Granite Healthcare Network has a goal to drive down costs while increasing quality of care

Five hospitals have joined together in an effort that they say could revolutionize the delivery of health care in New Hampshire.Granite Healthcare Network – which is made up of Concord Hospital, Elliot Hospital in Manchester, LRGHealthcare in Laconia, Southern New Hampshire Medical Center in Nashua and Wentworth-Douglass Hospital in Dover – has a mission “to lead the transformation of health-care delivery in the communities served by the organizations.”Rachel Rowe, the organization’s newly appointed executive director, said the chief executives of the five hospitals have a long history of working together and have been meeting for the last 18 months in forming the network.”These CEOs understand that health care has got to change. We are not recycling an old model; we can accomplish more together than we can as separate organizations,” she said.The network – described as a “joint venture organization” – is looking to ultimately form one or more accountable care organizations.An accountable care organization, or ACO, is a group of hospitals, physicians, insurers and other providers that agree to share the risk for patient care as well as any cost savings from care that fall within a set of established quality guidelines. Such organizations are mandated in the landmark Patient Protection and Affordable Care Act of 2010, which calls for ACOs to be in place as early as 2012.”Health care is in an incredible era of change,” said Tom Wilhelmsen, CEO of Southern New Hampshire Medical Center, which has 188 beds. “We can continue to work on what we can to change each of our communities as independent providers, or isn’t there a way of looking at this collectively, and collectively using our intellectual property and clinical resources to see how we can apply the size of network to achieve transformation?”Doug Dean, president and CEO of the Elliot Health System in Manchester, parent of the 296-bed Elliot Hospital, echoed that sentiment.”We all have something to give to the network, but more importantly, we all will have something to bring back,” he said.’Not competitors’The five hospital systems in the Granite Healthcare Network represent a powerful provider bloc.According to Rowe, the network members collectively cover an area that includes 82 percent of the state’s population, with more than 50 percent of the state’s hospital admissions. But the five member hospitals say they can have such close ties because the institutions do not consider themselves competitors.Except for some minor overlap in the service areas of SNHMC and Elliot, most of the markets between the hospitals are “distinct,” said Dean.”With the geographic distribution we have, we are not competitors. We are very open-minded, very collaborative, concentrating on benefiting our communities,” he said.Wilhelmsen added, “It is extremely difficult to be competitor and collaborator at the same time.”Within the Granite Healthcare Network, a number of limited liability corporations will be formed.One that has already been created is Granite Shield LLC, a “captive professional liability company,” through which the policyholders own their insurance carrier.To date, LRGH – the only hospital member in the state’s embattled Joint Underwriting Association medical malpractice insurance fund – has dropped out of that entity to join Granite Shield.The other member hospitals of Granite Healthcare Network will likely join Granite Shield, along with a risk management entity that is forming.SNHMC already belongs to one ACO pilot – the New Hampshire Citizens Health Initiative Accountable Care Organization Pilot Program, accounted last summer. Wilhelmsen said his organization intends to remain in both for the time being.”Granite Healthcare Network could actually be in an ACO before any of the pilots, or it could be in a pilot with the Citizens Health Initiative or an insurer, as well as within the Granite Healthcare Network on its own,” he saidAlthough specific groups and metrics are still being identified, Granite Healthcare Network will probably form ACOs around diseases pervasive in the community, such as diabetes, congestive heart failure and obesity.One of the first ACOs to be formed likely will focus on Medicare patients, as part of the federal government’s Medicare Shared Saving Pilot Project.”ACOs aren’t mutually exclusive, except for Medicare, which is distinct on its own,” said Wilhelmsen. “They are mostly differentiated by the funding sources, some private, some federal.”One thing all of the executives already agree on is that ACOs should not be considered rewarmed HMOs.”HMOs were insurance-driven; ACOs are physician-driven, where quality counts as much as the effective use of resources. There is much more collaboration and integration,” Wilhelmsen said.That integration includes the tedious but critical task of getting the hospitals’ information systems to talk to one another.”We are currently talking with vendors to build interfaces,” said Rowe, former associate executive director of the New Hampshire Foundation for Health Communities.With the basic framework and leadership barely formed, most of the details, such as a specific budget, strategic plan and staffing are still in the planning stages.Elliot’s Dean said startup costs so far have been shared “pretty equally” by the members, with some of the captive insurance costs pro-rated by hospital size.While much of the of foundation has yet to be laid, Rowe said, “We are blazing a trail. The CEOs are truly committed and really want synergy. These five hospitals are really positioned well.”