Catholic Health Initiatives' long-term transformation strategy has a bit of the expected – IT investment –and the unexpected – the creation of an insurance business.
These two prongs of CHI's long-term strategy serve to standardize technological infrastructure at the nonprofit's 89 hospitals, community health services organizations, nursing colleges, home health agencies and other facilities in 18 states and offset Medicare reimbursement declines, CHI officials told Healthcare Finance News.
Catholic Health Initiatives' system-wide EHR project, called OneCare, is expected to cost around $2.2 billion and, when it's finished in 2017, serve as a foundation for standardizing and improving clinical and business processes, said Ann Shepard, CHI's chief nursing informatics officer.
"We have a history of being autonomous, unique hospitals, and over time it has become more important to be less autonomous and more prescriptive from the national perspective," said Shepard, a former critical care nurse at one of CHI's founding Sisters of Mercy hospitals. "We're trying to decrease variability."
CHI leaders are investing so much in the OneCare IT system not because of the federal government's meaningful use program, said Shepard, but because they see it as an infrastructure base to help coordinate, measure and improve healthcare – something that will outlive meaningful use.
"We knew that (meaningful use) was an incentive but initially it wasn't our biggest incentive," Shepard said. "We just wanted to get the electronic health record out to the hands of the clinicians to be better clinicians."
As for the system's meaningful use status, midway through the implementation of the OneCare project, only one of CHI's hospitals has started attesting for stage 2, with the rest attesting for stage 1, and most of the system's ambulatory clinics having met one or two years of stage 1.
Shepard said some CHI hospitals and physicians may have to ask the Centers for Medicare & Medicaid Services for a meaningful use hardship exception. "In all honesty, we're trying really hard to not do that," she said.
As CHI, the nation's third-largest faith-based health system, invests in information technology as part of its long-term strategy, it's also building an insurance business that could help offset Medicare reimbursement declines and increase its commercially-insured patient mix.
It also offers CHI an opportunity to expand its business into other markets, as the company noted in a press release announcing that its subsidiary, Collab Health, is in the process of acquiring QualChoice Holdings, the Arkansas-based operator of QCA Health Plan, a health maintenance organization, and its related insurance company.
Arkansas, where Catholic Health Initiatives operates St. Vincent Health System, is "a fantastic place to develop our health insurance capabilities as we strive to better serve communities here and across the nation," said Juan Serrano, CHI senior vice president of payer strategy and operations, in the news release.
CHI's St. Vincent Health System has been accepting patients covered by the statewide QCA Health Plan since its inception in 1996. Since 1999, CHI has also been an investor in the insurer, along with TriZetto Corporation, the University of Arkansas for Medical Sciences, Arkansas Children's Hospital and Tenet Healthcare.
The purchase price of CHI's buyout of those other investors is not being disclosed, and the deal is still subject to approval by Arkansas insurance regulators.
"Making an investment in a quality health plan such as QualChoice is integral to CHI's population health strategies," Serrano said in the press release.
The deal marks CHI's second foray into the insurance business. Last year it acquired Soundpath Health, a small Medicare Advantage plan in the state of Washington, for a reported $24 million.