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A-2 The Puget Sound Health Alliance: Behind the Scenes of a Big Win

Appendix A-2: Case Study: The Puget Sound Health Alliance-Behind the Scenes of a Big Win

Community quality collaboratives are community-based organizations of multiple stakeholders, including health care providers, purchasers (employers, employer coalitions, Medicaid and others), health plans, and consumer advocacy organizations, that are working together to transform health care at the local level. The Agency for Healthcare Research and Quality offers these organizations many tools to assist in their efforts.


In February 2008, the Puget Sound Health Alliance—a regional multi-stakeholder collaborative serving five counties surrounding Seattle, Washington—released its landmark Community Checkup. This report has been recognized as "the most comprehensive public report ever produced in this region, [and it is] based on data compiled from 14 health plans and self-insured purchasers and reflecting care provided to about 1.6 million people in the five counties."1 Community response to the survey has been overwhelmingly positive. Furthermore, the Alliance received a $50,000 communications grant from the Robert Wood Johnson Foundation to help raise awareness of the report.2

"The public report on health care performance is our most significant initiative," said Margaret Stanley, the executive director of the Alliance at the time the report was produced.3 "This first Community Checkup is really a snapshot of the health care system in Puget Sound. Like the checkups patients have with their doctors, it shows where local health care seems to be healthy, and where it needs some work." The report measures types of care that help to promote better health and reduce the risk of complications and more severe illness, especially for people with chronic conditions such as diabetes, heart disease, and depression."4

About This Case Study

This case study is part of a technical assistance program on sustainability developed by the Agency for Healthcare Research and Quality (AHRQ). The goal of this program is to support Community Quality Collaborative (Community Quality Collaborative) leaders and members in defining strategies that will lead to productive and financially sound collaboratives.

This program explores the intersection of the science of organizational effectiveness—such as models, tools, and proven examples—with the art of collaborative success through passion, creativity, and exploration.

Each of the three case studies highlights a successful collaborative organization, focusing on the leading practices that have enabled that organization to grow and thrive. The case studies were prepared through interviews with staff and stakeholders, review of documents provided by each organization, and online research.

This case study includes the following sections:

  • Overview of the business model.
  • Discussion of leading practices, with examples of their application.
  • Insight into strategies the Puget Sound Health Alliance is pursuing in the next phase of its development.
  • Suggested next steps for Community Quality Collaboratives

This information is also summarized in the Sustainability Program Overview for Community Quality Collaboratives.

Powerful lessons may be learned from looking behind the scenes at the Alliance's Community Checkup, which while it is a significant achievement also presented significant challenges. It highlights the blend of art and science that leads to sustainability.

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The Inside Story

The concept of a broad public report was one of the recommendations of the King County Health Advisory task force that led to the creation of the Puget Sound Health Alliance.5 Although the Alliance had a solid and well-publicized launch, the public reporting effort represented an ambitious undertaking for the new organization.

Leading into these discussions about public reporting, there was healthy skepticism about collaborative efforts. Prior efforts to enact health reform in Washington State in the 1990s had been controversial. In addition, there had been legal action when one health plan in the region began working with a large employer to develop a tiered network based on provider performance. These prior experiences set the initial tone and encouraged the group to be very vigilant in its approach to the process.

Furthermore, stakeholders held differing views about the specifics of a public report card. While employer and consumer representatives were advocates for third-party reporting, health care providers raised concerns about the fairness of the methodology. Balancing all stakeholder views was particularly challenging for the leadership team.

Time also presented a major challenge. Stakeholders agreed that a rigorous methodology and absolute accuracy were essential. At the same time, certain members were impatient for the data and to see published progress. In the end, the report was published several months after the original target date. Yet stakeholders agreed that the right balance had been achieved in bringing a top-quality product to the market in an appropriate timeframe.

According to Alliance board member Jerry Henry, senior advisor to the chairman at Puget Sound Energy, the board recognized the importance of doing this right. He observed that given its collaborative nature, the Alliance may need to be more cautious when compared to a business decision-making process within a single organization. At the same time, he credits the Alliance staff with doing a good job of keeping the diverse group on track.

