Across the industry, operating margins are getting slimmer while the demand to deliver high-quality care is increasing, leaving many organizations with no choice but to explore M&A. There is, however, another option. In 2014, three health systems joined to form Trivergent Health Alliance, an entity that enables them to maintain their identity as individual institutions while leveraging the purchasing power of big player. In this interview, David Quirke talks about how the concept came about, the pros and cons of being a “trusted advisor” to three organizations, and his biggest goals for 2017. He also discusses the work his team is doing in population health and patient engagement, and the benefits of having walked in different shoes before landing in the CIO role.
- Trivergent’s conception
- 3 health systems, 1 Triple Aim
- “The purchasing power of a $billion organization”
- Sharing best practices — “There’s tremendous opportunity.”
- Challenge: Having to sell three times
- Alliance-wide IT steering committee
- Double duty as site CIO at Fredericks & corporate CIO
- Pop health plans
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The concept was hatched in terms of what we could do together while remaining three separate independent health systems, yet coming together in a model where costs could be shared, efficiencies could be gained, and best practices could be shared.
Each organization runs between $300 to 500 million a year, yet we have the purchasing power of a billion-dollar-plus organization. In that regard, I think there’s tremendous opportunity for the three organizations to stay true to their core purpose while getting some of the benefits of a larger scale organization.
We validate each strategy, each approach, and each operational opportunity three times. And so you sell a concept three or more times before you move it through, but we’ve been very effective at minimizing the bureaucracy.
Each organization’s strategy is different, and that’s off-limits in terms of where we can and can’t participate. But we’re finding that our population health initiatives and many of the supply chain drivers and access to physician drivers remain very similar across the three health systems.
Gamble: Hi David, thanks so much for taking some time to speak with us.
Quirke: You’re very welcome, Kate.
Gamble: I think a good way to start would be to give some background information about Trivergent Health Alliance — specifically how and why the organization was formed.
Quirke: The concept for Trivergent Health Alliance was originally formed on Halloween night of 2013 when the CEOs of the three health systems involved — Frederick Regional Health System, Meritus Medical Center, and Western Maryland Health System — got together and were having discussions and dialogue around the challenges that standalone health systems faced in terms of viability and sustainability, and essentially focused around the triple aim of quality and cost efficiency.
The concept was hatched in terms of what we could do together while remaining three separate independent health systems, yet coming together in a model where costs could be shared, efficiencies could be gained, and best practices could be shared across the three health systems. A working group was put together and the concept was formed. Originally, we talked about moving seven entities into this new shared services model. They were information services, of course, laboratory, pharmacy, human resources, revenue cycle, and supply chain. And at the time it also included urgent care or immediate care, but they had some anti-trust restrictions, so we decided to not do urgent care. Essentially, that was the model.
We went into about a year and a half of planning and stood up Trivergent Health Alliance in July of 2014, and moved 1,150 employees from the health system employment over to Trivergent Health Alliance employment. We put together goals and targets for each one of the service lines to achieve over the next three years in terms of goals, efficiencies, opportunities, quality initiatives, and of course, cost savings across the five divisions of that Trivergent Health Alliance. In a nutshell, that’s our mission and focus — to provide services to those five categories to the three health systems in a services model with defined service-level metrics, savings, goals and quality improvements.
Gamble: Very interesting story of how that came together. So with this approach, the hospitals aren’t completely independent, but they’re also not fully integrated. That’s an interesting solution to the M&A question that a lot of organizations have. What have you found to be the biggest advantages and disadvantages with this type of approach?
Quirke: I think the great advantage to this approach is that each of the health systems stays true to its core purpose and its community to serve top quality and affordable healthcare in the markets where they’re servicing the community that they’ve been tasked to serve. It’s also being able to leverage supply chain advantages, technology advantages, and best practices of a large organization. Each organization, in terms of revenue, runs between $300 to 500 million a year, yet we have the purchasing power of a billion-dollar-plus organization. In that regard, I think there’s tremendous opportunity for the three organizations to stay true to their core purpose while getting some of the benefits of a larger scale organization. Certainly I see that as one of the benefits.
