorporated, it serves as the local governing body for each project, providing community representation, project direction, and local decision making.Each council meets regularly to assess the existing health system and the overall quality of health care in the community. Based on this assessment, the council determines an appropriate scope of services for the community, the appropriate mix of providers to deliver those services, and the arrangements for a single accountable entity that provides some or all of the support functions necessary to administer a health plan.As in all aspects of the initiative, the makeup and operations of each council reflect local market and political realities, and structure and leadership vary widely. In Humboldt/Del Norte, for example, the decision-making body for the project is the Regional Health Council, which is made up of both regionwide representatives and the leaders of six district committees representing local areas. In Lompoc the community health council functions in an advisory capacity to the board of the Lompoc Valley Community Health Organization, a tax-exempt 501(c)(3) organization created through the DRIS Initiative.Three core operating principles guide activity at each site and at each stage of the process: (1) Decisions are informed by credible data; (2) a cross-section of the community is involved in the planning and decision-making process; and (3) each site chooses and implements one or more strategies or functions that will better position local health care providers to operate under managed care.The initiative is administered by the California Institute for Rural Health Management (CIRHM), a nonprofit organization based in Oakland. CIRHM does overall program coordination for the DRIS Initiative by providing technical assistance and education, encouraging cross-fertilization of ideas across project sites, and disseminating learning to the field. For each site the initiative covers the costs of a full-time local coordinator, a community health systems consultant, and a team of technical consultants to work with local leaders.An independent evaluation of the DRIS Initiative is documenting how participating rural communities adopt strategies consistent with this model and whether network development provides any benefits for rural providers and communities. From a community perspective, a central issue is how a community can maintain control of health care decision making while at the same time accepting support and guidance from external entities such as private foundations, consultants, government, and nonlocal health care organizations. Key measures being tracked in the DRIS Initiative include the level of integration and coordination of health care services and to what degree health care dollars are staying in the rural communities.Distinguishing CharacteristicsThe DRIS Initiative is different from most grant programs in several respects. First, it is not categorical—it does not target a specific population or disease. The initiative uses a systems approach to change and engages a broad cross-section of the community, including providers, employers, community leaders, and others, in an inclusive dialogue and planning process.Second, DRIS does not award grant funds directly to participating communities. Instead, expert consultants provide sites with extensive technical assistance in community facilitation, market analysis, managed care systems development, and legal analysis. These consultants act as neutral facilitators in the decision-making process.During Phase I and Phase II the only funding that DRIS sites receive directly is “milestone grants,” which are awarded to the respective local councils if and when sites achieve specific project outcomes. These grants are not awarded based on strict time-lines but are tied to achievement of particular objectives to allow each site to progress at a pace appropriate to its circumstances. In addition, each DRIS site is eligible to receive up to $200,000 for implementation (Phase III). The use of specific funding parameters and milestone grants has been instrumental in helping to resolve conflicts, advance integration, and sustain voluntary community efforts.“DRIS is unique among rural health initiatives in its data-based approach and its consideration of market imperatives in managed care.”A third distinctive aspect of the DRIS approach is its reliance on community-specific data to steer decision making. A team of data consultants in each participating community uses existing local, state, and federal information sources and collects primary data through community surveys and key informant interviews. These tools then are used to create a “market snapshot” of each site and assess existing services, community needs, levels of service integration, and health insurance status.Based on the data, all four project sites have selected managed care strategies involving development of community- or provider-owned administrative services organizations (ASOs) to carry out a range of administrative and medical management functions. The scope of functions to be performed by the ASOs, however, varies from site to site. Those now being considered by the sites include provider contract negotiations and management, claims administration, member services, medical management, credentialing, marketing, information system linkages, risk management services, and community health improvement. In each case, development of the ASO reflects the community's desire to exert local control and promote local values as it deals with large regional and national managed care organizations.Lessons LearnedThe DRIS process thus far has