Dear Colleague:
As this issue of Partners vividly illustrates, health reform has begun to take root across the country. Accountable
care organizations are proliferating in both the commercial market and within the government’s two ACO programs.
New payment reforms such as the Readmissions Reduction Program and value-based purchasing are now affecting
reimbursements, creating a lot of uncertainty and anxiety in the industry.
Providers are working hard to improve the quality of care and the patient experience. New rules are coming at them
almost weekly, as pay-for-reporting and pay-for-performance programs expand into new sectors such as medical
practices and ambulatory surgery centers and older programs add new quality metrics and reporting requirements.
Our cover story is about how Virginia Mason Medical Center didn’t wait for reform to improve. It has spent the past
decade adapting the Toyota production method to health care in the most rigorous manner of any provider in the
U.S., rooting out waste and standardizing care protocols.
The special report, on ACOs, examines how three leading health systems are leading the way toward coordinated
care across the continuum. Geisinger Health Care in Pennsylvania, Atrius Health in Massachusetts and Advocate
Health Care in Illinois are profiled.
Of special interest to readers is the Back Page, which is about the complex rules surrounding the Medicare
readmissions program. We look at the methodology CMS is employing and explore our technical approach,
which helps our clients understand the complex nuances that are associated with the readmissions program
and on the broader scope of outcomes-based regulatory programs.
Underlying much of the content in this issue are data. Virginia Mason could not have changed its care protocols
without access to data on utilization and efficacy. You can’t track readmissions accurately without powerful data
tools. No ACO can even exist, let alone succeed, without a robust EMR infrastructure and data analytics.
At Press Ganey, we are working hard on expanding our capacity to provide the quality and quantity of data providers
need to succeed under reform, as well as the analytics to make sense of it and take effective action. You will be
hearing a lot more about that from us in the coming months.
Patrick Ryan
CEO
Press Ganey Partners is published by Press Ganey Associates, Inc., 404 Columbia Place, South Bend IN 46601,
800.232.8032. Quotation is permitted with attribution. Readers are permitted and encouraged to distribute copies
within their organizations. Please direct comments or suggestions to tsloane@pressganey.com. All material is
copyrighted by Press Ganey Associates, Inc.
A QuickWord

SPECIAL REPORT BACK PAGE
Contents
Training for New Battles
As part of a year-long program,
doctors at Lancaster General Health
tour the Gettysburg Battlefield to find
out how the values, leadership,
courage and organizational
behaviors of three days of battle in
1863 apply to leadership issues
being played out in today’s health
care arena.
The Devil’s in
the Methodology
Just emerging from the wide shadow
cast by the Centers for Medicare and
Medicaid Services’ Hospital Inpatient
Value-based Purchasing Program
is another payment reform with
potentially greater risk for hospitals:
CMS’ Readmissions Reduction
Program. The program targets a
key source of high health costs,
but the rules pose big problems
for hospitals.
Truly Coordinated
Care – the First Big
Challenge for ACOs
As accountable care organizations
proliferate, the challenges of
following patients throughout the
cycle of care are becoming clearer.
Also, we look at the state of play
in both the commercial and public
sector ACO markets.
Issue 25 | September/October 2012
A New Approach to
Patient-centered Care
Aurora Medical Group and Aurora
Advanced Healthcare in Wisconsin
and Illinois are finding that focusing
on the patient experience and
strengthening the relationship
between the patient, the doctor and
the patient care team make patients
stick to their practices.
22
The Lead
News and Notes on Quality Improvement
2
The Learning Lab for Health Care Transformation
Over the past decade,Virginia Mason Medical Center has achieved higher
quality and safer care while lowering costs, improving patient satisfaction,
almost eliminating staff turnover and staying competitive business-wise –
all a result of a production system adapted from automobile manufacturing.
22
Empowering Engagement at a Children’s ED
Under the banner,“One Team, One Goal: Compassionate Care for Your Child,”
the CHRISTUS Santa Rosa pediatric emergency department has a new unity
and vision.
30
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FEATURE
8 12 32
FOCUS
4
SPOTLIGHT
COVER STORY

2 Partners | September/October 2012
News and Notes on Quality Improvement
n Is There Really a
“Weekend Effect”?
The old belief that hospital quality is worse on
weekends, something many patients also are aware
of, is taking on the aura of truth, even if nobody quite
understands why it’s happening.
A Johns Hopkins study published in the Journal
of Surgical Research reviewed more than 38,000
patient records of older adults who sustained head
trauma over the weekend and found that they were
14% more likely to die from those injuries than
patients with similar injuries who were hospitalized
Monday through Friday, even after accounting for
other factors.
“The underlying mechanism responsible for this
disparity may be related to differences in weekday
versus weekend staffing,” the study concluded.
“However, this must be studied further so that
the factors driving disparities in outcomes can
be thoroughly understood and the increased risk
associated with weekend treatment for head trauma
can be eliminated.”
The study’s lead author, Eric B. Schneider, an
epidemiologist at the Johns Hopkins University School
TheLeadof Medicine’s Center for Surgical Trials and Outcomes
Research, says: “There isn’t a medical reason
for worse results on weekends. It’s more likely a
difference in how hospitals operate over the weekend
as opposed to during the week, meaning that there
may be a real opportunity for hospitals to change how
they operate and save lives.”
A separate study published in the Archives of Surgery
reviewed 31,832 patient files and found worse
outcomes for patients undergoing urgent surgery
for left-sided diverticulitis who were admitted on the
weekend versus weekdays.
“Patients undergoing urgent surgery for left-sided
diverticulitis who are admitted on a weekend have
a higher risk for undergoing a Hartmann procedure
and worse short-term outcomes compared with
patients who are admitted on a weekday,” the
study concluded. “Further research is warranted to
investigate possible underlying mechanisms and
to develop strategies for reducing this substantial
weekend effect.”
Previous studies have documented the weekend
effect for heart attack, stroke and aneurism, but none
says precisely what is driving the phenomenon.
n Readmissions
Program Expands
The Centers for Medicare and Medicaid Services
(CMS) has added 72 hospitals and health systems to
a program aimed at improving care transitions and
reducing readmissions.
The Community-based Care Transitions Program,
which was authorized by the 2010 federal health
care overhaul, funds the testing of locally developed
provider interventions aimed at improving care
transitions and reducing Medicare costs.
The total of 200 acute-care hospitals now
participating in the program are partnered with
community-based organizations to provide nearly
185,800 Medicare beneficiaries in 21 states with the
targeted services, according to CMS.
The program was launched in the spring of 2011
as part of HHS’ $1 billion Partnership for Patients
patient-safety and cost-control initiative, which the
government predicted could save 60,000 lives over
its first three years and save up to $50 billion in
Medicare costs over a decade. Nearly one in five
Medicare patients discharged from a hospital –
approximately 2.6 million seniors – is readmitted
within 30 days, at a cost of over $26 billion every
year, according to CMS.
The program pays community-based organizations
for each eligible beneficiary when they are
discharged and funds both care-transition
services and systemic changes by the hospital.
Providers accepted to the five-year program sign
two-year program agreements with CMS, and, if they
meet the program’s goals, may renew for each year
remaining in the program.
For more on readmissions see the Back Page
(page 32).

3Partners | September/October 2012
n CMS Inpatient Psych
Reporting Rule in Place
On Aug. 1, the Centers for Medicare and Medicaid
Services announced the Inpatient Psychiatric Facility
Prospective Payment System (IPFPPS) final rule
for 2013, which requires reporting for cases as of
Oct. 1, 2012. The final rule initiates the Inpatient
Psychiatric Facilities Quality Reporting Program for
freestanding psychiatric, acute-care and critical-
access hospital care facilities with psychiatric
inpatient programs that bill under IPFPPS. Fourth
quarter 2012 data and first quarter 2013 data
must be reported via QNet by Aug. 15, 2013 –
and the financial impact is 2% of a facility’s annual
payment update.
n Meet the New HCAHPS
The Centers for Medicare and Medicaid Services
(CMS) recently completed its plans for the new
version of the HCAHPS survey. Hospitals are required
to transition to the new version of HCAHPS beginning
with Jan. 1, 2013, discharges. The expanded
survey includes five additional questions. Three of
the questions will be used to create the new care
transitions domain, which will be reported on the
Hospital Compare web site as a mean score. The
care transition questions are:
n During this hospital stay, staff took my preferences
and those of my family or caregiver into account
in deciding what my health care needs would be
when I left. (Possible answers: strongly disagree,
disagree, agree, strongly agree.)
n When I left the hospital, I clearly understood
the purpose for taking each of my medications
(strongly disagree, disagree, agree, strongly
agree, or I was not given any medication when
I left the hospital).
n When I left the hospital, I had a good
understanding of the things I was responsible
for in managing my health (strongly disagree,
disagree, agree, strongly agree).
Two additional background questions will be added
to the “About You” section of the survey. CMS will
be evaluating these questions to determine if they
should be used within the patient-mix adjustment.
The results from these questions will not be
publicly reported.
The two new demographic questions are:
n During this hospital stay, were you admitted to this
hospital through the emergency room? (yes/no)
n In general, how would you rate your overall mental
or emotional health? (excellent/very good/good/
fair/poor)
Hospitals had the option to begin collecting data
using the expanded survey beginning with July 2012
discharges. For those that want to get a jump
on the competition, HCAHPS improvement
resources specific to the new transition-of-care
domain are available to Press Ganey clients from
within the Improvement Portal.
n CMS Taps CGCAHPS
As Press Ganey has been predicting, the Centers for
Medicare and Medicaid Services (CMS) has proposed
adding a patient experience measure to the Physician
Quality Reporting System (PQRS). The proposal
calls for collecting Clinician and Group CAHPS
(CGCAHPS) results beginning in 2013 for practices
that participate in the PQRS Group Practice Reporting
Option. Data collected by CMS in 2013 would be
publicly reported in 2014 on the Physician
Compare website.
CMS will not come out with a final rule until late
in 2012 at the earliest. In the meantime, practices
leveraging Press Ganey’s ongoing CGCAHPS Insights
integrated solution will be able to continue improving
the patient experience well ahead of any potential
public reporting of data.