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Building a Strong Foundation by Responding to the Market

Since its launch in 2004, much has been written about the Puget Sound Health Alliance. The Alliance has been applauded for being the first in its region to bring providers, plans, employers, and consumers to the collaboration table, and for the participation of large employers with commonly recognized brand names. Membership includes more than 50 individuals and 160 organizations representing over 1.5 million covered people in the region.6 The Alliance also was named as the first Value-driven Health Care Community Leader by the U.S. Department of Health and Human Services.

At the same time, the leaders of this solidly funded and respected organization maintain a daily focus on the same central question that will challenge each Community Quality Collaborative: How do we build and maintain staying power so that we can tangibly improve health care in our region?

Quick Facts7

  • Mission: To build a strong leadership alliance among patients, doctors, hospitals, employers, health plans, and others to promote health and improve quality and affordability by reducing overuse, underuse, and misuse of health care services.
  • Launched: 2004.
  • Executive Leadership: Margaret Stanley led the organization through June of 2008. Mary O. McWilliams joined the Alliance in the executive director role on June 23, 2008.
  • Staffing: 10 positions.
  • Region served: Five counties in the Puget Sound region surrounding Seattle.
  • Membership: The board of directors includes representatives from health plans, provider groups, large employers, unions, and government organizations. In addition to board participants, the Alliance embraces more than 160 organizational members.

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Application of Leading Practices

Through the delivery of the Community Checkup and concurrent early development of the organization, the Puget Sound Health Alliance demonstrated leadership in the following practices.

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eDelivering Tangible Value

The Community Checkup provides stakeholders with a tangible, highly valued product. The demand for this information was emphasized in research conducted by the Alliance in 2006. (Go to "Know Your Market" below.) Furthermore, it led to additional funding for the Alliance, underscoring the value of the report to the market.

Know Your Market

In 2006, the Alliance conducted a leading practice survey of stakeholders. Nearly 2,900 individuals responded, representing all stakeholder groups with a particular focus on purchasers, doctors, hospitals, and consumers. An online survey tool combined with selected group meetings and interviews kept the cost low, while providing actionable data.

Key Findings

  • While each stakeholder group had focused requirements, all participants expected collaboration, accountability, and action.
  • Survey responses and more than 500 write-in comments reflected a high degree of consumer interest in the work of the Alliance.
  • 95% of consumers ranked a public report of health care providers as important.
  • Physicians and hospitals sought ways to reduce complexity, duplication, and inconsistency in reporting requirements through technology.
  • In addition to managing costs, employers were very interested in encouraging high value in health care and informed consumer behavior.
  • The survey also identified perceptions and gaps in awareness of the Alliance.

Leading Practice

Through an organized survey approach, the Alliance gained practical insight into the perspectives and expectations of each group, which in turn informs and drives strategic planning, communications, and prioritization of projects.

Maintaining Balance Among Stakeholders

Throughout the development of the report card and in daily activities, leaders of the Alliance have been careful not to take sides. This neutral facilitation role has allowed the Alliance to be successful in building balance and trust among stakeholders.

"The alignment of good intentions creates a strong starting point," said Hugh Straley, vice-chair of the Alliance and medical director of the Group Health Cooperative. At times, controversial opportunities have been ruled out in favor of highly valued but less potentially divisive projects. "We accept that the process is not perfect, but we are looking for that inclusive balance."

Providing Effective Leadership

While excessively controversial issues have the risk of leading to fragmentation, the successful resolution of a high-profile project—such as the Community Checkup—can strengthen the collaborative and provide a platform for other ground-breaking efforts. For example, the Alliance leadership invested significant time and energy into building credibility and trust around this project. This approach included two critical components.

  1. Leaders took a very structured approach to reaching out and listening to the physician community and other stakeholders. Over a period of four months, Alliance leaders met in person with more than 30 groups to discuss the report, in addition to reaching out through e-mail and media coverage.
  2. The leadership deliberately took very detailed issues—such as questions about attribution methods—to the board of directors for deliberation and decisions. At times, discussions at this level of detail were tedious, but this approach provided clear evidence of the group's commitment to accuracy and transparency.

Furthermore, Alliance board member Diane Zahn, secretary-treasurer of the UFCW/Teamsters/Multi-employer Trust, views the Alliance as a trusted forum that is “changing the tone of debate and taking a more mindful approach to solving complex problems.” Prior to the establishment of the Alliance, she witnessed far less conversation about health care quality among the various players, such as labor unions that bargain with employers who then negotiate with health plans.

