Harvard Business School Case Study - Intermountain

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Intermountain Healthcare Case Study
Gina L. Turley
Northwestern University

In the Harvard Business School case study of Intermountain Health Care (IHC), we learned about the efforts made by IHC to adopt a new strategy for managing health care delivery that is focused on improving care quality while simultaneously saving money. Beginning in 1986 as a series of experiments tying cost outcomes to traditional clinical trials, IHC’s approach to delivering care became known as “Clinical Integration” which “referred to both an organizational structure and a set of tools” (Bohmer, 2002). The organizational structure required a departure from the traditional administrative management model to one that “involved administrative and medical staff working together to implement a system of gathering, storing, and making accessible detailed medical data on each patient”. Once gathered, IHC analyzed that “data across all patients to create decision support tools (protocols) that helped medical providers determine the best medical interventions for each patient and also increase efficiencies” (Bohmer, 2002). Between 1986 and 1996, IHC made two attempts to establish a self-governance model for its physicians, both of which proved unsuccessful. However, through an iterative, continuous process-improvement program highly focused on medical personnel education, IHC was eventually able to establish “quality (defined as process management with measured outcomes) as IHC’s core business approach and to extend full management accountability to IHC’s clinical functions” (Bohmer, 2002).

In 1986, IHC, led by Dr. Brent James, successfully tested Dr. W. Edwards Deming’s theory that “high quality would lead to lower cost” by developing an activity-based cost accounting system that created cost profiles of different strategies for managing particular clinical conditions (Bohmer, 2002). Equipped with these cost profiles, IHC senior management “felt they could realize Deming’s maxim by allowing their physician population to self-manage” and formed The Great Basin Physician Corporation for community physicians within IHC (Bohmer, 2002). While the idea of “self-governance and protocols for care ‘helped pull the physicians together’”, it never really materialized and “sort of died quietly on its own” (Bohmer, 2002). It did, however, set the stage for a quality movement within the organization and in 1991, IHC conducted a series of workshops where James more deeply introduced the concept of protocols to control care delivery and encouraged discussion how IHC might implement them. Though no formal conclusions were reached, those meeting proved crucial as the “shared vision that [they] came away with from that series of meetings has informed [their] decision making ever since” (Bohmer, 2002).

In 1993 IHC again attempted to establish physician self-management, this time “by hiring physician leaders and providing them with management tools.” (Bohmer, 2002). Despite ample financing and training, the program once again proved unsuccessful. In both cases (1986 and 1993), this was primarily due to two issues. The first was that they provided the physician leaders the wrong data, namely, “financial data organized for facilities management, but without the associated clinical detail” (Bohmer, 2002). Per James, “the key to engaging physicians in clinical management is aligning data collection to work processes” (Bohmer, 2002). In the old model, managers thought “in terms of cost-per-facility” but “physicians think in terms of tests and treatments required for a specific condition” (Bohmer, 2002). “You manage what you measure…Doctors manage patients, not money” (Bohmer, 2002). Therefore, if you want to change clinical behavior, you have to provide physicians with the relevant clinical data. The second reason for the failures was that they lacked “an overarching guidance structure” (Bohmer, 2002). Essentially, without direct medical personnel management and...
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