tour of the Gettysburg Battlefield led
by a retired Army officer and Civil War
expert might seem like a stretch for a
modern physician leadership training
program, but don’t say that to one of
the doctors who has been through it.
Making a difference through communication and
collective action and understanding how unilateral
decisions made by independent-minded physicians
can work against the goals of the larger organization
are key lessons of Lancaster (Pa.) General Health’s
Physician Leadership Academy (PLA). The battlefield
tour, led by Mark Snell, PhD, a professor of history at
Shepherd University in Shepherdstown, W.Va., brings
those lessons to life and is the high point of the
year-long program.
Scheduled for midway through the program, Snell’s
battlefield metaphors explore how the values,
leadership, courage and organizational behaviors
of three days of battle in 1863 apply to leadership
issues being played out in today’s health care arena.
His tour includes a focus on “staff rides” that were
developed not long after the Civil War as a cost-
effective means of training officers to “think their way
through” tactical and operational problems by using
the terrain and historical context of an actual battle
as a forum for sharpening tactical skills, refining
intelligence interpretation and logistics planning,
and gaining insights into the combat leadership
challenges of their predecessors. Staff rides
stimulate professional development, foster a deeper
understanding of the operational art and promote
unit cohesion and camaraderie.
ABy Betty A. Marton
Training for
New Battles
TRAINING FOR NEW BATTLESFOCUS
A Physician Leadership
Program at Lancaster
General Health Explores
Teamwork and
Communication
Physicians spend the afternoon at Gettysburg absorbing
insights into the qualities that make a great leader. Here,
battlefield tour guide Mark Snell, PhD, describes the
importance of holding the high ground to physicians.
Betty A. Marton is a freelance writer
based in New Paltz, N.Y. She can be
reached at bamarton@mindspring.com.

“We use the principles from Gettysburg as a way
of showing the importance of communication and
how the kind of independent thinking that we as
physicians value so highly doesn’t necessarily
help the bigger picture,” says Lee M. Duke II, MD,
Lancaster General’s senior vice president and chief
physician executive, who came up with the idea
for the program. “The experience offers a host of
teachable moments and valuable points of reference,
as well as giving us a common bond.”
The 4-year-old program is part of a growing national
trend among hospitals and health systems to educate
physicians to understand and address the roles they
need to play in containing health care costs and
improving efficiencies. By providing them with the
knowledge, tools and confidence to become leaders
within the hospital or their group practice, the PLA
is fostering what it hopes will be a widespread and
deep-rooted cultural change away from a focus
on individual practice to one that puts the big
picture – systemwide quality improvements and cost
reductions – at its core.
“Our goal is to develop a group of physicians skilled
in the art of medicine who focus not just on their
individual cases and practices, but who can also talk
about operational issues and can apply the best of
what they do individually to the entire community,”
Duke says.
A Structured Program
Drawing on a range of resources, including those
available through the American College of Physician
Executives, Duke developed the PLA, which has
monthly 1½ hour sessions led by both internal and
external teaching faculty. Instructors use a variety
of approaches to explore such subjects as ethical
leadership, quality initiatives, negotiation, change
management, self-assessment and finance, team
building and clinical innovation.
The PLA curriculum also incorporates the
experiences of key industries outside of medicine,
turning, for example, to the Ritz Carlton for insights
into how customer service concepts apply to the
physician-patient relationship; the consulting firm
GenPac for approaches to waste and process
improvement; and various MBA professors
for discussions about the role and value of
communication and ethics.
Although Duke and Carl Manelius, director of
physician affairs, initially imagined 20 participants as
the ideal size for each class, 26 physicians signed
up for the first year and, out of the 50 or so inquiries
they receive every year, subsequent classes have
hovered around 28 to 30 participants.
“We work with everyone who is interested in applying
by exploring what they see as their current strengths
and what kinds of things they hope to bring to a
leadership position,” Manelius says, noting that to
date, eight of Lancaster General’s 10 department
chairs have completed the course. “If more than one
physician from a large practice applies at the same
time, we talk with them to make sure that the timing
and fit are right. So far, we haven’t turned anyone
away, and our attendance rates for each session are
around 90%, with a few at 100.”
In early 2011, after many years as deputy director of
residency programs at Lancaster, Christine Stabler,
MD, landed the next job she wanted: vice president
for academic affairs. Although the position was a
major step up with significant new responsibilities,
Stabler had the skills and confidence she needed
to go for it and, once installed, she felt “immensely
prepared” to meet its challenges. And she has no
doubt that her participation in the academy is at the
root of her success.
“The Physician’s Leadership Academy gave me so
many tools and brought me together with like-
minded individuals who want to see the bigger
picture when it comes to creating change within the
health care system,” Stabler says.

“The program seems to have hit a nerve,” says
Stabler, who in her new post is creating opportunities
for both undergraduate and graduate students to
learn about and apply leadership concepts and
become part of the changing culture. “Our learning
really accelerated in conversation with others, when
we were able to share our insights and process. It’s
designed to maximize and optimize the strengths of
the attendees, who build on each others’ learning
so we can take the necessary steps to transform
ourselves from passive to active participants in
creating change in our health care system.”
Christopher Hager, MD, a member of the first PLA
class, has had a longstanding interest in leadership
and has participated in other training within and
outside of Lancaster Health. As one of three senior
physician leaders of Lincoln Family Medicine, a
group practice within Lancaster Health, the skills and
knowledge he’s acquired serve in a range of ways
as he oversees and helps to manage about half a
dozen practices.
“Leadership training exposes us to the kinds of things
we don’t learn in medical school,” he says, “like
learning how to help manage others’ performances
to focusing on the customer experience. The session
with the vice president of Ritz Carlton helped me
realize that we have to treat our patients like people
who have the choice of where to spend their health
care dollars – because they do.”
Learning How to Negotiate
As a growing group of leadership-trained physicians,
Hager and Stabler appreciate the added dimension
and reach of the professional relationships with
Getting Away from the Grind
The program, which provides continuing medical
education credits, is structured so that each session
builds on the previous one, with formal presentations,
activities to engage participants in the lesson and
social time. Each session is held at a location away
from the hospital to help remove the physicians
from the pressures of their day-to-day work and is
designed not only to be engaging, but to provide the
experience of team building and foster a sense of
collegiality that is often missing from physicians’ daily
professional lives.
“Doctors’ lives are a grind,” Duke notes. “We provide
good food in a nice setting so they feel like they’re
getting away and are open to the kinds of difficult
conversations that can arise when you engage
people with different views and ways of thinking. And
you know what? It’s fun.”
The sessions are supplemented by reading
assignments from journal articles and such books
as Better by Atul Gawande, MD; Getting to Yes by
Roger Fisher, William Ury and Bruce Patton; Leading
Change, by John Kotter; the Harvard Business
Review’s On Leadership; and The Experience
Economy: Work Is Theater and Every Business a
Stage, by B. Joseph Pine II and James H. Gilmore.
There are also homework assignments that help drive
home the lessons being learned.
“These are men and women of the highest
professional accomplishment, but they’re not
necessarily prepared as leaders, able to address
the clinical as well as the policy and business side
of a hospital or large practice,” Manelius says. “Our
task is to sensitize them and help them tune into
issues of leadership as well as to help them learn the
fundamentals of business and management that will
prepare them to take on these new roles.”
Extending the Reach
For Stabler, who participated in the second PLA
class from 2008-2009, the value of the tools and
activities offered at each session of the program
was exponentially increased by sharing the
experience with her classmates, who came from
different departments, specialties, generations and
levels of experiences.
TRAINING FOR NEW BATTLESFOCUS
“We use the principles from Gettysburg
as a way of showing the importance
of communication and how the kind of
independent thinking that we as physicians
value so highly doesn’t necessarily help
the bigger picture. The experience offers a
host of teachable moments and valuable
points of reference, as well as
giving us a common bond.”
Lee M. Duke II, MD
Senior Vice President and Chief Physician Executive
Lancaster General Health

who can simultaneously continue to provide care
while applying financial disciplines. I’ve heard
from several CEOs that because so much is in flux,
there’s no better time to be in health care and make
a difference.”
Battle-tested Lessons
The Gettysburg tour is an apt analogy, for leaders
and for those in the trenches. “Like health care
organizations, the Army is a large organization
with leaders, staff, subordinates and a mission
to accomplish,” Snell says. “We look at how
decisions were made by generals; how personalities
influence outcomes; the upward and downward
flow of communication; and how such resources as
personnel, equipment, supplies and financing shape
the mission of an organization.”
Physicians spend the afternoon at the Gettysburg tour
absorbing insights into the qualities that make a great
leader – the ability to communicate well, the moral
courage to make tough decisions and the ability to
make sure resources are available when they’re
needed. And he tries to drive home the medical
aspects of the battle, which caused 51,000 deaths
and left tens of thousands of soldiers wounded. Snell
also relates the story of how the death of Confederate
Gen. Stonewall Jackson forced Gen. Robert E. Lee
to reorganize his troops less than one month before
the battle, creating the same types of problems that
would affect any large organization today.
The bonds formed among the physicians who
participate in the PLA increases each year as more
and more of them are able to build on shared
experiences and common points of reference that are
laying the ground for system-wide efficiencies and
cost containments to take root.
“When physicians come out of their silos and talk
to other physicians to solve problems and speak
collectively, that’s what creates the shift,” Snell says.
“That’s the platinum standard, and that’s where
we’re headed.”
colleagues who share these similar interests and
experience. This broader sense of community makes
it easier to know who to call if they have a clinical
or practice question and, Hager points out, the
training also helped sharpen his ability to negotiate,
something he thinks most physicians dislike.
“Pretty much everything we do involves negotiating,”
he says, “whether it’s with another physician who’s
not compliant with a policy, with an insurance
company over a contracted rate, about hours and
scheduling with a colleague or with a patient about a
treatment plan.”
“It’s also helped me to think outside the box when
it comes to marketing. What is the competitive
advantage I offer patients over other physicians?”
he adds. “This is something I try to drive home in
my practice every day, because the bottom line is
that it’s the right thing to do. It’s why we went to
medical school.”
The need for a new approach to both clinical and
practice issues to extend beyond the ranks of top
hospital and health care executives is becoming
increasingly apparent as evidenced by the growth of
membership in the American College of Physician
Executives (ACPE). Founded in 1975 to provide
leadership and management skills to physicians
and encourage them to assume more active roles
in their organizations, the ACPE has grown from 64
to more than 10,000 members, as more and more
physicians, nurses and health care organizations
understand that everyone needs to play an active role
in response to declining reimbursements and rising
costs – issues that aren’t going away any time soon,
according to Gregory Shea, adjunct professor of
management and adjust senior fellow at the Leonard
Davis Institute of Health Economics at the Wharton
School, University of Pennsylvania.
“The pressure to reduce costs and increase quality is
clearly growing, and there’s no indication that it won’t
continue to grow for a long time,” Shea says. “There
have always been physicians in senior leadership
positions, but now we have to reach those in the
trenches – clinicians who understand the strategic
imperative, the national and local imperatives and