They’re also able to share best practices whether it’s pharmacy and therapeutics, in laboratory best practices, or in IT governance and security initiatives that we’ve undertaken over the last two years. So I think from the benefit side of things, there’s tremendous opportunities to do things and afford practices and systems that previously were potentially out of scope for each organization individually.
On the challenge side — and I wouldn’t even really call it a challenge — we validate each strategy, each approach, and each operational opportunity three times. And so you sell a concept three or more times before you move it through, but we’ve been very effective at minimizing the overhead or the bureaucracy, and we’ve set up various different steering groups with representation from each organization to facilitate that process. For example, we have an alliance-wide IT steering committee which is made up of senior executives of all three organizations where we discuss overall strategies, and each local IT steering committee of each organization feeds into that. So a lot of concepts and recommendations that were taken at the local level flow up and vice versa recommendations for overall alliance-wide issues. For example, cybersecurity management comes from the top down, and we’ve done the same in each one of the five divisions within Trivergent Health Alliance.
Gamble: In terms of minimizing the bureaucracy, that’s something that you’ve been able to do in the last two years as far as getting accustomed to how this works?
Quirke: Yes. It’s something that we’ve evolved into and we have adapted as we saw fit. We have a wonderful value analysis group where we look at the various different opportunities for improved quality and cost effectiveness in the supply chain arena. We have representation from the clinical, financial, and operations area of each of the organizations we represent. Concepts and ideas for improving the supply chain processes are discussed through that group. The supply chain folks have been very successful at streamlining that process.
Gamble: Now, do each of the three partner hospitals have a site CIO or something equivalent or how does that work?
Quirke: Yeah, there is a site lead at each one of the organizations that reports to me. I do double duty as a site lead for Frederick Regional Health System and the corporate CIO for the system. We all wear multiple hats on occasion. The site lead at Western Maryland Health System is Bill Byers, who is also our CTO. The site lead at Meritus Medical Center is Jackie Rice who’s also the director of Clinical Applications.
Gamble: In having the dual role — as you and a few other people do — how have you been able to work through that? I assume that the goals are pretty aligned between the two organizations.
Quirke: Between all four organizations, really, with Trivergent being the fourth. But yes, I think our missions remain the same, focused around the triple aim initiative. Each organization’s strategy is different, and that’s off-limits in terms of where we can and can’t participate. But we’re finding that our population health initiatives and many of the supply chain drivers and access to physician drivers remain very, very similar across the three health systems.
Gamble: You mentioned population health. I imagine that was a big part of some of the reasoning behind pooling those resources. Can you talk about where Trivergent Health Alliance stands as far as population health right now?
Quirke: Sure, it’s massive everywhere. Trivergent Health Alliance, on behalf of the three hospitals, actually applied for and successfully received a grant from the State of Maryland for some incubators around developing population health initiatives, partnering with our community and partnering with new stakeholders in terms of our outreach to the community to improve population health. We successfully received a $3 million grant distributed between each of the members. We have work groups across all three entities supported by Trivergent Health Alliance and hosted by Trivergent Health Alliance, where we discuss a lot of our care management and population health initiatives across all three organizations.
Gamble: As far as population health, what are some of the immediate goals you’d like to achieve? Are there certain health areas or conditions that are more of a focus at this point?
Quirke: Sure. Similar to many organizations, we’re looking at chronic heart failure, COPD, and diabetes management, really trying to get an understanding through new community partnership outreach to patients and stakeholders that we weren’t able to connect with before. So we’re partnering with our different care communities and faith-based communities. We’ve established a bridges program which is a lay health coordinator initiative that we’re sponsoring to go out into the community and try to do outreach to the various different stakeholders. We are vetting care managers and case managers in our practices, and supporting our partner physician practices in doing that kind of outreach. We’re also leveraging and investing in an HIE technology that we’re hoping to bring to all three health systems in the alliance.
Gamble: What’s the status for that at this point — are you in the early stages of looking at an HIE?
Quirke: We’ve essentially made an acquisition and we’re in the deployment process at this point.