Redefining the Role of Hospitals

Building the 21st Century Health System Series, Chapter 1 of 5

About the Center for Health Transformation
The Center for Health Transformation, founded and led by former House Speaker Newt Gingrich, is a collaboration of leaders dedicated to the creation of a 21st Century Intelligent Health System that saves lives and saves money for all Americans. Members highlighted in this report include: Siemens, Intermountain Healthcare, Alegent Health, WellPoint, American Hospital Association, Piedmont Hospital, and the Georgia Hospital Association. For more information on The Center, please visit

About Siemens
Siemens Healthcare is one of the world‘s largest suppliers to the healthcare industry. The company is a renowned medical solutions provider with core competence and innovative strength in diagnostic and therapeutic technologies, as well as knowledge engineering, including information technology and system integration. With its laboratory diagnostics acquisitions, Siemens Healthcare will be the first fully integrated diagnostics company, bringing together imaging and lab diagnostics, therapy, and healthcare information technology solutions, supplemented by consulting and support services. Siemens Healthcare delivers solutions across the entire continuum of care — from prevention and early detection, to diagnosis, therapy, and care.

We would like to thank Nancy Bucceri of Chaddsford Planning Associates, LLC, for her assistance with this report. For more information, please visit


By Newt Gingrich
Former Speaker of the House and Founder of the Center for Health Transformation W. Edwards Deming once said, “It is not necessary to change. Survival is not mandatory.” No quote is more appropriate to the current debate over healthcare. We have indeed reached a fork in the road. On one hand, we could reject change and continue down our current path. But by choosing this path we would accept a healthcare system of perpetually rising costs, poor quality, and millions of uninsured Americans. On the other hand, we could embrace change — bold, transformational change — to create a healthcare system that delivers more choices of greater quality at lower costs for every American. That’s what we at the Center for Health Transformation are committed to creating: a 21st Century Intelligent Health System. One that values individual health over sickness. One that encourages individuals to become healthier citizens. A system that uses modern technology to deliver the best care in the world. And a system where every American is insured. This level of change is not only possible, but essential. From costs, to insurance coverage, to quality, our current path is simply unsustainable — as a nation, as communities, and as individuals. But real change will require real change. It will also require courage, leadership, and collaboration from all sides — from citizens, employers, providers, insurers, and policymakers of both parties. To get there, we must implement four transformational changes.1 First, individuals must take an active role in becoming healthier. We can do this by incentivizing individuals to make responsible decisions through closer relationships with their healthcare providers and through wellness programs that reward healthy living.

Second, we must create a culture of health that leads to responsible choices. We can do this by redesigning public and private institutions to encourage better individual choices when it comes to health and wellness. Third, we must dramatically improve and modernize the way we deliver care. This must start with rooting out waste and inefficiencies by fundamentally changing the way we pay for care. We can do this by eliminating any financial incentive to use tests, treatments, or therapies that are not directly beneficial to the patient or the care process. Lastly, we must radically change the way we finance health insurance and healthcare. We can do this by increasing competition in the insurance market and by giving consumers more access to cost and quality data. Hospitals and health systems can play a vital role in achieving these goals. They can be centers of wellness, working in partnership with community leaders, physicians, employers, and citizen groups, to promote health — both of the individuals they treat and the communities where they reside. They can use the world’s latest technologies and evidence-based processes to deliver the best care for the right patient at the right time. And hospitals and health systems can work with governments at all levels, as well as with private insurers, to guarantee that care is affordable, access is real, and that consumers have choice. We are proud to partner with Siemens on this report, highlighting how the country’s leading systems are using health information technology to change the way they practice medicine so that their patients and their communities receive world-class care. From Computerized Provider Order Entry (CPOE) and evidence-based medicine to community leadership and consumer engagement, they truly are examples of excellence that the rest of the country should follow.

Newt Gingrich Former Speaker of the House

David Merritt Project Director Center for Health Transformation

Gingrich, N, Merritt D. Tackling costs of health care requires some huge changes. Des Moines Register, June 13, 2007. 

