HPN Leads the Nation in Healthcare Innovation and Progress

by HCE Exchange on April 18, 2016

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In 1979, Richard Merkin, MD, founded the organization that would eventually become Heritage Provider Network.

In its earliest days, HPN lacked the financial and human capital to provide traditional solutions to troubled hospitals and health systems. According to Dr. Merkin, this forced HPN to think differently and to approach problems using nontraditional strategies.

In other words, with over three decades of healthcare experience, Dr. Merkin never does anything the same way twice. He’s always looking for methods and processes that will yield better outcomes from one day to the next.

Pioneering the integrated delivery network

Headquartered in Marina del Rey, Calif., HPN reaches more than 700,000 Californians. That fact alone qualifies it as one of the country’s largest independent practice associations (IPAs). Accounting for its New York branch, which serves more than 70,000 patients, and its Arizona group, which handles Maricopa County’s Medicare Advantage population, the reach of HPN’s integrated delivery network is impactful. All told, 62 group-model clinics and 15 urgent-care centers and IPA structures have been formed across these three states under HPN’s influence.

Long before healthcare reform was implemented, HPN was perfecting an integrated delivery network that was focused on lower costs, higher quality, physician and patient education, and preventive healthcare.

Likewise, HPN also anticipated the industry’s current passion for predictive modeling, and while many efforts are currently focused on establishing models from within the healthcare industry, HPN is seeking solutions from outside the industry.

Networking with other industries

At first, HPN experimented with predictive modeling in-house, but eventually, the organization hit a wall. Fresh eyes were needed, Dr. Merkin said. These challenges demanded experts who would look at healthcare as a data problem, not as a health or healthcare problem.

To find such innovative experts, Dr. Merkin created, developed, and sponsored the two-year, $3-million Heritage Health Prize.

“The health plans felt they already had experts and teams that did this,” Dr. Merkin said. “And it became apparent very quickly that the people that were entering these events were doing it five or six times more accurately than the best of the health plans.”

In 2012, HPN sent out a global call to innovators across all industries, asking them to develop an algorithm capable of predicting the number of days a patient would spend in the hospital over a given year.

“The theory is,” Dr. Merkin said, “if hospitalizations can be predicted, then preventive measures can be taken and unnecessary hospitalizations can be avoided,” possibly to the tune of $40 billion.

HPN received 39,000 entries from 41 different countries. One of the entrants, for example, was a group of astrophysicists whose day jobs involved top-secret work for the federal government.

Even though the contest has ended, Dr. Merkin said HPN is still in touch with these astrophysicists as they rethink their algorithm and continue to develop it into something worthwhile to the healthcare industry.

And that, he added, was the primary advantage of the Heritage Health Prize. Now, when a problem arises, he can turn to an online global community that consists of hundreds of the most effective analysts.

The winning algorithm itself has garnered a great deal of interest from the healthcare industry at large, Dr. Merkin said. “We have had interest from large medical systems and large hospital systems, both for-profit and not-for-profit, that have licensed our technology. This has been professionally satisfying to us, because we are able to help change healthcare, not just for ourselves but for the whole country, by having very large systems begin to use our algorithms and our intellectual property to better provide healthcare to their patients and their members.”

Anticipating the future of healthcare

In 1979, HPN invented the concept of hospitalists. The network introduced interdisciplinary teams, now known as collaborative medicine, in 1982.

This anticipation of the future continues to guide HPN’s myriad endeavors and its persistence in forming alliances with the foremost institutions in the country.

For example, Dr. Merkin established The Richard Merkin Foundation for Stem Cell Research at the Broad Institute at Harvard and MIT. At UCLA, he established The Richard Merkin Foundation for Neural Regeneration, and at the Johns Hopkins Brain Sciences Institute, he implemented The Richard Merkin Initiative. Nearly a decade ago, he endowed the Richard Merkin Distinguished Fellowship in Emergency and Tropical Medicine in the Division of Internal Medicine at the Keck School. On June 30, HPN backed a new professorship at USC for regenerative medicine.

The success of the Heritage Health Prize led HPN to co-sponsor a breast-cancer prize with the National Institute of Health and an open-architectural health prize with UCLA.

HPN recently formed a partnership with Trinity Health System to transform its 83 hospitals from volume-based to value-based. Its work with Trinity is rapidly leading to partnerships with other health systems.

The network’s continued breakthroughs and innovation is largely the result of the culture Dr. Merkin has nurtured.

“We’re very careful about acquiring talent,” he said. “We believe in diversity and getting great talent. Talent then attracts talent.”

Embracing change with an open mind

Dr. Merkin advises healthcare leaders against dismissing seemingly off-the-wall ideas.

“Frequently a breakthrough idea today was a crazy idea yesterday,” he said.

He also urges them to embrace change in an ambitious way. Instead of shooting to be a little bit better than what they are now, shoot to be 10 times better, he said. Yes, you may fail, but the chances are you’ve stretched yourself to such a degree that your organization is now three times better than when you began. This establishes a solid, progressive foundation upon which you can then build.

“Healthcare is attracting people from different industries, and people are finding it intellectually challenging,” Dr. Merkin said. “I believe there’ll be a convergence of technology. I think the world will be different. I think the science will be different. I think the payers may be different. And with the convergence of technology, I think this will improve the quality of healthcare not only for the United States, but for the world.”

-by Pete Fernbaugh

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