RSNA: IDNs, not ACOs, may be future for hospitals
CHICAGO—Hospitals, aiming to cut costs while simultaneously improving patient care, are increasingly joining integrated delivery networks (IDNs), which now make up 50 percent of U.S. hospitals, said Abraham Seidmann, PhD, professor, Simon Graduate School of Business in Rochester, N.Y., Nov. 28 at the 97th Scientific Assembly and Annual Meeting of the Radiological Society of North America (RSNA).
In the wake of healthcare reform, rising consumer expectations and a healthcare spending rate that is being surpassed by the national gross domestic product, hospitals are eyeing different service delivery models to provide quality care while keeping the bottom line in check. The trend can be seen in other sectors of the economy as well.
“Banks are merging, gas stations are merging, pharmacies are merging and medical business will follow the same route,” he said. “The independent hospital is a thing of the past.”
IDNs allow organizations to share in savings, while also improving their bargaining power. There are currently about 400 IDNs within the U.S., ranging in size from groups of two to as many as 30, according to Seidmann.
“IDNs are the new molecules of healthcare delivery and the atoms are the hospitals,” he said. “The idea behind the IDN is to provide a good number of providers with one governance board which coordinates the activities and provides for hospitals, specialties, nursing homes and primary and tertiary care facilities under one umbrella.”
Most hospitals are hesitant to join accountable care organizations (ACOs), according to Seidmann, primarily because the model is likely to create tremendous price pressures on physicians, administrators and medical imaging services.
“There will be a few dozen ACOs within the nation in a few years,” he said. “Most of the big hospitals are reluctant to join, they don’t know what it means, they fear capitation, or prefer other payments for service.”
Another cost-saving measure that is increasingly being utilized by both large and small hospitals is group purchasing orders (GPOs), which allow collaborations of hospitals to buy parts and products in larger quantities for lower prices. For smaller hospitals, Seidmann said they get parts at much cheaper prices, and larger hospitals are using the price quotes to negotiate even further.
Clearly, the changing market landscape does present notable challenges, Seidmann said. Another major concern, and where imaging feels the pinch, is the commoditization of healthcare services, and whether they will be pursued based on price, rather than quality. Specifically, how can one medical imaging facility advertise that they might provide better quality service than a competitor, without stepping on toes and creating tension within the community, Seidmann asked.
“If I think we do a better job of image design, image management and dose reduction, how can we communicate our quality to the respective physician without offending our colleagues? How do we communicate to the public that we do a better job? It’s a delicate issue,” said Seidmann.
In the wake of healthcare reform, rising consumer expectations and a healthcare spending rate that is being surpassed by the national gross domestic product, hospitals are eyeing different service delivery models to provide quality care while keeping the bottom line in check. The trend can be seen in other sectors of the economy as well.
“Banks are merging, gas stations are merging, pharmacies are merging and medical business will follow the same route,” he said. “The independent hospital is a thing of the past.”
IDNs allow organizations to share in savings, while also improving their bargaining power. There are currently about 400 IDNs within the U.S., ranging in size from groups of two to as many as 30, according to Seidmann.
“IDNs are the new molecules of healthcare delivery and the atoms are the hospitals,” he said. “The idea behind the IDN is to provide a good number of providers with one governance board which coordinates the activities and provides for hospitals, specialties, nursing homes and primary and tertiary care facilities under one umbrella.”
Most hospitals are hesitant to join accountable care organizations (ACOs), according to Seidmann, primarily because the model is likely to create tremendous price pressures on physicians, administrators and medical imaging services.
“There will be a few dozen ACOs within the nation in a few years,” he said. “Most of the big hospitals are reluctant to join, they don’t know what it means, they fear capitation, or prefer other payments for service.”
Another cost-saving measure that is increasingly being utilized by both large and small hospitals is group purchasing orders (GPOs), which allow collaborations of hospitals to buy parts and products in larger quantities for lower prices. For smaller hospitals, Seidmann said they get parts at much cheaper prices, and larger hospitals are using the price quotes to negotiate even further.
Clearly, the changing market landscape does present notable challenges, Seidmann said. Another major concern, and where imaging feels the pinch, is the commoditization of healthcare services, and whether they will be pursued based on price, rather than quality. Specifically, how can one medical imaging facility advertise that they might provide better quality service than a competitor, without stepping on toes and creating tension within the community, Seidmann asked.
“If I think we do a better job of image design, image management and dose reduction, how can we communicate our quality to the respective physician without offending our colleagues? How do we communicate to the public that we do a better job? It’s a delicate issue,” said Seidmann.