hat an awkward exchange!” I
thought as I sat in the waiting
room of a southeastern
Wisconsin medical clinic,
anonymously observing patient-
staff interactions. A staff member for an internal
medicine practice had just opened the door to the
waiting room, called her elderly female patient by
first name, and then waited… and waited…
and waited.
In the meantime, the elderly patient gripped her
walker and struggled to gain the leverage to pull
herself to her feet. As the patient worked to stand
for roughly 15 seconds – seconds that seemed
more like minutes – the staff member just stood
in the doorway, all with a smile on her face, only
10 feet away.
A NEW APPROACH TO PATIENT-CENTERED CAREFEATURE
A New Approach
to Patient-centered Care
Unfortunately, this is an all-too-common scene in
practices and clinics across the country. A nurse
or medical assistant opens the door to the waiting
room, calls a patient’s first or last name, and then
stands in the comfort of that doorway until the
patient has gathered his or her belongings and
approached the staff member. If the staff member
is focused on the patient, then she might greet that
patient with a smile and some small talk. However,
it’s equally as common to see the nurse or assistant
turn and begin walking to the exam room without a
proper greeting.
In an age when more organizations explicitly focus on
patient-centered care, a more personal, intimate way
of acknowledging and interacting with the customer
ought to be standard practice.
“
W
By Daniel Bent, MBA, Manager,
Improvement Services, Press Ganey Associates

“Second chances
to provide an
excellent experience
are getting harder
to come by; in a
world of increasing
transparency and
interconnectedness –
where a person
can share a story
with hundreds of
people in a click of
a button – our ability
to build trusting
relationships and a
solid reputation for
personalized care
is going to be the
difference.”
For example, rather than call the patient’s name
from the back office doorway for everyone to hear,
what if the nurse or assistant left that doorway,
approached the patient where she sat, and personally
invited her back to the exam room? What would that
communicate to that patient in terms of sensitivity
to her unique needs, both physical and emotional?
Would it convey a more genuine respect for
her privacy?
Several of the medical practices within Aurora
Medical Group and Aurora Advanced Healthcare
utilize this more personalized approach to patient
interactions and have learned the answers to these
questions. What they have seen is a significant
positive impact on the patient experience. The
practices are part of Aurora Health Care, an
integrated, not-for-profit health care system serving
communities throughout eastern Wisconsin and
northern Illinois.
“Our key purpose is to help people live well. To
accomplish this, we’re finding ways to individualize
and personalize the patient interaction,” says
Brad Kruger, senior director of clinical operations
for Aurora Advanced Healthcare. “In addition, almost
every health care organization in our market uses
Epic as its electronic medical record vendor. With
Epic’s ‘Care Everywhere’ solution, the switching costs
for a patient in southeastern Wisconsin are minimal.
The best way to make a patient ‘stick’ to your
practice is by focusing on the patient experience and
strengthening the relationship between the patient,
the doctor, and the patient care team. Second
chances to provide an excellent experience are
getting harder to come by; in a world of increasing
transparency and interconnectedness –
where a person can share a story with hundreds
of people in a click of a button – our ability to build
trusting relationships and a solid reputation for
personalized care is going to be the difference.”
When Lori Hundertmark, clinic operations manager
for Aurora Advanced Healthcare, first attempted to
change the standard staff-patient interaction at her
Hartford clinic, she faced patient satisfaction scores
in need of improvement. The clinic ranked near or
below the 50th percentile nationally on questions
such as, “concern for patient privacy” (46th),
“sensitivity to patient needs” (43rd), “cheerfulness of
the practice” (39th), and “friendliness and courtesy of
the nurse/assistant” (56th). The clinic’s loyalty metric,
“likelihood of recommending the practice,” ranked at
the 29th percentile. The challenge seemed daunting.
“We needed to take a big site and make it small,”
Hundertmark says. “So, we tackled improvement
by department rather than the clinic as a whole.
We looked at each department, or ‘pod,’ and tried
to make it feel like home to the patient. We also
started with our strongest-performing pods and tried
to enhance what each already was doing well. That
allowed for some quick wins before we attempted to
improve the other departments.”
Hundertmark’s approach was to personalize the
patient interaction as much as possible, including
the nurse call-back process. In order to rapidly
effect change among her staff, she divided her
improvement efforts into three key parts:
n Communication of Aurora’s service
commitments to staff
n Rollout of new standards and staff training
n Rounding on staff and coaching to ensure
consistent use of the service commitments
Communication of Service Commitments
Hundertmark clearly outlined for employees the
service commitments Aurora expected of them.
Caregivers no longer were permitted to call out
patient names in the waiting room. Instead, the
front desk staff communicated with the nursing
caregivers to assist with identifying patients, and
then the caregiver would enter the waiting area and
invite each patient to the exam room. Eye contact
and smiles were a necessity. Staff members also
were expected to take ownership of the waiting area
so that messes were cleaned up, patient issues
were addressed before they became problems and
patients were kept better informed of delays in the
office schedule.
Brad Kruger
Senior Director of Clinical Operations,
Aurora Advanced Healthcare

Leadership Rounding and Coaching
Once staff initially had been trained on the service
commitments, Hundertmark held the team
accountable through leader rounding. Not only
would she regularly walk through the waiting area
to check on patients and the general appearance
of the room, but she also took time to observe
staff-patient interactions. If she witnessed behavior
outside of Aurora’s service standards, she discussed
it with the employee at that moment. “I wanted to
address their behavior when it occurred so that they
could feel what they did and put it in context,” says
Hundertmark. “Staff also needed to exercise more
personal awareness. For example, if an assistant
called ‘Bill’ and there were only women in the chairs,
she would have looked foolish. Not only would she
have done something unacceptable in our clinic, but
she also would have interrupted all of the patients for
no good reason.”
Hundertmark emphasized that the department
supervisors play an important role in the coaching
process. “If I observe a staff member not smiling,
I’ll ask her if she’s not feeling well or if something
is wrong. I’ll then share my conversation with the
supervisor and give her ownership to follow up with
the caregiver. If the supervisor has had that crucial
conversation with the caregiver and the behavior
doesn’t improve, then I’ll get involved and have a
conversation. If a positive change isn’t noted, then
the supervisor works closely with the caregiver to
assure the patient experience is not affected. It’s
key for us to have the right people in the right job.
Doing your job well, but doing it without kindness or
compassion, doesn’t benefit our patients.”
A patient service representative states: “The changes
that we made provide the patient far better care and
treatment. We have been made more aware of how
we treat the patients to make a better experience
for each one of them. We didn’t know we were
doing things the way we were; someone needed to
make us aware of how we are perceived. Now we
are attentive to, and are held responsible for, the
personal care we provide.”
However, as Hundertmark contemplated how best to
communicate the service commitments to staff, she
quickly realized that she first needed to change her
own personal habits.
“Just like my staff, I found myself standing in the
doorway when I called patients back to the exam
room. I thought, ‘This is silly. The door isn’t going
anywhere. Why am I so attached to this door knob?’
So, I needed to retrain myself to go into the waiting
room and interact with the patients to set the
example for the caregivers.”
Hundertmark also changed her habit of taking
back hallways to navigate her office building and,
instead, walked directly through the waiting areas for
each pod. This provided her greater visibility to her
patients, a better awareness of the condition of the
waiting room, and more opportunities to observe and
interact with her staff.
Rollout and Training
In order to effectively introduce the new standards
and train her staff, Hundertmark scheduled three
half-hour, town-hall-style staff meetings per month
over the lunch hour to personally demonstrate
the habits she expected. She encouraged staff
members to ask questions and participate in the
demonstrations so that they felt more comfortable
with what was being asked of them. The department
supervisors also attended the meetings so that
Hundertmark had those closest to the caregivers in
the room with her to address questions to which she
might not have the answers.
This training continues to be a monthly occurrence.
It now has a more formal agenda during which
Hundertmark reviews safety issues, the patient
experience, the clinic’s CGCAHPS scores, and a
dozen other items important to the performance of
the clinic and the work of the caregivers.
A NEW APPROACH TO PATIENT-CENTERED CAREFEATURE

