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DEFINITIVE STUDY ON INTEGRATED DELIVERY SYSTEMS SHOWS DRAMATIC HEALTHCARE INDUSTRY SHIFT

 CHICAGO, Sept. 9 /PRNewswire/ -- Integrated delivery systems -- a joint effort of hospitals and physician groups -- will become the standard in healthcare delivery by the turn of the century, according to a definitive study of hi?tals, multihospital systems and medical group practices issued today.
 The survey, the first, most comprehensive of its kind, was conducted by Witt/Kieffer, Ford, Hadelman & Lloyd, a top 10 executive search firm with the nation's largest healthcare practice.
 Of the organizations surveyed, 56.9 percent of hospitals, 76.8 percent of multihospital systems and 45.2 percent of medical group practices have an integrated delivery system in place or will within 12 months.
 "This is a stunning snapshot of the nation's evolving healthcare delivery system," said Michael C. Kieffer, chairman of Witt/Kieffer. "Clearly, the healthcare industry is not waiting for the president's task force to implement practical reform of our current delivery system."
 Anticipation of healthcare reform is the main reason hospitals and medical group practices say they are developing an integrated structure, and the second reason given by multihospital systems. Hospital systems cited positioning their organization for contracting as the main reason for developing an integrated delivery system.
 "The healthcare industry is out in front of the government and in step with the needs of consumers," said Fred L. Brown, president and CEO of Barnes-Jewish, Inc.-Christian Health Services, who is overseeing one of the largest and most recent systems integration projects in the country, in St. Louis. Brown added, "Employers are demanding that their healthcare costs be controlled, and providers can best meet that demand through integrated delivery systems."
 The most likely integrated system model to be used by hospitals, multihospital systems and medical group practices is a Physician Hospital Organization, 46.3 percent, 46.4 percent and 29.8 percent, respectively. Management Services Organization and Integrated Provider Organization models are also currently being used or are likely to be used by all three.
 Even though movement toward integrated delivery systems is a relatively recent phenomenon, a substantial amount of capital has been spent on developmental and/or pre-operating systems activities over the last two years. On average, hospitals have spent more than $470,000; multihospital systems, more than $1.4 million and medical practice groups more than $690,000.
 When asked if the organization's integration activities were meeting their expectations, the majority of respondents said it was too early to tell. However, approximately one-third of hospitals, multihospital systems and medical group practices did say that integration activities were meeting their expectations, 27.6 percent, 32.7 percent and 26.8 percent, respectively.
 Interestingly, a primary piece of advice each of the organizations would have for others considering integration is to obtain key physician/medical staff support for the plan early on. Indeed, physician fear or resistance to developing an integrated system was cited as the primary difficulty all three types of organizations have or are facing.
 "The Clinton administration has had a definitive affect on the integrated systems movement," Kieffer noted. "It appears that those organizations that do not develop some form of integrated delivery system will be left standing on the sidelines."
 An overall survey response rate of 22 percent was achieved, with a total of 137 hospitals, 56 multihospital systems and 135 group practices, responding. The survey was distributed to hospital presidents, multihospital systems chief executive officers and group practice administrators.
 Witt/Kieffer, Ford, Hadelman & Lloyd is a top 10 executive search firm operating out of five regional offices, in addition to its Oak Brook, Ill., headquarters. The firm completed 380 search assignments in 1992, accounting for $11 million in revenues.
 -0- 9/9/93
 /CONTACT: Michael Kieffer for Witt/Kieffer, 708-990-1370, or Julie Jacobs, 312-836-7295/


CO: Witt/Kieffer, ford, Hadelman & Lloyd ST: Illinois IN: HEA SU:

TW -- NY049 -- 0334 09/09/93 12:40 EDT
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Date:Sep 9, 1993
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