The Pioneer Spirit: From 1877 to Today`s ACOs, OSF Has Been a Leader

A fair bit has changed in healthcare since 1877. One thing that hasn’t is the commitment of an enterprising group of Illinois nuns who launched then what remains today a cutting-edge system, regionally and nationally, in the evolving world of how American care is delivered.

OSF HealthCare—founded and still owned and operated by the Sisters of the Third Order of St. Francis, a Franciscan apostolic group based in East Peoria—has in particular welcomed the change to value-based care with a hearty embrace, first as a founding member of the Center for Medicare & Medicaid Services’ Pioneer ACO Model, and now as a ground-floor participant in its Next Generation ACO Model.

“Our vision is that we will help lead the transformation of healthcare to improve the health and well-being of those we serve,” says CEO Kevin Schoeplein. “The work of that vision connects back to our pioneering sisters. When they first came here, that’s what they came to do: improve the health and well-being of the communities they were called to serve. So that very much aligns with our work today, and makes it fundamentally and foundationally comfortable for us.”

Why did OSF stick with the Pioneer program when some other organizations didn’t? Among other reasons, Schoeplein says, was because it presented an opportunity to learn. With some of those lessons now discerned, its Next Generation participation holds the promise of a higher-level study.

Early Pioneers

Three years after their arrival in Peoria, the Sisters of the Third Order of St. Francis launched a not-for-profit corporation from which to base delivery of their services. They had property (the current OSF Saint Francis Medical Center) and went about establishing facilities in rapid succession:

• St. Joseph’s Hospital in Bloomington (now the OSF St. Joseph Medical Center);

• St. Anthony Hospital in Rockford (now OSF Saint Anthony Medical Center); 

• St. James Hospital in Pontiac (now OSF Saint James–John W.Albrecht Medical Center); 

• St. Mary’s Hospital in Galesburg (now OSF St. Mary Medical Center); and 

• Delta County Hospital in Escanaba, MI (now OSF St. Francis Hospital).

The OSF footprint now covers 11 acute care facilities and two colleges of nursing, as well as a primary care physician network that encompasses more than 1,200 primary care and specialist physicians and other advanced practice providers. The communities it serves total around three million people. There’s a subsidiary, OSF St. Francis, Inc., consisting of healthcare-related businesses, and a philanthropic arm, the OSF Healthcare Foundation. There’s OSF Home Care Services, a branch that combines facility-based home health and hospice services, and even an aviation division for helicopter transport of patients. It’s expanded into areas such as neurological care, cardiology and pathology services, pulmonary, perinatal and more. OSF’s total assets for fiscal 2015 exceeded $3.3 billion.

“Throughout the rich history of OSF HealthCare,” the organization’s website emphasizes, “what has not changed is the Sisters’ exceptional commitment to the health of our communities. Though they understand that human caring is the most powerful medicine of all, they integrate that belief with an eagerness to provide OSF caregivers with the best in technology and tools for superior patient care. The early Sisters were pioneers in healthcare, and so are the Sisters today.”

Enter the Next Generation

Being a pioneer means taking some chances, and OSF wasn’t reticent about signing on to that first ACO incarnation and other early efforts to reform payment structures.

“At a very foundational level, we thought the path forward for healthcare was economically unsustainable,” says Schoeplein. “We felt there was, now more than ever, an opportunity to help lead the transformation of healthcare into a way that could be sustainable. And we believed that price and volume actions on their own were not going to fix the problem.”

A second driver was the familiar problem of fragmentation in healthcare. Accountable care organizations held the promise of better connecting and coordinating disparate players in the patient’s healthcare journey. For an organization as large and wide-reaching as OSF, that also held allure.

The Pioneer ACOs have of course had their issues. As 2016 dawned, at least 16 of the original 32 participants had dropped out of the program. Cumulatively they had uneven success in holding spending below targets. But OSF found itself on the right side of the line.

“We consider ourselves successful in assuming that financial risk with Pioneer,” says Schoeplein. “When we got better connected and coordinated, it created an opportunity for us to improve our ability to identify and reduce variation. So we were able to reduce our costs at the same time.

“I don’t think just doing any of the value-based alternative payment mechanisms by themselves, without being able to learn and reduce waste through that journey, is going to lead to economically sustainable improvements. You have to look at it in a way that allows you to identify where there are opportunities to reduce variation and waste, for ourselves and our patients, and to be able to reduce the cost that’s the underpinning of the delivery system.”

The first round of Medicare’s post-ACA accountable care foray also included the MSSP (Medicare Shared Savings Program), to which some of the departing Pioneers moved. In exchange for smaller bonuses, MSSP members can avoid the prospect of financial losses (an option Pioneers had initially, but their loss risks later grew).

Enter the Next Generation Model. Intended for ACOs experienced in coordinating care for patients with multiple complex medical problems and building on the experiences of the Pioneer and MSSP efforts, it brings members predictable financial targets and greater opportunities to coordinate care. OSF joined 17 other organizations as founding participants. “We believe the Next Generation Model creates an even greater opportunity to learn,” says Schoeplein.