Hundertmark also benefited from the support
of key physician leaders. David Chen, MD, and
Bryan Jewett, MD, engaged their peers and provided
support through physician rounding and coaching.
They also ensured caregivers’ voices were heard
during the change process. As a result, the clinic
quickly addressed and resolved issues and
prevented future problems.
The Results
Once implemented, Hundertmark and Kruger began
to see slow but immediate changes in the patient
satisfaction scores for the clinic. One year after
implementing the service commitments, consistently
rounding on staff and coaching for success, patient
loyalty scores for “likelihood of recommending
the practice” jumped from the 28th to the 73rd
percentile. In addition, “concern for patient privacy”
moved from the 48th to the 75th percentile,
“sensitivity to patient needs” improved from the 43rd
to the 83rd percentile and “friendliness and courtesy
of the nurse/assistant” increased from the 56th to
88th percentile.
The Hartford clinic also has seen a 12% increase
in patient volume, and is on pace to record 65,000
visits this year. “The interesting thing about that
number is that Hartford serves an overall stable
population,” says Kruger. “We didn’t see an increase
in volume because new patients were suddenly
moving to the area. So, we believe this validates
the changes we’ve made and the care we’re
providing are making a positive difference in the
lives of our patients. They’re staying with us for
their care, and telling their friends and family about
their experiences.”
The Hartford clinic is now the seventh-largest clinic
by volume within the Aurora system. While the speed
of improvement has been impressive, the success of
the clinic is amplified by the number of patients with
whom staff interacts.
Carrie Nash, LPN, a nurse in internal medicine, notes,
“After implementing all the little daily improvements,
they have added up to both a better patient
experience and clinic atmosphere. It seems patients
and employees are happier.”
“When I first arrived, it felt like caregivers could make
a difference and wanted to make improvements,”
adds Hundertmark. “Now, during our town hall
meetings, we continually acknowledge and say a big
‘thank you’ to each caregiver at our site. Together,
everyone from each department of the site has
adjusted to change and has come to realize the
“It’s key for us to
have the right
people in the right
job. Doing your job
well, but doing it
without kindness or
compassion, doesn’t
benefit our patients.”
Lori Hundertmark
Clinic Operations Manager,
importance of the patient experience as a part of
every encounter. It’s so heart-warming to witness the
dynamic changes taking place and see people truly
enjoying their jobs.”
The effects of this more-personalized approach
to patient care also positively affected Aurora’s
CGCAHPS results. The Hartford clinic’s patients rate
their care above the 75th percentile for the “overall
doctor rating” and three of the four domains on the
survey. Impressively, “office staff quality” currently
ranks at the 84th percentile.
As the Centers for Medicare and Medicaid Services
moves to a value-based purchasing model for group
practices and clinics, Aurora’s strategy not only will
differentiate it in the marketplace, but also maximize
future reimbursement. This is a concern not lost
on other physician groups across the country. I’m
continually hearing of more and more practices
adopting a personalized approach to staff-patient
interactions in preparation for an environment where
the patient experience affects reimbursement. Will
yours be the next?

n 14 years as a hospital nurse, AdvocateCare’s
Lori Schoeling has cared for patients at their
very worst. But only in the past 16 months
as an embedded outpatient care manager
has she been able to change patients’ lives for the
better. Working within the framework of Advocate
Health Care, a Chicago-area integrated delivery
system, she offers services at no charge to select
patients. Her work is to help them tackle bigger
logistical, transportation, financial, education and
support issues that wind up exacerbating their
existing medical problems. She is part educator, part
counselor and part pushy aunt.
For an elderly dementia patient prone to falling,
Schoeling has hired home health care workers,
recruited occupational therapists to assess the
home and secured free respite care for the patient’s
80-year-old husband. For a chronic back pain
sufferer, known as a “problem patient” who peppered
her doctor with phone calls, Schoeling became a
sounding board and first point of contact. She then
coordinated primary and specialty visits and secured
surgical and recovery care.
I
Truly Coordinated
Care – the First Big
Challenge for ACOs
By Rachel Brand
TRULY COORDINATED CARE – THE FIRST BIG CHALLENGE FOR ACOsSPECIAL REPORT
Rachel Brand is a freelance writer
based in Denver. She can be reached
at rachel_brand@comcast.net.
Geisinger Health Plan places nursing professionals
in physicians’ offices as members of the primary
care team. As part of this innovative program, case
manager Michelle Michael, RN, counsels a patient
regarding his medications.

“Everything I do is for the patients,” Schoeling says.
“I try to put myself in their place and treat them as
I would my own family. (The back pain patient) was
in pain, so she was not very good at communicating,
so I helped her get appointments sooner and
probably averted an emergency room visit. It’s the
personal touch.”
Schoeling is among a growing tribe of outpatient
care managers charged with coordinating the care
of very ill patients. How well they can reach out
to such patients; build trust with them; and keep
them healthy, on their medications and out of the
emergency room may determine the fate of the U.S.
health care system. That’s because 3% to 5% of all
patients consume 30% of medical dollars. If health
care systems can better manage these patients,
everyone wins.
Right now, coordinated care for patients with multiple
chronic conditions remains a lofty goal. The current
fragmented health care system tacitly encourages
such patients to ping pong from doctor’s office to
emergency room, hospital to nursing home. When
providers discharge patients or wave goodbye to
them in the hospital or physician office parking lot,
they typically see their job as done. As a result, tests
are duplicated. Instructions are forgotten. Handoffs
are incomplete.
The Challenge and Opportunity of
Coordinated Care
Some 40 million Americans live with a chronic health
condition that limits their daily activities, according
to the Institute for Health and Aging at University of
California, San Francisco. A chronically ill person
might be an overweight professional man with
hypertension who is at risk for heart disease or a
child who is developmentally or physically challenged
and needs special care and interventions.
Chronic illness doesn’t end someone’s life, but
patients live longer when connected to a network
of friends, family, clinicians and community
organizations for support. What’s more, if they
do become acutely ill, evidence suggests that a
coordinated approach to delivering care to these
patients pays substantial dividends in health
care quality and efficiency. Yet coordinating care
for patients with chronic diseases is complex
and involves numerous providers and effective
communication processes.
More than a decade ago, the Institute of Medicine’s
Crossing the Quality Chasm report highlighted the
care coordination failings in the U.S. health system,
stating: “The delivery of care often is overly complex
and uncoordinated, requiring steps and patient
‘handoffs’ that slow down care and decrease, rather
than improve safety. These cumbersome processes
waste resources; leave unaccountable voids in
coverage; lead to loss of information; and fail to build
on the strengths of all health professionals to ensure
that care is appropriate, timely and safe.”
“We try to interrupt bad things from
happening, Our goal is to pull all the pieces
together across the continuum. We’re not
waiting for a crisis, but trying to assess who
might be at risk for a crisis, to prevent it and
to make sure they understand everything
they need to do if it happens.”
Sharon Rudnick
Vice President Outpatient Enterprise Care Management
Advocate Health Care
The Affordable Care Act tries to solve the problem.
Medicare will soon penalize hospitals with higher-
than-expected readmission rates, an effort to spur
post-acute care coordination (see story, page 32).
Medicare has contracted with 154 accountable care
organizations (ACOs), a form of integrated provider
network. Not only do ACO contracts require that
providers hit quality benchmarks in order to receive
savings payments, but also, by improving quality,
providers stand to lower costs and more easily
reach savings goals. Commercial payers are also
pursuing ACO-like relationships. It’s early in the
game, but a review of the work at three major health
systems – AdvocateCare, Geisinger Health Plan and
Atrius Health – shows promising results on better
coordinating the care of patient populations.

AdvocateCare: Interrupting Bad Outcomes
Oak Brook, Ill.-based Advocate Health Care is
a sprawling integrated delivery system with 12
acute-care hospitals, 250 sites of care and an
affiliated network of some 4,000 physicians. In
January 2011, understanding the need to clinically
integrate, AdvocateCare became the nation’s largest
ACO. It signed a shared savings, performance-based
contract with Blue Cross and Blue Shield of Illinois for
its 380,000 HMO and PPO enrollees. The goal was to
reduce costs not against Advocate’s historical patient
medical costs, but against a benchmark rate of all
Blue Cross providers, while improving quality.
The 60 enterprise outpatient care managers such as
Schoeling are central to achieving this goal. Trained
as nurses, licensed nurse practitioners or social
workers, each care manager is responsible for 110
to 150 patients, drawn from the 2.4% of the Illinois
Blues’ commercial population predicted to incur
27% of medical expenses. Patients are flagged in
the computer system via a retrospective review of
Blues claims data, which has been run through a
predictive modeling system. Although such patients
have no primary diagnosis, they could have diabetes,
chronic obstructive pulmonary disorder, heart failure,
dementia, hypertension, chronic pain, asthma,
multiple sclerosis or even cancer.
These patients “really, really need help,” says
Sharon Rudnick, vice president, outpatient enterprise
care management at AdvocateCare. “They might be
overweight; their blood work is not on target. They
really need to modify their behavior in addition to
receiving clinical care.”
Care managers follow no boilerplate approach, but
their primary charge is to engage patients and build
trust with them.
“What surprises me most is I actually have patients
who refuse our services,” Schoeling says. “They think
we work with the insurance company or we’re trying
to sway them. They don’t believe it’s a free service;
they think there’s another agenda.”
Once the initial hurdle of distrust is overcome, care
managers work wonders. Introduced to patients as
an extension of the physician, care managers serve
as the first point of contact when a high-risk patient
gets sick or simply has a question. Care managers
are also quick to refer patients to outside help – to
transportation and to home care, as well as making
sure their electricity stays on. When a patient hits the
emergency room, software alerts the care managers,
who then follow up with patients to ensure they
set up appointments with their doctors. They work
with licensed social workers who have a Rolodex of
community health care resources at their fingertips.
Finally, trained in motivational interviewing skills, care
managers home in on the real reasons why patients
struggle to look after themselves.
“We all know we need to exercise, shouldn’t
smoke, should eat healthy,” Rudnick says. “So
how do you tease out what really are their barriers
to self-engagement?”
Overall, patients welcome the extra attention.
AdvocateCare’s patient engagement rate is over
85%, compared to 40% to 65% for disease
management programs hosted by health plans.
For the first six months of 2011, AdvocateCare’s
hospital admissions per member fell 10.6%
compared with 2010 results, and emergency room
visits were down 5.4%.
“We try to interrupt bad things from happening,”
Rudnick says. “Our goal is to pull all the pieces
together across the continuum. We’re not waiting
for a crisis, but trying to assess who might be at
risk for a crisis, to prevent it and to make sure they
understand everything they need to do if it happens.”