revealed several fundamental lessons, which will be useful as the project moves forward and which can guide similar systems-development efforts in the future. These lessons, which are not unique to any particular site, are instructive to funders or policymakers considering projects that emphasize similar community-based systems approaches. The DRIS model also may be useful in programs such as the Medicare Rural Hospital Flexibility Program (part of the Balanced Budget Act of 1997), which emphasizes a network-building approach to health care access and support of community providers.FLEXIBILITYInitiative models must be flexible. Although the key components of DRIS—a community-based process; data-driven decision making; and expert, neutral facilitation—must be present at each site, the process must evolve organically and not according to prescribed menus and timelines. Issues that affect the rate of progress include the quality of local leadership, the organization and commitment of local providers, historical relationships and level of trust among participants, and the ability to integrate DRIS into existing activities.EXTERNAL ENVIRONMENTThe external environment is a critical factor in the development of integrated health systems. Perceiving that the external “threat” of managed care is imminent is a powerful motivator for forming a network and encouraging providers to assume meaningful risk. Communities that are relatively close to urban areas or otherwise perceive impending market penetration by managed care organizations exhibit greater cohesion and more willingness to hold the higher good of the community above institutional interests. In communities that do not feel a similar threat, there is less urgency to move forward with a community-based process, and ongoing internal conflicts continue to play a major role in local discussions. These local areas require strong leadership from employers or other parties to gain providers' acceptance of managed care initiatives and to help overcome local resistance to change.COMMUNITY HEALTH COUNCILSThe councils have broadened local participation in health system decision making. In each of the DRIS sites, councils have increased the diversity of local participation in health systems development to include women, minorities, the public health and behavioral health sectors, social services providers, civic leaders, and consumers. This broad-based community involvement may serve to sustain the process where narrow provider and employer interests might otherwise run into obstacles.PROVIDER AND EMPLOYER PARTICIPATIONWhen creating a business venture, the participation of providers and employers remains the most critical factor. Active participation by physicians and hospital leaders is essential for the progress of the initiative. In addition, the concerns of large employers have proved critical in influencing providers' behavior. When local employers are interested in capping their health care costs and voice managed care values, they can push providers toward integration and risk-sharing behavior. If employers are unaffected by or uninterested in managed care, however, there is little pressure on providers to work together. Small employers, as well as Medicare and Medi-Cal (California Medicaid) consumers and advocates, on the other hand, have wielded less influence on the DRIS sites.PUBLIC DEBATEA public discourse generates discomfort and criticism and must be well managed. The DRIS process is based on the principle that health systems change warrants widespread public discussion and debate and should not be decided by a small group of providers behind closed doors. During the initiative's first year, in sites where the providers felt vulnerable—both in the DRIS process and more generally in the changing health care market—the negative reaction to CIRHM and the project was particularly strong and vehement. A perceptible shift occurred in the second year; providers evolved from pointing fingers at CIRHM or other perceived external enemies to taking a serious look at opportunities for creating a locally operated and controlled provider network.Several factors facilitated this change, including the following: (1) The data challenged existing beliefs and brought unexpected issues to light; (2) increased market pressure induced providers and employers to consider new ways of doing business and giving up some coveted autonomy; and (3) the external facilitators, along with influential, committed local leadership, helped to focus the debate on improvement of health care quality and costs.FUNCTIONS FIRSTCIRHM has kept the communities focused on identifying functions before leaping to establish the integrated system and its governance structure. Stake-holders often find it easier (and more comfortable) to contemplate board membership and the balance of power than to craft functional business ventures and engage in the analysis, negotiation, and other work necessary to create these ventures. CIRHM has learned from experience and strongly believes that “form follows function” and that organization and governance of a cooperative venture must reflect the tasks that it will carry out.FLOW CHART NEEDEDIn complex community-based initiatives, the lines of communication and accountability among the intermediary organization, the sites, and the consultants need to be negotiated and established up front. Because rural communities often lack access to the technical expertise necessary to analyze issues and options and proceed with network development, DRIS provides these resources to the participating sites. However, the amount of time needed, the complexity of the process, and