The Next Generation Model carries higher levels of risk and reward than the earlier programs. Its goal is to test whether such strong incentives, supplemented with tools to support better patient engagement and care management (e.g., telemedicine, home visits), can improve health outcomes and lower costs for fee-for-service beneficiaries. Its success will be measured against the goals of the Triple Aim (better care for individuals, better health for populations and lower growth in expenditures). The model will run for three years, with two optional one-year extensions.

The number of former Pioneer programs joining the Next Generation Model suggests the underlying ideas are still sound, analysts have said, showing that providers are still willing to wager their revenue against improving control, quality and patient satisfaction.

For OSF such participation is a means to put its desire to help lead the way as healthcare changes into real practice.

“We felt it was important for us to actively engage [in these models] if we were going to operationalize our vision of helping to lead and really learn about this journey we’re undertaking to embrace a value-based approach,” says Schoeplein. “We didn’t get into Pioneer for the short-term financial opportunities. We saw it as an opportunity to position the organization to ultimately be successful, because we believed there was going to be a greater orientation to risk. We felt we had an opportunity to learn what would work and what wouldn’t in these new models of care delivery. What were the attributes that would allow us to be more successful? As we undertook more financial and clinical risk, it wasn’t about the near-term financial opportunity; it was really more about having the opportunity to learn from our successes and failures over the long term.”

Paths Forward

With as much experience as any organization since becoming a Pioneer in 2011, OSF was also qualified to help shape and draft coming directions, and its top brass got that opportunity in March 2015 when Schoeplein joined a select group of healthcare leaders invited to Washington, DC, for the launch of new federal initiatives to help shepherd the process. The formation of the Health Care Payment Learning and Action Network was announced by President Obama, and Schoeplein and colleague Bob Sehring, OSF’s Central Region CEO, participated in private sessions with the Department of Health and Human Services to begin identifying ways to put lessons learned about rewarding quality over volume into practice.

Only around 100 organizations were part of this launch. OSF had the additional advantage of being part of the earlier Health Care Transformation Task Force, an elite group of systems, insurers, purchasers, employers and patients working to help guide all this ongoing transformation.

The task force is challenging providers to transition to 75% alternative value-based reimbursement models by 2020. It’s the network’s job to help expedite that move.

“There are numerous work groups that have been set up and are constantly working and learning among each other,” says Schoeplein. “As providers, as payers, as purchasers and as organizations that represent patients, it allows us to dialogue and discuss what’s working and not working, and to frame our findings and insights to policy makers and help them develop a consensus-based policy that allows these advanced payment models to be successful.”

OSF has broken down its transformation journey into four component paths: transformation of the care model, transformation of the operating model; transformation of the payment model; and a culture of innovation. 

That is, it looks to employ new ideas toward organizing better care approaches for patients and instill them in a culture that allows steady improvement of quality, safety and other important metrics.

“We do a lot of that around our simulation work and our innovation and value-creation center,” says Schoeplein, “but it’s also about how we can introduce and understand technology and its implications to disrupt how we, and the healthcare industry, provide care and can create better opportunities to engage our patients and communities.”

OSF in involved in some other pay-for-performance arrangements as well, including things like shared risk, shared savings and capitated contracts. Those are still fairly new endeavors, but they require a high level of connectivity and integration with physicians.

The Importance of Data

Fundamental to all that is data. To ensure its various branches aligned their collection efforts, OSF developed a common EHR based on the Epic platform. It’s now the same across the organization’s entire footprint, and once a patient enters OSF, a unique record follows them throughout their experience.

OSF also developed its own warehousing capacity to store all that data, and built out an extensive analytics capability to comprehend it and translate it into actionable information. The organization is uniquely positioned for that, Schoeplein says, with its large integrated physician enterprise and array of partners across its communities.

“Data is paramount—the ability to link clinical and financial and patient data through similar housing or system overlay is critical,” says Schoeplein. “And that makes culture important: the work around getting everybody aligned to the work going forward, around creating value and all the opportunities that means. To be able to empower individuals to be accountable in that kind of world is really important.

“It’s not something you can treat as a siloed activity. You have to accomplish it around population health as the fabric of the organization that puts the patient at the center of the work.”

That’s an important point, especially for an organization founded with an explicit mission of service. Patients aren’t just numbers, people aren’t just diseases. As you link and integrate and grow, it can be easy to drift out of touch with that.

“To put the patient at the center of the work, I think you really need to find the person within that patient,” Schoeplein adds. “All populations are not the same. When we look at the frail elderly, not all frail elderly are the same. Their needs and requirements and opportunities to deal with the challenges they face are really specific to the person. So it’s important to get connected to the person and the patient.”

That often butts a healthcare team squarely into the various social factors that so regularly influence people’s health and exacerbate the problems of superutilizers. Increasingly we recognize the role of those—and the need to address them—in our quest for healthier populations.

“The future challenge is really going to be better understanding, as we take care of these populations, the social determinants that really impact a person’s health and well-being,” Schoeplein says. “Many times we look at taking care of people’s health, and population health, from a healthcare perspective. Yet sometimes the real opportunities for improvements in health and quality and cost lie in some of the social aspects affecting that person—nutrition, transportation, all those other things. We’re really just scratching the surface of that work.” 

For more on OSF HealthCare: www.osfhealthcare.org.