Reducing Hospital Readmissions
Just as Schoeling keeps patients out of emergency
rooms and hospitals, her peers work to help patients
heal once they go inpatient. AdvocateCare offers
several experimental programs to boost post-acute
care quality and curb 30-day readmissions.
“On the inpatient side, we’re looking at the acute-
post acute transition and how to better evaluate
what patients’ needs are,” says Lee Sacks, MD, chief
medical officer for AdvocateCare. “If they are going
to the nursing home, what are the key information
pieces needed so that the handoff is done correctly?”
One pilot program aims at patients who don’t qualify
for home care but, based on a readmission risk
predictive model, need extra support. Within two days
of arriving home, the patient gets a visit from a nurse
transition coach. The nurse reviews the patient’s
understanding of discharge instructions, sets up a
follow-up appointment with a primary care physician
and reconciles medications. The nurse observes
the patient for symptoms that indicate the need
for further clinical care and coaches the patient on
self-management.
“(The nurse says), ‘Let’s go through your
medications, let’s take them out of your cabinet and
reconcile them. Let’s talk about your disease. Let’s
talk about weighing yourself and how you’re going to
call your doctor if you’ve gained five pounds,’ ”
says Becky Trella, vice president of AdvocateCare’s
Post Acute Network.
From August to October 2011, the program
reduced readmission rates by 26%. The 174
transition coach patients had an expected
readmission rate of 12.67% but an actual
readmission rate of 8.62%. Since the program
provided a positive return on investment,
AdvocateCare will expand it to other hospitals.
“On the inpatient
side, we’re looking
at the acute-post
acute transition
and how to better
evaluate what
patients’ needs are.
If they are going to
the nursing home,
what are the key
information pieces
needed so that
the handoff is
done correctly?”
Lee Sacks, MD
Chief Medical Officer,
AdvocateCare has also hired inpatient care managers
who target patients at risk of readmission. For certain
patients, the inpatient care manager develops a
discharge plan and works closely with physicians and
home care to ensure patients have the proper home
medical equipment and community support to heal.
Finally, AdvocateCare places advance practice nurses
(APNs) within unaffiliated, community nursing homes
to oversee high-risk discharged patients.
To understand the program’s significance, consider
the “old” way, Trella says. Typically, a patient would
arrive at a skilled nursing facility and see a doctor
within three days, per Illinois state law. Visits would
then slow to once a week. “The doctors are hard-
pressed to be there often,” Trella says, “or the patient
is assigned a physician on staff at the nursing home,
and the handoffs are less than stellar.” Patients,
unprepared, wonder where their doctor has gone.
Nobody monitors the patients or notices if their
health worsens.
By contrast, APNs see patients two to three times
a week and stay on-site. Each nurse manages 20
to 25 patients. “They are much more up on what is
going on with the patient,” Trella says. The nurse,
for example, would check a congestive heart failure
patient’s vitals, rehabilitation and level of heart
failure. “They are constantly adjusting the plan of
care and preventing readmissions, just because
of that.”
The program is expensive, she acknowledges, but
has lowered skilled nursing facility lengths of stay
to 20 days versus the Illinois average of 27.5 days.
Further, hospital readmission rates fell to 13.6% in
2011 from 22% in 2010.
“The skilled nursing facilities love having the APNs on
site,” Trella says. “Patients feel so comforted by the
APN’s presence; I’ve never had a patient complain.
The nurses say how wonderful it is to have the APN
around; other patients are asking for them.”

Care Coordination at Atrius Health
Atrius Health is an independent alliance of six
ambulatory medical groups based in eastern and
central Massachusetts. The six medical groups
include about 50 practice sites, with 1,000
employed physicians, 1,450 other health care
professionals and staff caring for 1 million adults
and pediatric patients.
Blue Cross and Blue Shield of Massachusetts
invited Atrius Health to join its Alternative Quality
Contract (ACQ) in 2009. The ACQ, which initially
involved 100,000 Atrius Health patients, aimed
to reduce medical spending growth while holding
providers accountable and providing financial
incentives for performance on 60 indicators of
quality, safety and outcomes.
Due to a long history with managed care contracting,
“it’s in our DNA that we are responsible for managing
more than just the patient in front of us,” says
Rick Lopez, MD, chief physician executive of
Atrius Health. “We already had systems for sharing
financial risk and tracking patients, and the AQC
allowed us to get focused around a very specific
quality framework. At the same time, we were on a
mission to bring down our cost structure.”
Care coordination was central to this effort. “We
sat down with local hospitals and we’d ask, ‘When
patients are discharged, what kind of care will they
have? When they are in the hospital, what kind of
testing and specialty care should be arranged? How
should you communicate with us?’” Lopez says.
“One quickly gets a sense of whether the hospital
wants to collaborate or simply be a vendor.”
For those hospitals that have become preferred
Atrius Health partners, the teams have worked on
collaborative process improvement projects.
Information technology was another key area for
collaboration with hospitals. Recognizing that
achieving a reduction in readmissions and successful
patient transfers from one setting to another is reliant
upon all of the parties having the right information
at the right time, Atrius Health worked with
Beth Israel Deaconess Medical Center and Epic
Systems to set up a web portal that lets clinicians
at Atrius Health and Beth Israel access each other’s
medical record with a single click from within a
patient’s record.
This ability to exchange data in real time when
needed to support patient care was so successful
that it was subsequently rolled out to half a dozen
other hospital partners and was “widely and favorably
received by the practice,” says Lopez.
As a measure of the potential outcomes that can
be achieved through initiatives like those that it
has implemented, Atrius Health showed significant
improvement on the clinical quality measures,
including several dozen clinical process and
outcomes measures.
“The skilled nursing facilities love having the
APNs on site. Patients feel so comforted
by the APN’s presence; I’ve never had
a patient complain. The nurses say how
wonderful it is to have the APN around;
other patients are asking for them.”
Becky Trella
Vice President of Post Acute Network
Advocate Health Care
other patients are asking for them.”other patients are asking for them.”
Geisinger Gets It Right
Pennsylvania’s Geisinger Health System has been
a leader in delivery system innovation. Geisinger
operates four acute-care hospitals, one inpatient drug
and rehabilitation center, two ambulatory surgery
centers, and 55 primary care and specialty
ambulatory care sites.
Seeing cracks in the fee-for-service delivery model,
in 2004 system leaders, including Thomas Graf,
MD, the chairman of Geisinger’s community practice
service line, began a primary care process redesign.
In 2006, through a partnership between Geisinger
Clinic and Geisinger Health Plan, Geisinger
launched Proven Health Navigator (PHN), its own
ACO-like system.

PHN is built on five pillars: physician-directed, team-
delivered care; integrated population management;
medical neighborhoods; quality outcomes; and
compensation. PHN started at three clinics and has
added a dozen care sites yearly.
“Our philosophy was to shift from the patient alone
trying to navigate the health system to the medical
team working together to manage through this
confusing system,” Graf says.
If one were to design the ideal medical office, with
each person doing exactly what they are trained
in, nothing more or less – it might look like PHN’s
clinics. Physicians concentrate on “physician
work” – making complex medical decisions and
forming relationships with patients. Nurses take
care of process measures. Nurse and patient care
coordinators respond to patient needs. The electronic
health record is leveraged as a member of the team,
handling scheduling and prompting physicians to
make routine medical decisions.
Doctors get to spend time doing the “puzzles,”
Graf explains. “The time they spend with the patient
is much more meaningful, and absolutely they like
it. When you walk into a site that truly gets it, you
can feel the difference. The sites have moved from
reactionary controlled chaos to predictive care, to the
feeling that we can know what is happening and are
in control.”
By leveraging the health plan’s vast clinical data
stores, analysts parse patients into clinically
meaningful segments: healthy patients who want to
stay that way, those with a mild chronic disease who
wish to stabilize and multi-morbid patients whose
lives are balanced on the head of a needle.
Each group receives a specific bundle of preventive
care and followup. As in many organizations, patients
with chronic conditions receive regular followup
and support with transitions to specialists or to
ancillary care settings. But those patients identified
as most at-risk (who are about 15% to 20% of the
Medicare population and 5% of the commercial
population) receive special attention from a unique
team member. High-risk case managers – so-called
“commando nurses” funded by Geisinger Health
Plan – don’t do disease management but instead
focus on the driving issue in the case, using
technology-enabled, high-touch programs to
closely follow this fragile population and manage
emerging exacerbations.
PHN works closely with its medical neighborhood –
the people and places that care for patients’ needs
outside the system. While the health plan may have
contractual relationships with providers, PHN works
more informally, relying on the power of referrals
to demand clinical excellence. PHN communicates
expectations for access and quality to local nursing
homes and home health agencies. If the agency can
perform up to these standards, PHN refers patients.
Similar to AdvocateCare, PHN works beyond the
system’s walls to reach nursing homes. To reduce the
number of patients who are readmitted from nursing
homes (a staggering one-third), Geisinger places its
own advanced practice nurses within select long-
term care and rehabilitation facilities. The nurses
perform medication reconciliation, train staff on
how to care for and reduce falls, and identify acute
exacerbations before they worsen. Early results look
promising: Hospital readmission rates plummeted a
minimum 13% at the low end and as much as 67%
at one nursing home. “It really changed the way we
provide care in the nursing home,” Graf says.
In overall numbers, hospital admissions and
readmissions for PHN Medicare patients have
dropped about 20% versus non-PHN sites, and
emergency room visits have leveled, while shooting
up at non-PHN sites.
But perhaps most importantly, patients and providers
believe that these changes have improved the way
that patient care is delivered. Just six months after
PHN launched, 72% of patients surveyed agreed with
the statement, “quality of care is different and better
than in the past.” And 86% of providers agreed that
care was more comprehensive than in the past, while
a whopping 93% would recommend PHN to other
primary care providers.