Communicating Proactively

The Alliance has taken a proactive approach to ensuring that current and potential future stakeholders understand the value delivered and the mission it supports. This is accomplished through a variety of avenues, including a Web site, news coverage, publications, speaking engagements, and informal contacts through the broad networks of the leaders.

For example, when the Alliance was selected as the first Community Leader for Value-driven Health Care, "King County Executive Ron Sims, chair of the Alliance, and Washington Governor Chris Gregoire joined [U.S. Department of Health and Human Services] Secretary Mike Leavitt at the Starbucks Center, where the Secretary made the announcement before a standing-room only crowd of about 150 Northwest business and health care leaders."8

Furthermore, a detailed communications plan has been created from the feedback in the 2006 stakeholder survey.

Note: The Sustainability Program Overview for Community Quality Collaboratives defines seven Leading Practices that are common among successful collaboratives. Each case study highlights a subset of those practices.

For more information, please see the Overview document.

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Business Model Insights

Annual funding for the Puget Sound Health Alliance totaled $2.275 million in 2007.9 Over time, purchasers have consistently contributed the largest share, both in actual dollars and as a percentage of the total funding. Except for the inaugural year, grants have contributed the second largest slice, followed by health plans. These top three categories of contributions total 81 percent of the funding for the Alliance.

While other contributions may be smaller, they are important to the philosophy and work of the Alliance. These contributions make up a very small portion of the total budget, but reflect the Alliance's philosophy of multi-stakeholder collaboration and inclusiveness.

Market-Based Fee Structure

The Puget Sound Health Alliance welcomes members ranging from representatives of large corporations to individual consumers. Everyone pays a fee to participate, ranging from $25 per year for individual consumers to six-figure contributions for large corporations. At one time, providers did not pay a fee, in recognition of the fact that they were doing a lot of work within the Alliance. However, Stanley and other stakeholders believed that all participants should contribute to both the funding and the work effort.

The resulting fee structure is based on the type of organization as well as the size of the organization, and specifies minimum and maximum contributions for each type of participant. Fee categories include:

  • Purchasers - fees based on covered lives.
  • Health Plans - fees based on statewide enrollment.
  • Providers - fees based on full time equivalent staff.
  • Other Organizations - based on a fee schedule.
  • Individuals - flat fee.
Financial Model

The following charts illustrate the Alliance's actual funding from January 2006 through April 2008, and how the total effort of the organization is targeted to very specific goals.

Sources of Funds pie chart showing sources of funds: 43% purchasers, 22% grants, 15% plans, 5% awards and gifts, 3% pharmaceutical companies, 3% TPAs, dental plans, other health networks, 2% interest, 2% other health related organizations. Uses of Funds pie chart noting uses of funds: 60% performance measurement & public reporting, 20% quality improvement & consumer engagement, 11% aligning incentives to achieve desired outcomes, and 9% development & sustainability of the Alliance.

The Alliance's strategic plan lays out a very clear set of priorities, which are weighted relative to each other for a total of 100 points across all activities. This methodology ensures that all stakeholders operate with clear and consistent expectations: Members know what they are agreeing to. It also provides clear guidance to the board and staff when they are making decisions.

This approach reflects the leading practice of rigorous prioritization. An example of the prioritization matrix used by the Alliance is included in the toolbox.

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Life Stages: What's Next for the Puget Sound Health Alliance?

The challenges and opportunities facing each Community Quality Collaborative will vary, depending on its stage of development and the prevailing forces in its local market. The Puget Sound Health Alliance is progressing from a successful early growth phase, into its establishment phase, which requires a different mix of competencies that build on the early foundation.

Diagram showing Life cycle phases. There is a circle of arrows and they are in the following order: Vision, Growth, Establishment, Extension, and Rebooting. The table below provides more detailed information.

Life-Cycle PhaseCommon ActivitiesKey QuestionsDesired Outcomes
  • Defining goals
  • Assessing market forces
  • Recruiting leaders
  • Securing initial funding
  • What are we trying to accomplish?
  • Who will help us get there?
  • Clear goals
  • High energy and engagement
  • Initial funding
  • Demonstrating value
  • Recruiting members
  • Building strategic plans
  • Leveraging and extending funding
  • How will we get there?
  • What do our stakeholders expect?
  • Early “wins” – producing recognizable value
  • Roadmap for growth
  • Committed membership
  • Institutionalizing value
  • Executing plans
  • Retaining members
  • Building infrastructure
  • Are we on track and delivering value?
  • How do we sustain commitment and success?
  • Recognition as a leader and trusted source
  • Sustainable business plan
  • Reliable funding
  • Delivering recognized value
  • Assessing results; benchmarking
  • Adjusting plans and structure
  • What is working or not working?
  • How has the market shifted?
  • Continued demonstration of value and recognition
  • New perspectives
  • New or renewed funding

At times, organizations are challenged by events and circumstances that force significant regrouping and changes, which may be unplanned or outside of a typical life cycle.

