Published on June 28, 2012

Questions and Answers about the University of Iowa Health Alliance (UIHA)

Is this a merger or acquisition?

It is neither. It is an alliance that does NOT involve the merger of assets or any changes in ownership or control. It honors local governance’s role in ensuring the respective organizations fulfill their missions and meet the needs of their communities.

If not a merger or acquisition, what is it?

It is an agreement to work together for specified purposes including achieving the “Triple Aim Goals” (high quality, healthier communities and reduced costs), and sharing the expertise, infrastructure and IT technology costs related to participating in new “accountable care” payment plans. The arrangement is being structured through the use of a Limited Liability Company as the legal entity for the alliance organization, with each of the founding organizations being members of the entity. This is a very flexible and commonly used legal structure for organizations working together. Think of it like a group purchasing organization, i.e. existing member hospitals coming together for specific purposes which ultimately benefit patients.

What is the purpose of this alliance?

The new alliance brings multiple health care organizations together to work in new ways for the purpose of advancing the goals of high quality health care services, improved health status of people and improved efficiency, thereby mitigating the upward pressure on health care costs. The alliance will share the expertise, infrastructure and information technology costs of preparing for and managing successfully in an “accountable care” environment. Changes in health care are resulting in the need to analyze patient data in new ways, pro-actively manage the care of groups of patients with chronic diseases and streamline care as patients move across all settings – all of which has been shown to reduce variation and errors, improve quality and reduce costs. In doing this work better, the members of the alliance will be better able to succeed in emerging payment programs for health care, such as “shared savings programs” in which the economic success of the health care provider depends on better managing care and keeping people healthier.

How will this alliance function?

UIHA will create a platform for sharing expertise, selected support services and information technologies, thereby reducing costs for members. Working together in UIHA, members will strive to increase the value to patients and payers of services provided, improve clinical integration between the members, provide more streamlined and coordinated care to patients, and ultimately improve the health of people in Iowa and other regions served. 

Who is involved?

The four entities involved are:

  • Mercy Health Network (MHN), a statewide system comprised of 11 owned and 30 contract-affiliated hospitals, and 142 physician clinics with 625 physicians. MHN is based in Des Moines and includes the Mercy Medical Centers in Des Moines, Sioux City, Mason City, Dubuque and Clinton. It also includes owned community hospitals in Centerville, Dyersville, New Hampton, Primghar, West Des Moines and Oakland, Nebraska.
  • Genesis Health System (GHS), a system of four owned medical centers in Davenport, DeWitt and Silvis, Ill., two affiliated hospitals, numerous outpatient centers including urgent care clinics and ambulatory surgery centers. Genesis Health System has a medical staff of 850 physiciancs. Genesis Health Group employs more than 160 physicians. Genesis is based in Davenport and serves a 10-county region of Eastern Iowa and Western Illinois.
  • Mercy – Cedar Rapids (MercyCare Service Corporation), a health care system serving the Eastern Iowa Corridor includes Mercy Medical Center, the Hall-Perrine Cancer Center, Mercy Health Plaza, multiple outpatient centers, and a network of 13 family practice clinics. The clinics are served by more than 70 physicians, physician assistants and nurse practitioners. Three urgent care facilities and four specialty clinics are also part of the system.
  • University of Iowa Health Care (UI Health Care), based in Iowa City.  UI Health Care is the state’s only comprehensive academic medical center. It includes University of Iowa Hospitals and Clinics, the University of Iowa Roy J. and Lucille A. Carver College of Medicine, and University of Iowa Physicians, the state’s largest multi-specialty physician group practice. UI Health Care serves as a resource to the state with its research, medical education, patient care and numerous other initiatives.

How did this collaboration come about?

There are long-standing relationships between the four health systems.  This decision to collaborate grew very naturally out of those relationships and the belief that we shared similar views about the opportunities to improve patient care, to create healthier communities and to improve the efficiency of providing the best possible care. Mercy – Cedar Rapids and UI Health Care previously announced a collaborative effort to pursue an Accountable Care Organization under Medicare.  Concurrently, the CEOs of the four organizations have been discussing this broader collaboration for several months.

Why did the four health care systems decide to formalize an affiliation? Why now?

The healthcare industry is facing many challenges, including escalating costs, fragmentation of care and uncertainties related to emerging health care reform. Collaboration is an important strategy in meeting these challenges and assuring continued high quality care for our patients. It also is important because of the many changes in health care delivery and financing. Broad-based provider networks are critical to success under the new payment systems, and to achieving the goals stated. Working together allows the organizations to achieve the necessary expertise and size – the skill and scale – to be successful into the future and to bring real value to our patients and communities. 

Specifically, collaboration provides many benefits, including:

  • Promoting clinical integration and improved efficiency, without merger of assets or changes in ownership or control.
  • Sustaining and honoring the members’ local missions and governance authorities, while participating in a larger effort to lead needed changes in the health care system.
  • Creating an infrastructure through which alliance partners/members can share best practices and develop common performance metrics and comparative reporting.
  • Sharing costs, thereby reducing the effective cost per patient for the participating organizations.
  • Encouraging additional health care providers in Iowa and contiguous states to join and participate in these important initiatives.

When does it / did it take effect?

It is effective immediately.

How long have the four health care organizations been discussing this?

The participating members have been working together for nearly two years to analyze the changing health care environment, determine the best strategies and structures for responding to future demands, and to identify the specific services which can and should be shared to create better value for their patients and communities. In the process they engaged nationally-recognized experts in health care issues and, of course, as they reached verbal agreement they engaged attorneys to provide expertise on the specific structure and to develop the legal documents.

How could this affiliation benefit Iowans?

