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How a HEIP can improve quality, decrease costs, and motivate your physicians

December 12, 2017

    When it comes to successfully engaging physicians in behavior change—particularly when you're looking to improve quality and decrease costs—one of the most important components is ensuring hospital and physician goals are aligned with one another. But with many incentive-based quality initiatives focused on primary care providers in the ambulatory space, hospitals and health systems often have limited options when it comes to aligning with specialists.

    Lately, I've had a fair number of organizations coming to me with this challenge, and for most of these organizations, I usually recommend they explore a Hospital Efficiency Improvement Program, or HEIP. 

    At its core, a HEIP is a formal way for hospitals and a select group of specialty physicians to work together to increase quality, improve clinical efficiency, and reduce physician-driven care variation. The HEIP incentivizes participating physicians—at fair market value rate—for the time and effort they put in to impact specified initiatives the hospital or health system is working on. Payments to physicians for providing these services come in the form of both reimbursement for program development and performance-based incentives, which are realized through shared savings.

    Why consider a HEIP?

    A HEIP is specific to the services given across multiple care settings in the hospital. While changes to patient care are developed and led by physicians, a HEIP allows the hospital to identify and prioritize which areas it focuses on so it can support meaningful care improvements, as well as the program's infrastructure and resources. What makes a HEIP unique is that physicians from multiple specialties are incentivized to work together to remove barriers to variation—unlike co-management, which includes only one specialty.

    So why consider a HEIP for your hospital or health system? Most often, I find that I recommend a HEIP to organizations for one (or a combination of) the following reasons:

    • It enhances specialty-focused physician alignment strategies;
    • It can be used to reduce physician driven variation, because it engages multiple specialties across the continuum;
    • It can positively impact hospital margins by improving efficiency and resource use; and
    • It improves patient outcomes by providing higher-quality care.

    How do you develop a HEIP agreement?

    The HEIP agreement can be arranged in two ways: The hospital or health system either contracts directly with individual specialty physician practices, or with a clinically integrated network (CIN) in their market. If the organization chooses the latter option, the CIN identifies which participating specialties would be responsible to influence the outcomes of the selected HEIP initiatives.

    In either case, a HEIP should be designed in collaboration with legal counsel and a third-party fair market valuation firm. Collaborating with these resources is necessary to ensure the HEIP initiatives and incentive distributions are fully compliant with state and federal regulations.

    With HEIP, hospitals finally have an alignment vehicle to incentivize physicians and solve common issues like:

  • How do we improve transitions of care for patients in the hospitals?
  • How do we better manage sepsis and heart failure?
  • How do we engage our hospitalists more effectively?

  • For the hospital, the benefit is not only improved collaboration with providers, higher quality scores, and reduction of physician-driven care variation, but a payer-agnostic enhancement to operating margins from the financial improvements that come from delivering care efficiently and consistently.

    Learn more about HEIPs

    Download our white paper for a more detailed breakdown of how to use a HEIP to motivate physicians to reduce care variation across the system.

    Download the White Paper


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