  • Responding to significant shifts or negative events
  • What went wrong?
  • How will we adjust and continue?
  • Renewed vision
  • Practical plan of action
  • Retaining critical leaders, members, and funding

In particular, board members and stakeholders are watching carefully to see how the Alliance builds on the success of the Community Checkup report. The next report, which is due to be published in November 2008, will significantly expand on the first effort. The first report showed results from 14 medical groups and 81 clinic locations. The second report will expand to reflect 45 medical groups and more than 200 clinic locations.10

According to Henry, the board is seeing positive progress. This is important because each board participant must prove the business value of belonging to the Alliance to his or her organization. Henry also recognizes that it is a two- to five-year commitment. This is echoed by Straley, who noted that the goals of the Alliance fit well with the quality focus of his health plan organization, and that the total budget of the organization is a very small percentage relative to the total cost of care in the region served.

The various stakeholders strongly agree that the real test is ahead. The proof will be in the Alliance's ability to expand on its foundation by continuing to meet stakeholders' expectations, to bring the lessons learned and leading practices to other initiatives, and to thereby retain existing members, recruit new participants, and mobilize all stakeholders to productive action.

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Next-Stage Strategies

To continue its successful journey as an organization, the Alliance is applying the following strategies:

  • Sustainability, linked with development, as a stated strategic objective: While heavy priority is given to the Alliance's value-added services, the activities required to develop and sustain the organization also receive attention and are appropriately weighted within the strategic plan.
  • Diversity of funding sources: Every participant in the Alliance contributes funding. In the early growth phase, the Alliance leadership has focused on growth both in terms of membership and in funding. The future plans include specified steps to ensure stability, to explore additional sources of funding, and to maximize member dues.
  • Credibility through national recognition: Participating on a national level in organizations such as the AHRQ's Learning Network for Community Quality Collaboratives, National Business Coalition on Health, and the Aligning Forces for Quality program sponsored by the Robert Wood Johnson Foundation, provides visibility, funding, and a platform for growth. These activities will be balanced with the necessary focus on the regional level.
  • Continued 360° communication: The Alliance has demonstrated leading practices in communication, both in listening to a broad spectrum of stakeholders, and in sharing value and information with the market.

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Next Steps to Build Staying Power in Your Community Quality Collaborative

In conclusion, the experience of the Puget Sound Health Alliance provides insight and motivation to help Community Quality Collaboratives develop sustainable strategies. While there is no "silver bullet" that will guarantee success, there are powerful lessons to be learned from organizations that have faced and resolved similar challenges.

As you build strategic plans that emphasize sustainability, your Community Quality Collaborative leadership may find inspiration and practical ideas in the strategies employed by the Puget Sound Health Alliance, including:

  • Diligent Focus on Priorities: Setting a clear course and sticking to it, in order to meet a challenging goal
  • Market Research: Using both structured and informal techniques to really understand the perceptions and expectations of stakeholders.
  • Continuous Communication: Applying diverse strategies from roundtable meetings, to e-mail, to media coverage to ensure that stakeholders are well informed about the mission and activities of the organization.
  • Leveraging Experience: Learning from past efforts, both internal and external, to continue advancing the health care quality mission.

For more information, please go to the two other case studies.

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2 Update to the Community, Puget Sound Health Alliance, April 10, 2008

3 Washington Healthcare News, August 2007





8 Puget Sound Health Alliance press release, January 3, 2007.

9 Financial data provided by the Puget Sound Health Alliance

10 Press release from the Puget Sound Health Alliance, August 21, 2008.

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Page last reviewed January 2009
Internet Citation:   A-2 The Puget Sound Health Alliance: Behind the Scenes of a Big Win: Appendix A-2: Case Study: The Puget Sound Health Alliance-Behind the S. January 2009. Agency for Healthcare Research and Quality, Rockville, MD.


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