This alliance brings together four of Iowa’s premiere health care organizations, ultimately providing patients with the best of each organization. By design, the alliance is created to support each member in providing value and in creating person-centered care in a better coordinated system. The work of the Alliance will support the members in their efforts to engage patients in new ways to help them maintain their health, thereby reducing their need for higher levels of health care services. The intention is for patients to benefit from more streamlined and coordinated care, improved clinical integration and sharing of expertise, cost containment efforts and, ultimately, improved health.

What efforts are included in this new alliance?

Examples of specific UIHA efforts will include:

  • Assisting members in developing performance metrics and comparative reporting to support improvement efforts, i.e. using comparative data to identify and share best practices and reduce the variations in care, which will improve quality and lower costs.
  • Developing programs to determine and address the health status of communities served.
  • Developing educational programs for health care providers, patients and consumers.
  • Developing techniques and systems for improving patients’ engagement in managing their health.
  • Sharing the high costs of the information systems and experts needed to analyze clinical data and convert it to information that can be used by physicians and others to improve care and better manage populations of patients with chronic diseases.
  • Sharing expertise and operational costs associated with development of “accountable care” initiatives, enabling the members to evaluate and participate in new payment programs offered by governmental and commercial insurance programs.
  • Strengthening primary care to ensure Iowans have access to a “medical home,” through which they can receive preventive services and improved coordination of care across settings and levels of clinical services and specialties.
  • Collaborating in research initiatives.

How will this benefit all participating health systems?

We believe this relationship will have a very positive impact on all participating organizations by assisting them in providing better quality of care, a better patient experience, more efficiencies and, therefore, a more viable and competitive offering of services for the future.

What is an ACO?

The Patient Protection and Affordable Care Act, also known as the health care reform law, encourages the formation of Accountable Care Organizations (ACOs) as a new model of care for Medicare beneficiaries. The goals are to reduce fragmentation of care, improve individual and population health and address escalating health care costs. ACOs are the vehicle for joining doctors across multiple specialties, hospitals and other health care organizations together so patients and communities can benefit. ACOs also are vehicles by which Medicare and private insurance companies will pay doctors and hospitals in the future – based on performance and better care, rather than based on volume, or increased volumes of services.

What role will physicians play in the alliance?

Physicians are integral to its success. Many physicians are fully part of the four founding members, through existing leadership roles and contracted and employment relationships. Physicians will be involved in developing all of the programs and initiatives undertaken by the alliance. Lastly, independent physician groups will be welcome to join the alliance.

Now this has been launched, what happens next?

All of the activities surrounding the initiation of a new organization are underway – getting a physical office established, establishing the Board of Directors, naming a CEO, installing information systems, etc. Concurrently, clinical leaders will begin meeting to develop clinically-integrated services in specific areas of medicine, often expanding on the longstanding relationships between the members. Experts in various areas – such as population health management, education, clinical research, information technology, and other areas will begin meeting with the Board and leadership of the alliance to determine how best practices can be deployed across the state to benefit all members and patients.

Where will the alliance offices be located?

The intent is to establish the alliance headquarters in Des Moines. A specific location has not been named.

What are some examples of current collaborations between the participating organizations?

These are too numerous to list, but some basics include cooperation in organ recovery and transplant services, shared programs in education and graduate medical education for physicians, cardiovascular collaboration between U of Iowa Health Care and Mercy Health Network (Mercy-Des Moines) for a sophisticated treatment for heart failure called LVAD, collaboration between U of Iowa Health Care and Mercy Health Network (Mercy-Clinton) for radiation oncology services, etc.

Who will lead this organization?

Initially, Dave Vellinga, CEO of Mercy Health Network, will serve as chairman of the alliance. A search will begin for a CEO to be employed by the alliance full time.

Is this a response to changes in the Iowa health care market?

The health care environment is changing dramatically all over the U.S.  Many Iowa health care providers are embracing these changes and pursuing participation in the new payment systems and other changes.  The founding members feel they must find a better way to deliver care, and a way to be rewarded for providing value – rather than simply more volume – to continue to be successful, and maintain Iowa’s strong health care services into the future. Many pressures in the environment are causing health systems, hospitals and physician groups to align in new ways. This alliance is a different type of collaboration, which recognizes the potential for members to work together in ways that leverage their individual strengths to benefit the patients and communities they serve.

Will any hospitals, clinics or services close because of this affiliation?

No. The hope is that this alliance will strengthen the members, their affiliate organizations and future members and affiliates, in order to improve Iowans’ access to high quality, affordable care.

What will this do to the cost and quality of care?

This alliance will strive not only to help members provide value to patients, but to help patients become better engaged in new ways to help them maintain their health, thereby reducing their need for higher levels of health care services. Each member organization brings successes in improving quality, in streamlining care and in proactively working with patients to improve and maintain their health. Working together to reduce the variation and streamline care has been proven to improve quality and will benefit everyone – the patient, the payer and the community. Some members of the alliance already have demonstrated how costs can be significantly lowered, by doing care better – using medical homes, health coaches, case managers, electronic disease registries and other tools to provide better care “up front,” thereby reducing the use of inpatient hospital care and other more expensive services. In addition to saving money, these programs have significantly improved the quality of life for patients.

Do agreements like this already exist in other states? What is this alliance modeled upon?

Yes. Similar alliances have been announced by health care providers in Michigan, Wisconsin and elsewhere.

How will the Supreme Court decision affect this alliance?

Once the Supreme Court issues its ruling, members of the alliance will join others across the nation in carefully analyzing the impacts, and adjusting efforts to ensure the positive work being pursued can continue. Most experts believe, regardless of the Supreme Court’s decision, Medicare and private insurance companies will continue down the path of changing the way providers are paid for care – to reward value rather than volume. The Alliance will support the members’ efforts in this regard, as they strive to provide real benefit to Iowa citizens and communities.

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