Despite these challenges, we can see glimmerings of a brighter future, both for our system as a whole and for hospitals and health systems specifically. With momentum and success building in healthcare consumerism, chronic-care management tools, and the widespread adoption of healthcare IT, we know what this brighter future will look like: 100% insurance coverage; healthy and empowered consumers; readily available quality and price information; a culture of health through early detection and prevention; outcomes-driven payment; and ubiquitous, interoperable technology. This transformation requires fundamental changes from all stakeholders in healthcare. Hospitals and health systems have the unique opportunity — and most certainly have the motivation — to embrace such change so that they can be a centerpiece of a 21st century intelligent health system. This level of change requires hospitals and health systems to embrace new values, visions, goals, and metrics of success. Hospitals and health systems can: There is no doubt from anyone in healthcare that we must change. As a country, it is estimated that within the decade, by 2016, total healthcare spending will more than double to $4.1 trillion a year and consume nearly 20% of our GDP.2 State Medicaid budgets are expected to more than double as well. And for individuals, health indicators are heading down, the number of Americans without insurance is heading up, while healthcare costs continue to rise. Today, hospitals and health systems are on the frontlines of this broken system. They persevere every day in the face of mounting challenges, chief among them: • Uncompensated care for patients without insurance • Perpetually rising costs • The inability to hire enough nurses and other skilled providers • Perverse payment models that encourage waste and inefficiency • Growing demands of an aging population • Overcrowded emergency rooms • Lack of broad technology adoption and, therefore, systemwide interoperability • Rising liability costs

1. Redefine the role of hospitals to be centers of community health. This requires that they move from an acute-based, volume-driven model to one that maximizes health, wellness, prevention, early detection, and ongoing health management. 2. Deliver safe, efficient, and effective care. This requires investing in cutting-edge technology, embracing new models and processes of delivering care, and using care guidelines based on evidence. 3. Embrace production models of delivery and efficiency to improve outcomes. This requires incorporating proven systems of production like LEAN Six Sigma into all aspects of clinical operations. 4. Build a true consumer-focused organization with a genuine, core focus on the patient’s experience and well-being. This requires building a model that creates a culture of customer service and deploys the appropriate tools and technologies to engage their patients. 5. Create an engaged, motivated, and passionate workforce. This requires internal changes to how they organize, educate, support, and compensate their employees — from administrative staff to nurses to executives to physicians. These strategies are being championed by many organizations. This report highlights examples of excellence from across the country in each of these areas, proving that hospitals and health systems are not helplessly trapped in today’s broken system. There are pioneers who are building that 21st century intelligent health system — with health information technology at its core — that we all desperately want to see. And with their continued leadership, coupled with others emulating their innovation, we can indeed build a brighter future.

Centers for Medicare and Medicaid Services, Office of the Actuary. National Health Expenditure Projections 2006-2016. 2006. 

the Role of Hospitals
Hospitals have long been the center of healthcare in communities across the country. Most citizens see their community hospital as the place to visit when sick or in need of emergency care. Most do not see hospitals as a place for their ongoing health, focusing on preventing disease rather than just treating it. But that is quickly changing. With a focus on developing community-based programs, investments in continuous process improvement, and integrating the appropriate information technology into the care-delivery process, hospitals and health centers can become centers of community health. The goal is to maximize health by offering programs on wellness, prevention, early detection, and ongoing health management.

Meridian at Home – Remote Patient Management
By 2020, almost 30% of New Jersey residents will be 60 years of age or older.3 And while most of them will continue to live in their communities, nearly 13% of them will have functional impairments that will threaten their independence. Couple this with the potential caregiver pool radically shrinking as the baby boomer generation ages, healthcare costs continually rising, as well as life expectancy increasing, the challenges seem daunting. To stay ahead of this curve, Meridian Health in central New Jersey has been steadfastly transforming its healthcare delivery system from an acute-care model to one focused on maximizing health and wellness for its community. Meridian Health, a nursing Magnet designated health system, provides health services and programs through 70 locations throughout Monmouth and Ocean counties, including four hospitals, 7,500 employees, and more than 1,400 physicians. In 2006, Meridian introduced Meridian at Home, an innovative approach combining traditional home care services, information technology, and clinical intervention strategies designed to keep patients out of the hospital and in their homes.

New Jersey Foundation for Aging. Demographics in NJ.


Meridian at Home is a fully accredited program that effectively provides patients with access to a continuum of services throughout their lives while enabling them to maintain their independence. “This is the only way we see of being able to care for our patients, provide them with the highest possible quality of life, while keeping healthcare costs down,” says Rebecca Weber, chief information officer of Meridian Health. The project began by developing a strategic plan focused on what was required to support the needs of Meridian’s aging community. Using its own clinical and financial data from the previous ten years, Meridian identified the following situations most prevalent for readmission in its community: • Congestive heart failure (CHF) and heart disease; • Chronic obstructive pulmonary disease (COPD); • Failure to manage medications.

