As a thoracic surgeon and longtime Valley oncologist, Dr. Raymond Schaerf knows that Providence Health hospitals have a solid track record with treating lung cancer. The problem is, he can’t quite prove it. In a few months, he should have the data. Having ready access to that information is one important reason Dr. Schaerf is joining a new for-profit venture, Providence Partners for Health LLC, which would unite some 500 area doctors with Providence Health & Services, one of the largest operators of hospitals in the Valley, in a new model of an integrated network. It would be the first such venture in Southern California. James Lott, executive vice president of the Hospital Association of Southern California, called the venture “innovative and very progressive.” Providence has been working on creating this alliance for 14 months. A prospectus inviting Valley physicians to participate was made public for the first time Oct. 10. The hospital system, which includes locations in Burbank, Mission Hills and Tarzana, hopes at least 500 area doctors will sign up and join the for-profit venture by year’s end. “It’s going to improve patient care and quality, improve our ability to track that care and unite our five hospitals in Southern California so we can all learn from each other,” said Dr. Schaerf. “It’s a no brainer.” If it succeeds — and that’s not altogether assured — the private entity could potentially accomplish what doctors and hospitals have had trouble achieving working separately: to coordinate patient care from the office to the hospital and back, track that care to make sure doctors follow evidence-based best practices, collect data on patients and use that data to drive improvement in care. Ultimately, the alliance hopes to also reduce healthcare costs and position itself to benefit from opportunities opened up by healthcare reform. “If executed well, this model has the potential to be a spectacular opportunity to transform health care,” said Dr. John Armato, chief of staff at Providence Little Company of Mary Medical Center in Torrance, who is spearheading the drive to get area doctors to join the alliance. The PPH would do a number of innovative things that today only integrated networks of doctors and hospitals are able to do. It would adopt and expand the use of electronic medical records, for one. Electronic medical records (EMR) allow doctors to access patient records easily. Dr. Schaerf estimates that only half of Valley doctors have it. The alliance would give doctors who join PPH access to EMR at a discount of up to 85 percent, hospital officials said. PPH also would allow area physicians and the five hospitals to identify best practices for treating a variety of conditions such as diabetes and congestive heart failure, analyze and share patient data to ensure good outcomes and finally, to hold doctors accountable for following proven best practices. In fact, doctors who fail to meet standard protocols would eventually be expelled from the network, said Dr. Armato. The PPH would also eliminate duplication of services and uncoordinated care, said Kerry Carmody, chief operating officer – Southern California region for Providence. For example, if a doctor has already ordered one chest X-ray for a condition, the hospital would have access to that in its EMR and would not need to repeat the diagnostic. “Having that information on a singular medical record will not only keep patients healthier but also eliminate a lot of duplication of care, resulting in better quality of care and lower costs,” Carmody said. Integrated care The idea of joining doctors with hospitals is not new. Kaiser Permanente offers one of the most entrenched models of integrated care in California. Outside of the state, institutions such as Geisinger Health System and the Mayo Clinic are models. But California’s longstanding ban against the corporate practice of medicine has prevented hospitals, outside of Kaiser, from joining forces with physicians, or aligning their incentives, said Lott, executive vice president of the hospital association. The ban prohibits hospitals from directly employing physicians, as Geisinger and Mayo Clinic do. “It’s antiquated and behind the times,” Lott said of the ban. And it drives up healthcare costs. Rising healthcare costs are at least in part due to the fact that hospitals and physicians work at cross purposes, Lott said. Hospitals are typically paid by the diagnosis and thus have an incentive to keep patient stays short. Doctors, on the other hand, are paid by the incident, and often have an incentive to prolong a hospital stay or to order repeated tests. The PPH model would align these incentives. For example, if the typical reimbursement for knee surgery was $5,000, the PPH could go after contracts with large insurance companies and charge just $4,700 for the procedure. If it could then deliver the care for just $4,200, the PPH would keep the savings. The venture also could position Providence to reap some big opportunities opened up by health care reform. The Patient Protection and Affordable Care Act would change the way providers are paid. For example, Medicare would pay providers for outcomes and quality, not just the volume of services provided. In the future, it also could shift reimbursement from a fee-for-service to a capitated model in which Medicare and other payers would reimburse providers for a whole group of patients. Under such a system, providers have to deliver quality and keep a lid on cost. “Reimbursements will be dropping under reform and dropping quickly,” said Carmody. “That is a reality. With coordinated care, however, we can now take excessive waste out of the system, and potentially get paid more for quality outcomes.” As for Dr. Schaerf, joining the PPH will finally help him show some of his more skeptical patients — including his mother in New York who sends all her friends to Memorial Sloan Kettering — that outcomes at Providence can be just as good as they are in some academic medical centers. “I can’t do that today because I don’t have access to the data. To be able to prove that will be very important.”