CEO Notes

John Murphy, MD, President and CEO, WCHN

An exciting year indeed

As we approach the year-end, I want to thank you for everything you do for our patients, hospitals and communities.

This has been an exciting year for WCHN, from welcoming our Norwalk Hospital colleagues into the network to cutting the ribbon on the transforming Buck Pavilion and uniting New Milford and Danbury Hospitals under a single license. And, thanks to the work of our 21 integration teams, we saved some $6 million during the year by sharing best practices, standardizing care, driving service line growth and maximizing operational efficiencies.

We continue to grow across the network. Construction is on schedule to open Norwalk’s new McGraw Center in January and New Milford’s new Arnhold Emergency Department in April.

We welcomed 38 physicians, 29 advanced practice professionals and four practices to our expanding provider network. And we continued to redefine what we achieve when we work with other providers as partners in health.

In the last edition of DOC-Line, I introduced the Value Care Alliance (VCA), a collaboration of hospitals and physicians working together to provide efficient, coordinated, high-quality care for the communities we serve. The VCA will provide value to both patients and payers. The VCA demonstrates what providers can achieve together when we create better ways to care. Leading such an innovative effort supports our fundamental mission to better serve the people who rely on us every day.

The VCA is the largest collaboration of independent healthcare providers in Connecticut. Our seven member hospitals – covering most of the state geographically - serve some 1.3 million people. Current participants include Griffin Hospital (Derby), Lawrence + Memorial Hospital (New London), Middlesex Hospital (Middletown), St. Vincent’s Medical Center (Bridgeport), and WCHN. Together the VCA hospitals employ more than 11,000 people, align with more than 2,000 physicians, and will end the year with some 90,000 inpatient admissions.

But this is not an affiliation. While we work together, each member hospital maintains its local governance and control. Working together enables us to maximize the care we each deliver locally as we reduce costs by pursuing shared services, including reference labs, blood products and malpractice captives. By collaborating in this practical way, member hospitals are better positioned to shift from volume-based to value-based care, and to manage population health by 2016.

To attract payers to this new approach, the Alliance will work to create select networks and tiered insurance products that will offer lower costs to employers and employees than conventional insurance products. A patient will pay lower premium and out-of-pocket payments in exchange for choosing a lower cost VCA member hospital - and its affiliated physicians - over a higher cost medical center. This arrangement offers competitive advantage to federal and state governments, municipalities, businesses and residents. For member hospitals, VCA provides a strategy to expand market share and drive the revenue growth needed to sustain our mission. The VCA is now negotiating with a major payer interested in our approach. Securing this first contract will be a significant win for the VCA, for WCHN and, most importantly, for the communities in our state. Assuming we are able to agree on final terms, we expect other payers to follow.

Other VCA initiatives include completing an agreement with a strategic physicians’ organization and continually assessing strategies to ensure optimal market coverage.

A single VCA governing board will include three seats for each hospital; one for the CEO and two for physicians. Physician leadership is essential in our vision. By year-end, the Alliance will complete the physician Board assignments, a strategic plan, a budget for 2015 and a communications strategy. I will let you know how the venture continues to progress. In the meantime, let me know what you think, and any questions you have.

Every day, as I look ahead, I am aware that the reason I face the future with such confidence is because you. You and our dedicated staff provide the caring hard work that enables us to see a bright and exciting future.

Best wishes to you and your family for a wonderful holiday season.

John