The movement toward managing
population health across the continuum of
care – more popularly referred to by the
acronym ACO – is gathering steam by the
day and may soon reach a critical mass – no longer
just an experiment, but a key component of the U.S.
health care system.
While the sheer number of accountable care
organizations is still low, “it’s a small but very
influential part of the market, says Paul Ginsburg,
president of the Center for Studying Health System
Change. “Everybody is watching it.”
Almost every day a group of physicians and other
providers inks a contract with an insurer to become
a commercial ACO, and a Medicare pilot of the
concept – still in its infancy – is already bursting at
the seams with 154 participants.
This phenomenal growth – beyond earlier estimates
of the early potential of ACOs – comes as the
evidence of their ability to deliver results is still
debatable. It’s too early to say whether ACOs in the
Medicare demonstration will save money or improve
quality, though a few commercial ACOs show early
signs of success.
In California, the nation’s most advanced ACO
market, ACOs have formed not just for traditional
or Medicare patient populations, but also to serve
alternative patient groups. There’s talk of California
ACOs competing against traditional insurers on the
state’s health insurance exchange, and in the Golden
State, physician integration, merger and partnering
activity have reached a frenzied pace.
T
The ACO
is Ascendant
THE ACO IS ASCENDANTSPECIAL REPORT
Shared Savings Program
and Interest from Private
Payers Drives Fast Growth
of New Provider Model
By Rachel Brand
Rachel Brand is a freelance writer
based in Denver. She can be reached
at rachel_brand@comcast.net.
Paul Ginsburg, president of the Center for Studying
Health System Change, says that in the future, ACOs
may not be voluntary.

“The name of the game here is going to be integration
and partnerships,” says Maribeth Shannon, director,
market and policy monitor program, California
Healthcare Foundation. “It’s going to be hard for
anybody to go it alone.”
The available evidence is enough to ask the question:
What can we learn from ACOs so far?
The Basics
Accountable care organizations are a key provision
of the Affordable Care Act, aimed at slowing rising
health care costs while delivering high-quality care
under Medicare. Their core identity may be as a
medical group, independent practice association,
hospital or physician-hospital organization, but
regardless, their payer contracts incentivize them to
meet quality targets while holding down costs.
The ACO concept has gained popularity as a
solution to the current fragmented, duplicative and
costly health care system. In recent months, it has
mushroomed in response to a requirement in the
Affordable Care Act that directs Medicare in 2012 to
begin experimental contracts with ACOs. In the long
term, Medicare payments are likely to decline, putting
pressure on providers to change how they organize
and deliver care.
Perhaps for the first time, “payers and hospitals and
possibly some doctors seem to have a consistent
vision about where they would like to see the delivery
of care go – to a more coordinated system, with a
larger role for primary care physicians and more
management of chronic disease,” Ginsburg says.
In the first seven months of this year, 154 ACOs won
Medicare contracts and the number of beneficiaries
slated for ACO enrollment, 2.4 million, topped CMS’
three-year projection of 2 million.
Medicare ACOs include the Pioneer ACO Model –
a CMS Innovation Center initiative designed to
support organizations with experience in providing
coordinated care to Medicare beneficiaries at a lower
cost – and the Medicare Shared Savings Program
model, which provides incentives for ACOs that meet
standards for quality performance and reduced
cost while putting patients first. In addition, the
Innovation Center is testing the Advance Payment
ACO Model, which provides additional support to
physician-owned and rural providers participating in
the Shared Savings Program who would benefit from
additional start-up resources to build the necessary
infrastructure, such as new staff or information
technology systems.
Medicare ACOs Increasingly Physician-driven
As Medicare has issued ACO contracts, physicians
have increasingly sought to win them.
“The initial Pioneer ACOs tended to be larger groups
with a lot of capital to invest in technology,” says
Kirk Clove, president of Rye Brook, N.Y.-based
Collaborative Health Systems, a division of the
for-profit, publicly traded insurer Universal American.
CHS is partnering with 10 ACOs, and providing
information technology and data analytics necessary
for ACO success. Now, Clove says he’s seeing
groups from all over the country; from high-cost and
low-cost areas, from urban and rural areas. “The
predominant makeup is physician organizations, and
secondarily, PHOs (physician-hospital organizations).”
Two-thirds of Pioneer ACOs feature hospitals in
a starring role, as heads of integrated delivery
systems such as Pennsylvania’s Geisinger Health
System and Minnesota’s Park Nicolett Health
Services and hubs of physician-hospital partnerships
such as California’s Monarch HealthCare. The
remaining 10 Pioneer ACOs are Independent Practice
Associations such as Massachusetts’ Atrius Health
and San Francisco’s Brown & Toland Physicians.
They were selected because they had a history
of sharing risk and coordinating care, and had
to commit to having the majority of their annual
revenues by the end of 2013 coming from
ACO DISTRIBUTION BY STATE
Source: Leavitt Partners
n 20+
n 10-19
n 7-9
n 4-6
n 2-3
n 1
n 0
NUMBER OF ACOs

THE ACO IS ASCENDANTSPECIAL REPORT
“outcomes-based” contracts that involve shared
savings or financial risk. By 2014, in their Medicare
contract, Pioneers will be required to take on more
risk, with the potential for more reward.
By contrast, of the 89 Medicare Shared Savings
Program ACOs announced in July, nearly half are
physician-led organizations with fewer than 10,000
beneficiaries, and one out of four are groups of fewer
than 100 doctors that do not include a hospital in the
mix. (CMS requires that providers have a minimum
of 5,000 Medicare patients, which equates to a
minimum of 25 physicians in the group). Typical of
this wave of ACO participants are groups such as
Coastal Carolina Health Care, a North Carolina-based,
physician-owned and operated medical practice with
over 50 providers and no hospital partner.
According to CHS, a significant number of these
smaller, newer groups are partnering with health
plans (such as CHS) or management service
organizations to provide information technology,
informatics and analytics. Also: 20 Medicare Shared
Savings Program ACOs have taken loans from
CMS under the Advance Payment ACO Model. This
program gives assistance to providers that suffer
from, according to the program description, “lack
of ready access to the capital needed to invest in
infrastructure and staff for care coordination.”
Early Commercial Successes
Nobody knows exactly how many ACOs or ACO-
like arrangements exist in the private market,
but estimates by Leavitt Partners, a health care
business intelligence firm, indicated several
hundred (see chart, page 19).
Several have already reported successes.
In the competitive Sacramento market of Northern
California, one of the earliest ACOs is a shared-risk,
shared-savings arrangement conceived of in 2007
that produced unprecedented zero premium increase
in 2010.
Hill Physicians Medical Group, a 3,700-physician
practice based in San Ramon, Calif., working
under capitation; and Dignity Health (formerly
Catholic Healthcare West), a hospital group with
facilities across Northern California and working
in a fee-for-service model, partnered with insurer
Blue Shield of California and purchaser California
Public Employees Retirement System (CalPERS),
in the ACO. By analyzing cost drivers, the partners
identified IT integration, drug cost reduction, reducing
practice variation, care coordination and chronic care
management as key to reducing costs and improving
quality. In the first year, the partnership saved
$20 million, split between the three partners, and
reduced readmissions by 22%. Inpatient costs per
day declined $240 for the ACO patient population,
versus an increase of $200 for non-ACO members.
Halfway through the second year, savings
continued apace.
On the other side of the country, Blue Cross Blue
Shield of Massachusetts saved $107 per patient in
the second year of an ACO-like arrangement called
the Alternative Quality Contract, when compared
to the costs of traditional fee-for-service medicine.
The Mass Blues contracted with 1,600 primary care
physicians and 3,200 specialists in 11 physician
groups. Doctors received a global budget that
covered the continuum of care, and won incentive
payments for reaching certain quality targets. While
overall costs didn’t decline in the ACO, provider
participants reduced the rate of increase by 2.8%
per year, on average, while improving care for
chronically ill adults.
California is the Future
With its long history of managed care, large
integrated medical practices and high penetration
rates of Medicare Advantage plans, California is
fertile ground for ACO development. Indeed, the
state has as many as 32 ACOs in contracts with
payers, according to the California Healthcare
Foundation, a non-profit, grant-making organization
aimed at increasing health care accountability and
transparency while boosting outcomes and access.
Interest is coming from hospitals, payers, medical
groups, even employers.
“One of the reasons we’ve seen (the ACO trend)
take hold pretty strongly in California is our history
of managed care,” says the California Healthcare
Foundation’s Shannon. “We have large medical
groups that have history of working under capitation.
“The initial Pioneer
ACOs tended to be
larger groups with
a lot of capital to
invest in technology.
The predominant
makeup is physician
organizations, and
secondarily, PHOs
(physician-hospital
organizations).”
Kirk Clove
President,
Collaborative Health Systems