the number of external actors involved in DRIS far surpassed the expectations of all involved.External entities assumed the roles of data collector and analyst, facilitator, neutral convener, arbitrator, educator, trainer, and funder. Having myriad actors, many with overlapping roles, was confusing in some sites and reinforced a perception that DRIS was CIRHM driven, not community driven. As a result, more time than anticipated was required for CIRHM to build trust with the communities and achieve local ownership of the change process.THE LURE OF IMPLEMENTATION FUNDINGThe “carrot” of implementation funding can affect the planning process in unforeseen ways. DRIS sites were informed from the beginning that their project (that is, the managed care business venture) could receive an implementation grant of up to $200,000 if specified funding parameters were met. By offering a significant amount of money for implementation, the James Irvine Foundation hoped to encourage community progress and stakeholders' participation in the development of business plans and achievement of other program outcomes. However, the possibility of this funding has skewed local dialogue toward obtaining the implementation grant and away from a genuine discussion about improving the local health care system.IMPACT OF DRISAlthough the impact of DRIS will be documented and measured with health care data, some important effects on the community are difficult to document. Through DRIS, new capacity is being developed in each community, including new leadership, experience working with external entities, recognition of the importance of data, creation of a neutral forum for dialogue, and establishment of working relationships that did not exist before. When community stake-holders are asked what the most significant impact of DRIS is, they inevitably focus on this process of coming together, strengthening ties, and initiating dialogue.ConclusionsUsing a systems model characterized by an emphasis on data and broad community involvement in decision making, the DRIS Initiative has successfully created a structured framework for rural communities to develop integrated systems. Although other rural health initiatives may also be community driven, DRIS is unique in its data-based approach and its consideration of market imperatives under managed care.Funders that pursue a community-based strategy based on systems change rather than on categorical needs are likely to face issues similar to those that have arisen during the first two years of DRIS. The initiative has been labor and time intensive and has required firm direction from the Irvine Foundation and CIRHM. In addition to the aims of developing and implementing successful local administrative service entities, DRIS faces continuing long-term challenges in devolving ownership and control of the process to participating communities.ACKNOWLEDGMENTSThis report reflects the perspectives and experience of the DRIS participants. The authors thank the communityleaders and providers who generously sharedtheir time and insights about the challenges and opportunities of building rural integrated systems. They also acknowledge the valuable input andguidance provided by the DRIS Advisory Committee in the planning, implementation, and evaluation of the initiative. Committee members include Sharon Avery, California Healthcare Association; Vic Biswell, California Association of Healthcare Districts; Carmela Castellano, California Primary Care Association; Richard Figueroa, California Governor's Office; Mario Gutierrez, California Endowment; Fred Johnson, California Rural Health Policy Council; and Rita Scardaci, Plumas County Health Department.NOTE1. Ricketts T. , Slifkin R. , and Johnson-Webb K. , “Patterns of Health Maintenance Organization Service Areas in Rural Counties,” Health Care Financing Review ( Fall 1995 ): 99 – 113 ; Medline, Google Scholar Serrato C. , Brown R. , and Bergeron J. , “Why Do So Few HMOs Offer Medicare Risk Plans in Rural Areas?” Health Care Financing Review ( Fall 1995 ): 85 – 97 ; Medline, Google Scholar McDowell S. , Market Reform and Managed Care: Implications for Rural Communities ( Kansas City, Mo. : National Rural Health Association , April 1997 ); and Medline, Google Scholar Rural Managed Care: Patterns and Prospects ( Minneapolis : University of Minnesota Rural Health Research Center , April 1997 ). Medline, Google Scholar Loading Comments... Please enable JavaScript to view the comments powered by Disqus. DetailsExhibitsReferencesRelated Article MetricsCitations: Crossref 1 History Published online 1 September 1999 InformationCopyright © by Project HOPE: The People-to-People Health Foundation, Inc.ACKNOWLEDGMENTSThis report reflects the perspectives and experience of the DRIS participants. The authors thank the communityleaders and providers who generously sharedtheir time and insights about the challenges and opportunities of building rural integrated systems. They also acknowledge the valuable input andguidance provided by the DRIS Advisory Committee in the planning, implementation, and evaluation of the initiative. Committee members include Sharon Avery, California Healthcare Association; Vic Biswell, California Association of Healthcare Districts; Carmela Castellano, California Primary Care Association; Richard Figueroa, California Governor's Office; Mario Gutierrez, California Endowment; Fred Johnson, California Rural Health Policy Council; and Rita Scardaci, Plumas County Health Department.PDF downloadCited byThe Improving Efficiency of Critical Access HospitalsThe Health Care Manager, Vol. 28, No. 3
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