Multidisciplinary teams for each situation determined the data to be collected, trigger points, alerts, and interventions to provide the best possible care for the community in these situations and leverage information technology wherever possible. Other diseases such as arthritis and diabetes have been added to the chronic-care program as well. The patient’s home is equipped with a wireless PC that is interfaced to a patient portal. Discreet wireless motion sensors (not cameras) are strategically placed throughout the home, constantly monitoring activities of daily living such as getting out of bed, eating meals, using the bathroom, and taking medications. This information is then transmitted wirelessly to the portal where reports are generated and reviewed by family caregivers through their home PCs or home-health aids at Meridian. Monitoring devices collect clinical information such as the effectiveness of blood clotting medicines, glucose levels, blood oxygen saturation, blood pressure, fluid retention, etc., and transmit it wirelessly to the patient portal where the results are measured against trigger points. When a trigger point is reached, an alert is generated, and the patient is called by a Meridian home health aid to gather additional information and relay further instructions.

“Meridian at Home is the only way we see of being able to care for our patients, provide them with highest possible quality of life, while keeping healthcare costs down.”
Rebecca Weber, Chief Information Officer, Meridian Health 

A doctorate-level pharmacist reviews all medications for efficacy. Medication changes are then sent directly to the home. If an alert repeats itself after a medication is changed or an intervention is completed, Meridian may send a care provider onsite. All of this is done in conjunction with the patient’s physician. Today, there are more than 100 participants enrolled in the pilot program, and anecdotal evidence suggests that patients are staying out of the hospital as a direct result. Patient satisfaction is extremely high because they are enjoying a higher quality of life without fear of being alone. This kind of model, which focuses on maintaining health, preventing complications, and avoiding unnecessary hospitalizations, can be replicated in facilities across the country, be it in the most urban environment or rural area. Hospitals can play this vital role if they have the right priorities and invest in the right information technologies.

Bay Area Hospital – Where Community Drives Vision
“Today’s hospital is educator and employer, consumer and caretaker, activist and advocate, missionary and merchant…a leader in assuring the health and well-being of the community.” Such is the mission of Bay Area Hospital in Coos Bay, Oregon, which greets every visitor to its website with the message “Your Health is Our Care.” Bay Area Hospital, founded in 1952, is the largest hospital on the Oregon Coast and the region’s largest employer, yet it is a relatively small community hospital with 129 beds, 130 physicians, and 1,000 employees. Despite its size, Bay Area has made the commitment to leverage information technology to help it move care delivery into the 21st century. Today, it is on an aggressive path to build a care delivery system that standardizes clinical best practices and integrates information technology with clinical workflow, making the clinical process more efficient while improving patient safety. As a result of its efforts, Bay Area has achieved outstanding success with CMS/ Joint Commission quality measures, including increasing pneumonia vaccination rates by over 87%, consistently achieving 100% performance in acute myocardial infarction care, and earning the “Most Improved Surgical Care Improvement Project Program in Oregon” award from Acumentra Health (Oregon QIO) in 2007.

Three years ago, the leadership team developed a strategic plan that included building an electronic medical record (EMR) system with its community defined as a foundational element. As a result of the strategic planning process, six goals now drive the organization: 1. Measure clinical outcomes 2. Optimize patient safety 3. Employ best practices systemwide 4. Optimize efficiency 5. Establish a true partnership with the information systems vendor 6. Be a premier employer From this plan, sprang a multidisciplinary steering committee that provides overarching leadership to the EMR implementation. The Steering Committee created a group of “change agents,” who are representatives from virtually every area within the hospital and parts of the community that work together to provide analysis, input, and feedback on the planned project. There are 70 change agents representing everything from environmental services to physicians, nurses, clinicians, housekeeping, pharmacy, community agencies, and even labor unions. Participants were selected based on demonstrated leadership skills and, in some cases, the ability to serve as devil’s advocates. “By including all the areas,” says Doug Gauntz, manager 