They are used to delivering good-quality care. The
providers know how to deal with care coordination,
and the patients do, too.”
What’s more, other states – such as Minnesota,
Cleveland and Arizona – with a history of
provider coordination should see ACOs take off,
Shannon says.
But not all players are equal. It takes significant
dollars to invest in the information technology,
advance practice nurses and other resources
needed to successfully manage population health
and lower costs.
“We’re finding that the organizations embracing
ACOs are the haves, versus the have-nots,” Shannon
says. Hospitals with a good reputation, deep pockets
and large market share, such as a children’s hospital
or academic medical center, will likely find itself
an essential part of an integrated delivery system
becoming an ACO. Weaker, less-profitable hospitals
may be pushed to the side, she said.
Separately, specialty ACOs are emerging in California
to handle particular patient groups. In December,
the state’s Department of Health Care Services
announced plans to contract with five ACO-like
organizations to manage the care of seriously ill
children. The kids, up to age 21, have a number of
serious conditions such as cerebral palsy, cancer,
heart disease or cystic fibrosis, and the California
Children’s Services program covers their care. While
cost savings may be a byproduct of the pilot, the
main goal is to better coordinate kids’ care.
And in Los Angeles County, the Regional Accountable
Care Network, a self-proclaimed ACO, is forming
between a large federally qualified health center and
several hospitals to care for the region’s poor and
uninsured. The goal is to improve population health.
Finally, there’s the idea of offering ACOs directly,
without a health plan intermediary, on state
exchanges, says Patrick Johnson, CEO of the
California Association of Health Plans. The California
Health Benefit Exchange, like those in other states,
aims to launch in 2014 as an electronic shopping
place or portal through which individuals and small
businesses can buy health insurance. Buyers will
be able to easily compare plans on price, coverage
and quality.
“As the ACO concept evolves, can an ACO that isn’t
a state-licensed HMO under state law qualify and
compete on the exchange?” Johnson asks. “From
conversations with some people high up in medical
groups – they are looking at that. In California, you’ll
see experiments with ‘delivering on the promise’ of
managed care that exists already. Then, you’ll find
some newer, different models that may try to achieve
the goals of an ACO by internalizing those functions
that insurers and health plans traditionally have
achieved: generating revenue, managing contracts,
applying quality control measures.”
Ginsburg concludes that right now, across the
country and in government programs, it’s the fun
stage of ACO development.
“They’re all volunteers,” he says. “And payment rates
in Medicare are based on recent experience.”
In the future, Ginsburg warns, expect bundled rates
across a community. “Then Medicare could say,
we’re going to cut payment rates for providers who
are not contracting with us on a bundled basis,”
he says.
While the speed of this transition is hard to gauge, it
will be driven by Medicare’s need to save money. “In
the future, ACOs will be less voluntary.” Expect the
commercial market to follow.

The Learning Lab for
Health Care Transformation
By Todd Sloane, Editorial Manager, Press Ganey Associates
Virginia Mason’s
Production System,
Modeled on Toyota’s, is
About Reforming Health
Care from the Inside Out
THE LEARNING LAB FOR HEALTH CARE TRANSFORMATIONCOVER STORY
scene from the future of health care: On an inpatient unit, nurses
work in U-shaped pods and spend almost all of their time on direct
patient care. Nurses pull workstations into patient rooms, doing
their charting documentation “in flow,” improving the accuracy of the chart.
Nursing leaders and senior executives walk through, asking questions about
how things are going. Production boards show the on-time status of the
unit. Most supplies are located at the point of use. A nearby medication station
has a light showing whether it is available. An electronic console shows the
status of all incoming patients. Almost no steps or time are wasted.
A

Actually, the scene is today at Virginia Mason Medical
Center in Seattle, but if health care organizations are
to survive in a future of shrinking reimbursements
and new demands for quality and efficiency, they
should take a long, hard look at what Virginia Mason
is up to in the Emerald City.
Over the past 11 years, Virginia Mason has become
the learning lab of health care transformation. Its
work has shown that it is possible to achieve higher
quality and safer care while lowering costs, improving
patient satisfaction, almost eliminating staff turnover
and staying competitive business-wise.
The basis for this transformation is a management
process called the Virginia Mason Production
System (VMPS). It was adapted from the Toyota
manufacturing process, which uses techniques of
waste reduction and standard work to achieve the
highest quality at the lowest possible cost. Other
health systems have adapted elements of the Toyota
system or other quality systems such as Six Sigma,
but at Virginia Mason, standard work is now in the
warp and woof of the institution.
The process of change began back in 2001,
when the medical center adopted a new
strategic plan, clearly establishing the patient as
the ultimate beneficiary of the care process (see
page 29). Shortly thereafter, it also developed a
new “Physician Compact,” defining a shared vision
for the organization’s responsibilities and the
physician’s responsibilities.
“The compact is about examining all of the operating
assumptions in health care,” says Gary S. Kaplan,
MD, the chairman and CEO of Virginia Mason.
“The old, implied compact was around entitlement,
protection and autonomy for doctors. It was maybe
great for them, but it was clear that it wasn’t going
to work if we were to move to a system built
around teamwork, collaboration, evidence-based
medicine, guidelines and pathways, and electronic
medical records.”
The process of creating the compact was in some
ways more important than the words on the page,
Kaplan notes. The months-long process brought
physicians together and made them much more
aware of the goals of the organization.
The Search for a Management System
At the same time, Kaplan was trying to solve the
medical center’s significant financial and quality
challenges. Three years prior, the hospital had posted
its first year as a money-losing operation,
a hit that was repeated the next year. The
publication of the Institute of Medicine’s To Err is
Human report pushed clinicians to question the
safety and clinical effectiveness of the care they
were providing. So Kaplan began casting around for
a reliable management method to apply to a health
care organization.
Gary S. Kaplan, MD, has led a 10-year effort at Virginia Mason Medical Center to reduce variation in care,
eliminate waste, adopt evidence-based medicine and establish a blame-free culture of patient safety.
Although he surveyed some of the most prestigious
health systems in the country, he could not find a
methodology in health care that was successful in
bringing about consistent quality and safety. “At that
time, nobody in health care had done much with the
Baldrige criteria. Six Sigma was just getting started,
and nobody in health care had touched Lean or the
Toyota Production System,” Kaplan says. “Almost
serendipitously we found out what Boeing was up to
right here in Seattle.”

Quietly, Boeing had applied Toyota methods to create
a great track record of safety, quality and efficiency
in building jets. “What we saw at Boeing and really
liked about the Toyota Production System was it
is a holistic philosophy, a way of thinking – even
a way of life,” Kaplan says. “Through discussions
with current and former leaders at Boeing and with
other manufacturing firms using Toyota, we realized
that while manufacturing may seem very different
superficially from health care, this management
methodology could bring about reliable results in
any process.”
Not long thereafter, Kaplan led his entire senior
management team, clinical leaders and even the
board chairman of Virginia Mason to Japan to spend
two weeks totally immersed in the Toyota process.
It was not a risk-free trip, as local press had gotten
wind of it, noting that a nonprofit health system on
the financial brink was spending an unknown
amount of money to learn about how to control
production costs.
The trip involved actual work on the shop floors at
Toyota and the Hitachi air conditioning plant. The
team saw how real-time, not retrospective, quality
assurance works. They saw little wasted motion,
empowered employees who could “stop the line”
if they saw something amiss, and managers out
working alongside production workers. The Virginia
Mason team members helped redesign some Hitachi
production methods.
Very quickly, everyone on the trip saw how the
Toyota Production System attributes could be
applied to health care delivery.
“This whole thing is about large-scale culture
change,” Kaplan says. “We arguably have changed
faster than any other health care organization in the
last decade, and what we are doing is challenging
all the old assumptions. We learned this on that first
trip to Japan. When we created the Virginia Mason
Production System, we knew it would be more
than a set of tools. It is not a process improvement
method or a quality improvement method, but
a complete management system. We use it for
strategic planning, for budgeting, for management –
everywhere in our organization.”
Virginia Mason
Medical Center
Virginia Mason Medical Center in Seattle is a nonprofit, integrated health care system with
a large, multispecialty group practice of more than 450 physicians; a 336-bed acute care
hospital; the Benaroya Research Institute; a skilled nursing facility for patients with HIV/AIDS
and other complex conditions; and the Virginia Mason Institute, a nonprofit education and training
organization dedicated to teaching the Virginia Mason Production System management method
to other organizations. Virginia Mason was named Top Hospital of the Decade at the Leapfrog
Group’s 10th anniversary gala in Washington, D.C., in 2010.
During 2011, Virginia Mason was also placed in the national spotlight with accolades for the
book Transforming Health Care: Virginia Mason Medical Center’s Pursuit of the Perfect Patient
Experience. The book details Virginia Mason’s journey in transforming health care during the past
decade, long before the Affordable Care Act began to require change within the industry.
The medical center’s new pavilion was
designed around reducing waste and
providing patient-centered care.

A scene from Japan: Robert Mecklenburg, MD, the
medical center’s chief medical officer, was preparing
for the next day’s work at Hitachi. A sensei – a
Japanese master teacher in the Toyota methods –
was there. “Senseis are formidable people, highly
respected,” Mecklenburg says. “They are relentless
in critiquing work and finding opportunities to
improve the work you are doing.” The sensei asked
through his interpreter for the doctor to sketch out
the care pathway of a patient coming to Virginia
Mason for a routine office visit. He started to draw
the path, including boxes representing waiting rooms.
The sensei asked what those boxes represented.
Learning that patients often spent 45 minutes waiting
in these rooms for scheduled appointments, the
sensei looked mortified.
At the end, he asked, “Aren’t you ashamed?” All
Mecklenburg could do was nod yes.
“This is the harsh beauty of the teaching,” says
Mecklenburg, now the medical director of the
Center for Healthcare Solutions at the Virginia
Mason Institute. “Not only was it disrespectful to
keep patients who had put themselves in our care
waiting, we had actually institutionalized the process
of waiting. We allocated acres of space for it, with
parking capacity, coffee in the waiting rooms,
Internet connections and staff to track the queues.
And I was ashamed. Eleven years later, I am still
attempting to redeem myself.”
Building Buy-in
Once back in Seattle, the team members knew
there was no turning back from the path they had
embarked on in Japan. But they also knew how
different this new way of doing things would be
and how it might not resonate well with many
longtime staff. Almost overnight, doctors and nurses
with decades of professional experience would
see their work upended. It would now be about
eliminating variation in care, standardizing processes
that lent themselves to it, utilizing evidence-based
medicine and establishing a blame-free culture of
patient safety.
“When we first raised the notion of standard work,
our doctors were aghast,” Kaplan recalls. “You heard,
‘This is cookbook medicine, standardized mediocrity,’
and so on. And it took a long while, but once doctors
began to understand it, that it is about lowering the
burden of work and actually freeing them to spend
more time with patients, more time with colleagues
for academic pursuits, more time with family, then
they began to be the biggest supporters. Now they
say, ‘We need more standard work.’”
The VMPS was disseminated over time through
dedicated resources and training of all medical
center staff. The medical center created a Kaizen
Promotion Office dedicated exclusively to leading
improvement efforts and disseminating VMPS
tools and knowledge across the organization.
(“Kaizen” is Japanese for “continuous incremental
improvement.”) The office has 25 full-time staff.
Department leaders regularly rotate into the Kaizen
office and back into management, enhancing the
development and spread of VMPS acumen in
the organization.
Leaders, including Kaplan, spend a lot of time on the
“genba,” or shop floor, another key element of the
production system. Continuous quality improvement
requires continuous conversation about current
processes and problems. Leaders also attend
weekly “stand-up reports” – updates on the results
of current improvement efforts. And a “Report
Out” session every Friday in the medical center’s
auditorium is open to all employees. There, teams
working on that week’s improvement projects share
their progress with colleagues.
Most of the projects are called Rapid Process
Improvement Workshops, or RPIWs. These are
typically five-day events involving a team that
uses rigorous methods to examine a problem,
come up with workable and adaptable solutions,
test the solutions and ultimately disseminate them
if they work.
“Not only was it
disrespectful to
keep patients who
had put themselves
in our care waiting,
we had actually
institutionalized the
process of waiting.
We allocated acres
of space for it, with
parking capacity,
Starbucks in the
waiting rooms,
Internet connections
and staff to track
the queues.”
Robert Mecklenburg, MD
Medical Director,
Center for Healthcare Solutions,
Virginia Mason Institute

