Understanding the Alphabet Soup of Managed Care Integrated Delivery Systems

The Promise of Integrated Delivery Systems (IDS)

Jack McMeekin, the President and CEO of an integrated delivery system operating in Pennsylvania, shared with participants an IDS' perspective on the potential benefits that many IDSs seek to deliver, the issues and challenges they face in the marketplace, and the implications of key public policy decisions on the ability of IDSs to realize their full potential. He drew upon the experiences of the Croser-Keystone Health System in discussing the vision and goals of integrated delivery systems, namely:

• An enhanced focus on wellness and health promotion and therefore a greater ability to affect health status.
• The provision of a full continuum of services in a user-friendly, one-stop shopping environment.
• The elimination of costly intermediaries.

According to Mr. McMeekin, these goals cannot be achieved through horizontal integration (e.g., the purchase or affiliation of multiple hospitals). Instead, vertical integration involving new partnerships across different types of provider organizations is required. Further, to be effective, these vertically integrated arrangements must:

• Align the economic objectives and incentives of the participating provider organizations.
• Shift their focus from the provision of episodic care to the management of health status across the continuum of care.
• Establish new partnerships with a broad mix of providers, such as home health agencies, medical transport companies, and wellness centers.
• Make greater investments in information systems.

Among the broader points that Mr. McMeekin raised in concluding his presentation were:

• Given the consolidation that is occurring among health plans, interest in IDSs becoming involved in direct contracting with employers and State and Federal health care programs is likely to increase. One benefit of this would be that a broader set of health system choices might be available to consumers.
• To be successful, IDSs will require significant new management and governance skills that are in short supply. Physician leadership also will be critical to their success.
• Not-for-profit health systems face considerable difficulty in accessing the capital needed for information systems and other infrastructure investments.

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