of imaging services at Bay Area Hospital, “it broke down all the silos. Every department began working together toward the same goal.” The change agent concept, along with a continuous process improvement methodology, proved so successful that it remains an integral part of the planning and implementation process today. Bay Area Hospital decided its best strategy for realizing quick gains was to leverage the use of imaging technology as a migratory step to a fully electronic environment. The first priorities were replacing the radiology and transcription systems and then building all the base-feeder systems (lab, radiology, pharmacy) to create a clinical repository that would add value to physicians and clinicians by providing easy access to online results. “The basic philosophy is that we wanted the medical record populated so there is a reason for them to be there, and their whole workflow works better for them,” says Ben Pfau, vice president of support services and executive sponsor of the EMR project. Order processing and some clinical documentation came next with medication administration checking and additional documentation in progress for a 2008 implementation. Early wins gave the project momentum. The business office trimmed average A/R by four days within six months simply because documents, such as history and physicals and discharge summaries, were readily available to the insurance companies. The ability to view images online, which eliminated the need to track films, resulted in significant productivity gains.

“We saw a four-day drop in our A/R in the first six months.”
Bob Force, Business Office Manager, Bay Area Hospital There is much anecdotal evidence that the EMR strategy has been paying off. Brenda Curtner, registered nurse and clinical informatics coordinator on the Steering Committee says, “We’ve noticed improvements in workflow processes. We know we’re getting fewer requests for information on paper, and we know our quality and risk management folks are using the EMR.” An infection-control nurse reports saving an hour a day because she can more easily track where a patient has been and who he has seen, and no longer has to transcribe information from one report to another. Patient safety gains have been realized as well. If a patient has a reaction to a contrast media, for example, the allergy information is automatically integrated into the EMR, eliminating the potential for human error because the information does not need to be transcribed into a second repository as was previously required. Having immediate access to BUN and creatinine results, important measures of kidney function, prior to giving contrasts has been another big gain since radiologists no longer have to track down the paper chart. Labs drawn in the hospital in the morning are available remotely through the physician’s portal in the practice that afternoon. Everything that happens to a patient in the emergency department, including images, is available remotely in the physician’s office the next morning. The OR is able to do comparative images, while an ICU nurse is able to view images to ensure proper placement of lines. Access to electronic patient information has also streamlined the preoperative process. Dictated progress notes can be available in the EMR within minutes. “Most of our EMR-based patient safety measures have been incremental at this point and that has been our philosophy,” says Pfau. “We have set the foundation, and now we are ready to take on some of the major strategies such as medication delivery and clinical measures.” 

Bay Area Hospital is also taking on the challenge of providing more effective coordinated care outside the hospital walls by working with other providers to develop a community-based health information exchange. This is critical in a pluralistic health system where the average Medicare recipient sees two primary care physicians and five specialists each year in addition to receiving various diagnostic, pharmacy, and other services.4 The number of visits is even greater for Medicare recipients with multiple chronic conditions who may see as many as 16 physicians.4 Safety and quality issues are common because providers often do not have proper referral information, health history, discharge summary, discharge medications, diagnostic test results, or other critical information needed for proper follow-up and care. This project required community stakeholders, all of which are separate entities, to agree upon a unified clinical record that could be shared electronically, thereby eliminating the inefficiencies and risks associated with courier delivery of paper records. The group, led by the hospital, consists of referring clinics, a local independent practice association, and an imaging center. Initial funding to develop the plan was provided through a federal grant that enabled the group to hire a medical director to drive the plan development and conduct a system evaluation. The initial planning phase was completed in 2007, and the group is currently developing a business model for sustained funding. The Steering Committee has attributed Bay Area’s current success to a combination of things including: champions at the leadership level who have helped them stay focused; the change agents and associated process; incremental cultural change to bring end-users on board voluntarily; and a vendor partnership that is sensitive to the needs and limitations of a small hospital. Barriers have been surmountable because of the leadership strength and the top-down commitment to the community and quality care.


Bodenheimer T. “Coordinating Care – A Perilous Journey through the Health Care System.” N Eng J Med. March 6, 2008;358(10):1064-1071. 

On account of certain regional limitations of sales rights and service availability, we cannot guarantee that all products included in this brochure are available through the Siemens sales organization worldwide. Availability and packaging may vary by country and is subject to change without prior notice. Some/All of the features and products described herein may not be available in the United States. The information in this document contains general technical descriptions of specifications and options as well as standard and optional features which do not always have to be present in individual cases. Siemens reserves the right to modify the design, packaging, specifications and options described herein without prior notice. Please contact your local Siemens sales representative for the most current information. Note: Any technical data contained in this document may vary within defined tolerances. Original images always lose a certain amount of detail when reproduced.

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