One such RPIW involved solving the issue of the
time nurses wasted hunting for supplies in the units.
A team identified a set of high-use supplies, and a
customized box was installed in each patient room
with those supplies, which are replenished on a
regular basis, dramatically reducing walk time to the
central supply location.
Further RPIWs accelerated the revolution in nursing
care. Nursing assignments were redesigned into
small, geographically proximate patient group
clusters to reduce walk time. A new inpatient tower
was designed to limit steps nurses take. Patient
handoffs took place in patient rooms, eliminating
reporting rooms.
“A U-shaped cell is the most efficient layout for
workers to reduce motion and waste of time. In
health care we don’t organize our work in a way that
optimizes our time and makes us more effective and
efficient,” says Charleen Tachibana, RN, senior vice
president and chief nursing officer at Virginia Mason.
“The way nursing assignments used to be made
often took nurses off to the end of a long hallway or
to different locations in the hospital. So they weren’t
in ready access to their patients. One of the key roles
as nurses is in patient safety, in making patients feel
safe. You can’t do that if you are spending more than
half your time away on non-nursing duties.”
Together, the changes led to dramatic results: Nurses
now walk about 0.6 mile per day, down from more
than five miles. From a productivity perspective, it
is the daily equivalent of 21 additional nurses, each
working a 12-hour shift. Conservatively, it amounts to
more than $4 million in productivity gains every year.
Most importantly, nurses now spend almost 90% of
their time on direct patient care, up from less than
40% just a few years ago.
“The joy of this process is that by fixing these
processes and reducing the burden of work
associated with them, nurses can then be creative in
how they deliver care. Standard work frees you up to
do the higher-level art of good nursing care,”
Tachibana says.
Patients can sense the changes, even if they might
not understand exactly what is different about
Virginia Mason. “When you take the waste out of
processes, patient satisfaction improves,” Kaplan
says. “Patients know it when waiting rooms are
empty and you get right in.”
The patient experience is seen at Virginia Mason as
a critical component of its quality equation, which
is appropriateness X outcomes + service ÷ waste.
“The service components of care are critical,” Kaplan
says. “We are doing lots of things around it, including
embedding experience-based design approaches
into our rapid-cycle improvement workshops and
having patients take part in the RPIWs.”
Patient Safety Alerts
Often, a threat to patient safety or a sloppy action
causes a staff member to “stop the line,” using
Virginia Mason’s Patient Safety Alert (PSA) system.
If it is serious, staff and leaders must convene
immediately to address the problem and find a
VIRGINIA MASON INPATIENT PATIENT SATISFACTION TRENDS, 2005 - 2012
PercentileRank

solution before care continues in that area. PSAs
are categorized as red, orange or yellow. Red events
are the most serious, for example, life-threatening
“never” events, and anything else that could pose
potential serious harm to a patient, including near
misses, security issues, falls with injuries and serious
pressure ulcers. Orange events are less severe and
typically involve more than one department. Yellow
alerts are simple process mistakes or latent errors.
Of the errors reported, 1% are red alerts, 8% are
orange and the rest are yellow.
There are 400 PSAs per month, but leaders
want more. One recent PSA involved the supply
chain, where a lack of surgical kits was seen
as jeopardizing operations. Another was a
broken elevator in a patient care area, affecting
patient transport.
A nurse is empowered, even encouraged, to call
out a physician for failing to follow protocols.
“The economic costs of defects are enormous,
but they pale in comparison to the human cost of
medical errors. And we know that without shining
the brightest light on medical errors, or near misses,
or even things that only cause staff concern, that
we are not going to be able to prevent errors,”
Kaplan says.
Virginia Mason’s board reviews all red PSAs and
must sign off on a final report before the process is
deemed mistake-proof.
The Coffee Collaborative
Part of the success of the VMPS is wringing waste
from the system, but in 2004, despite three years of
effort, Virginia Mason was faced with pressure from
payers. Its quality was high, but its focus remained
on care for acutely ill patients, and costs had not
been adequately controlled.
That year, Starbucks, the coffee empire based in
Seattle, had an ongoing issue with store personnel
who had chronic back pain. Employees were
frequently absent, and when present were not fully
productive. The aggregate costs of treating back pain
were high, and long delays for patients to receive
an appointment at Virginia Mason led to longer
absenteeism. Starbucks – through its insurance
company – called on Virginia Mason to redesign how
the medical center cared for patients with back pain.
VIRGINIA MASON MEDICAL CENTER PHYSICIAN COMPACT
Organization’s Responsibilities Physician’s Responsibilities
Foster Excellence
n Recruit and retain superior physicians
and staff
n Support career development
and professional satisfaction
n Acknowledge contributions to
patient care and the organization
n Create opportunities to participate
in or support research
Listen and Communicate
n Share information regarding strategic intent,
organizational priorities and business decisions
n Offer opportunities for constructive dialogue
n Provide regular, written evaluation
and feedback
Educate
n Support and facilitate teaching, GME and CME
n Provide information and tools necessary to
improve practice
Reward
n Provide clear compensation with internal
and market consistency, aligned with
organizational goals
n Create an environment that supports
teams and individuals
Lead
n Manage and lead organization with
integrity and accountability
Focus on Patients
n Practice state-of-the-art, quality medicine
n Encourage patient involvement in care and
treatment decisions
n Achieve and maintain optimal patient access
n Insist on seamless service
Collaborate on Care Delivery
n Include staff, physicians, and management
on team
n Treat all members with respect
n Demonstrate the highest levels of ethical
and professional conduct
n Behave in a manner consistent with
group goals
n Participate in or support teaching
Listen and Communicate
n Communicate clinical information in clear,
timely manner
n Request information, resources needed to
provide care consistent with VM goals
n Provide and accept feedback
Take Ownership
n Implement VM-accepted clinical standards
of care
n Participate in and support group decisions
n Focus on the economic aspects of our practice
Change
n Embrace innovation and
continuous improvement
n Participate in necessary organizational change
© Virginia Mason Medical Center, 2001

Virginia Mason collaborated with Starbucks, the
insurer and several other major employers to
establish five governing principles for what would be
called Marketplace Collaboratives to deal with these
high-cost, high-volume problems.
The principles included:
n A focus on customers’ highest costs
n Adopt the customers’ definition of quality
n Create evidence-based clinical value streams
n Employ systems engineering to remove waste
n Use a cost-reduction business model
Virginia Mason then studied and “mapped” the
back-pain value stream, revealing multiple areas of
waste. It took too long for the spine clinic to answer
the phone, too long a wait for the initial appointment,
further long waits for MRIs, additional waits to see
the physician again, and then more waiting to
begin treatment.
The chief of physical medicine and rehabilitation
at Virginia Mason decided that patients should be
sorted into complicated and uncomplicated cases.
The uncomplicated cases generally did not need an
MRI or to wait to see an orthopedic surgeon. These
patients could begin treatment right away with a
physical therapist.
In order to eliminate waiting time, the clinic
converted to a system of same-day appointments.
Patients were evaluated by a team of a physical
therapist and a physician. The physical therapist
would see the patient first, take a history and conduct
a physical exam. The physician then would join the
therapist and hear the history; if pain medications or
imaging studies were needed, the physician would
order them. Physical therapy would commence at the
first visit.
The process eliminated the high cost of specialists’
time, which runs more than $3 per minute. A physical
therapist costs less than $1 per minute.
By evaluating the value of MRI for uncomplicated
pain, use of this costly diagnostic tool dropped by
nearly a third. The spine clinic was able to see many
more patients in less space with providers who had
much better skill-task alignment. All of this led to a
profitable service line.
Reducing the use of MRIs was far more difficult to
implement than the other changes. Many physicians
initially ignored the new evidence-based guidelines.
So evidence-based decision-making was baked into
the electronic medical record; the ordering screen
requires physicians to check off a valid indication for
an MRI.
Since the early work, clinical value streams have now
been mapped for uncomplicated headache, large
joint pain, breast concerns not related to cancer
screening, diabetes, upper respiratory conditions,
depression, chest pain and abdominal pain.
A scene from today at Virginia Mason Kirkland, a
multispecialty clinic: Kim R. Pittenger, MD, a primary
care physician, steps out of a patient exam room and
stops at a “flow station,” where his medical assistant
quickly hands him a couple of notes and moves on
to prep the next patient. Pittenger quickly enters
notes on the last patient, returns a phone call, checks
a lab result and moves on to the next patient. By
doing small batches of non-direct care throughout
the day, and working with a medical assistant
An RPIW in action: A team reports on its Rapid Process Improvement Workshop, one of hundreds that have been carried
out at Virginia Mason.

Sep oct 2012 partners press-ganey

Sep oct 2012 partners press-ganey

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