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Is the right governance in place?

Is the right governance in place?

Successfully creating coordinated care delivery requires organizations to work together in new and challenging ways. Even when different aspects of the delivery system – primary and secondary care, for example – are integrated in one organization, the clinical and managerial teams will need to collaborate.

Mark Britnell

Global Healthcare Expert, KPMG International; Senior Partner, KPMG in the UK

KPMG in the UK


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Good clinical and organizational governance is vital to coordinated care because the same legal and clinical issues that apply within a single organization now apply across a range of organizations.

For example, most individual healthcare organizations recognize the importance of having strong governance that recognizes the organization’s legal fiduciary duty with regard to the money that it raises and spends. If any organization does not have governance to provide this assurance, the organization fails. If we are creating a set of organizations working across traditional boundaries, that same fiduciary duty applies to the group of organizations as it did to the separate organization in the past.

Not getting the governance right early on is a common cause of failure. The questions that need to be addressed include:

  • Is there agreement about the moral purpose?
  • What are the rules for performance management?
  • What structure of incentives is required – how will risks and rewards be distributed?
  • What is the approach to standardization of data, clinical protocols and ways of working?
  • Who owns the data collected?
  • How are decisions made and how will disagreements be dealt with?

Models of coordinated or integrated care only work if they create a new incentive structure across the entire patient pathway. The incentive structures in place in many health systems today create different incentives for different parts of the system.

For example, a hospital that is remunerated solely for the episodes of care it provides will understandably develop its business model around admitting patients as quickly and efficiently as possible, rather than trying to find alternative, less acute providers who could deliver the same care better.

These systemic incentives also lead to incentive structures within organizations that encourage professionals to focus on doing their part of the pathway, without considering how the local health system as a whole could meet the patients’ needs more effectively and efficiently.

As explored in KPMG International’s publication The more I know, the less I sleep, handovers between healthcare professionals are one of the most common areas where providers fall short of coordinated care.2 New incentive structures will need to take into account their effect on clinical governance and behavior, and support an approach that takes the patient’s whole course of care into account.

In some countries, competition regulators take a keen interest in the move to coordinated care – whether it is the merger of organizations or simply contractual collaboration. Regulators want to see evidence that this is in patients’ interests, even in less regulated markets, challenging yourself to demonstrate this direction is a good discipline for patients.

A central lesson is to ensure that the governance group is clear about the moral purpose of the work. Those in charge have to communicate this successfully to the front line staff. This is most powerful when expressed in terms of patient and community benefit. Without this narrative, it is easy for large-scale transformations to ‘run into the sand’.


Case study: US – CMO to ACO: Bronx Accountable Care Organization

Over the last decade Montefiore has developed from a Contract Management Organization (CMO) as a for-profit subsidiary of Montefiore Medical Center, to becoming the Bronx Accountable Care Organization1.

It is the largest healthcare provider in the Bronx, New York’s poorest borough. Originally as a CMO, it had an annual budget of US$850 million which equated to 90 percent of all the insurance premiums paid by patients. Its objective when it was a CMO remains unchanged: to keep people as healthy as possible and out of hospital. In addition to telemonitoring, their toolkit includes self-education and group classes; home visits and post-discharge outreach; palliative care and coordination of primary care providers, specialists, pharmacists social workers; and any other resources required to maintain optimal health and functioning.

For its 30,000 patients with largest needs the CMO carried out utilization reviews to ensure any hospital stay is essential and does not last longer than necessary. The nurses who carry out that review are often based in the hospital and can see first-hand what is going on with the patient. For the next ‘tier’ of people with chronic illness – the functional chronically ill – the CMO provided both education and occasional interventions to prevent their conditions from exacerbating.

Montefiore Medical Centre and all its outpatient departments have an electronic patient record, which ensures all clinicians have access to the same information. Through these interactions with Montefiore’s patient population – monitoring, coordination, education, patient outreach – the previous CMO became the nucleus of the Bronx Accountable Care Organization.


  • Diabetes admissions decline by 13 percent in 4 years
  • Diabetes 30-day readmissions decline by 11 percent in 4 years
  • Effective management of diabetes has led to a 12 percent reduction in costs


1Adapted from ‘On the Cutting Edge of Accountable Care’ (2012); and outcome figures from slide show by Stephan Rosenthal, COO, Montefiore Contract are Management

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