1. Idea 6: Approach to Over Capacity
Bob Hoban, Chief Strategy Officer
St. John Providence Health System &
Ascension Health – East Michigan

2. Evolutionary Transformation of the Healthcare Industry
Care needs are changing in Michigan: Predominant capital investment has been bricks and mortar resulting in excess capacity
Future focus: Access to primary care services and chronic disease management
Evidence: Per MDCH, Michigan has an excess of over 5,000 beds, on a base of 26,000. In SE Michigan, nearly 3,000 bed excess on a base of 14,000 beds.
Change requires: Aligning the economic incentives of hospitals, physicians and other providers to manage the health of a population

3. Alignment of Economic Incentives
Value Base Purchasing will change the incentives of providers - from producing more services to efficacious care (efficient and effective)
Bundled or Global payment for an episode of services; Hospital, Anesthesia, Surgeon, Pre-, Post-care
Pay for Performance (P4P) on quality of the system of care
Global payment for a population over time
Providers will respond to economic incentives
Drive integration to improve quality outcomes and reduce overall costs
Hospitals will become cost centers – the system will adapt

4. Disease-Centered System of Care

5. Patient-Centered Medical Home
St. John Providence Health System Current Actions to Right Size Capacity
Patient-Centered Medical Home
Coordinated integrated care emphasizing access, quality and safety
163 SJPHS primary care physicians are currently designated as BCBSM PCMH providers
Evaluating effectiveness of serving healthcare needs in three communities with acute care hospitals
Examining potential for program consolidation
St. John North Shores inpatient rehabilitation consolidating to St John Hospital & Medical Center
Continuing to look for other opportunities

6. Accelerating Industry Change
Alignment of economic incentives via Value Based Purchasing initiatives to drive out excess capacity will evolve the industry over a 5-10 year horizon
Opportunity exists to accelerate the change process
Create a “Reverse Hill-Burton” incentive program