First, a note of sincere thanks to my colleague Dan Dunlop who, in his blog, recently offered far kinder words than I deserve for my sporadic efforts here at hcpropellerheads. To quote Hamlet’s Polonious, “Brevity is the soul of wit,” and Dan’s daily shots of idea-juice show he is a man of concentrated wit (and, possibly, reveal the “witless” nature of my long rambles…) with considerable chops to spark intense, thoughtful discussion. Thank you Dan for introducing your fans to this little project. I hope some of you find it intriguing and helpful.
I spent a lot of last week on airplanes and had the chance to catch up on some reading. One article I found particularly interesting appeared in a supplement to Health Affairs. The entire supplement is dedicated to “Value in Health Care” with some impressive minds providing interesting perspectives on the ubiquitous concept of “value.”
In, “Building Organizational Capacity: A Cornerstone of Health System Reform,” Janet Corrigan and Dwight McNeill from the National Quality Forum posit, “achieving higher levels of performance requires organizational capacity, including information technology and specialized expertise, not present in most settings.” While I could certainly go after this set-up (not today) I’d rather focus on a potentially inflammatory notion they put forth:
“[T]he health sector lacks the ability to bring these innovations [in quality of care systems] to scale; best practices in care delivery may take years, if not decades, to spread throughout an institution, much less the nation. Moreover, what we have not seen is fundamental reform in the delivery system aimed at the development of new organizational models capable of consistently providing effective, safe, and efficient care across each entire patient-focused episode.”
Now, fairly, Corrigan and McNeill can cite studies, like those spotlighted in Modern Healthcare recently, that suggest, despite decades of work, the delivery system struggles to make meaningful gains in quality and efficiency.
Before I proceed, a moment of full disclosure. The Joint Commission is a client of SPM’s and a client with whose work I am intimately involved. And, to quote the old adage, “where you stand depends on where you sit,” I also acknowledge that NQF, the Leapfrog Group, HealthGrades (authors of the two reports cited in the Modern Healthcare article) and The Joint Commission, all have biases and agendas that fuel their respective assertions. I get that. It’s out on the table, admitted. Now, let’s move on.
I have two points to make today. The first is, to say that broad, national progress on key measures of patient safety, quality and efficacy have not been realized and can’t be realized on a broad scale is simply not true. On The Joint Commission’s website you can view the 2008 Report on Quality and Safety. There you’ll see, perhaps self-servingly, that Joint Commission accredited hospitals deliver evidence-based treatment of heart attack 96% of the time – up from 87% in 2002. Further, with many National Patient Safety Goals, such as accurate patient identification, “read-backs” of orders and test results, reducing falls, and implementing the universal protocol, average national performance at Joint Commission accredited hospitals exceeds 95%.
Admittedly, The Joint Commission is an organization that has room for improvement. There is considerable debate about standards and how things like the universal protocol were developed and deployed. True. Fix it. But, to claim that little progress has been made, and that the system is incapable of making leading practice common practice nationwide is pure hyperbole. In my own, biased, opinion I believe The Joint Commission, for all its warts, has been and will continue to be the best catalyst for health system improvements in safety, quality and efficiency.
But, that’s not even my primary point for today. My second concern involves hospital/health system strategic planning and the right role of clinical improvement. Recently I was reviewing a hospital strategic plan for a fairly large (> 500 bed) institution. This particular plan, at first, reinforced a belief of mine that hospital strategic plans typically don’t get much beyond being budget justifications. This plan is much better than most (it included actual decisions on priorities) and, to be fair, acts like a business development plan more than a strategic plan. It outlines programs of excellence, investment, delivery system strategy and criteria for evaluating the future mix of services and programs (all things I love to see in a plan).
However, for all its specificity around target markets, services, programs and capabilities, the discussion around quality was vague. The plan calls for investment in IT and EMR as tools to aiding improvement, the development of new platforms to take a non-siloed approach to quality and patient safety improvement and greater transparency/accountability. Above I said, “at first” because my initial reaction was to be disappointed by the light treatment the issue of clinical practice of medicine received; especially when I read further on that attaining market leadership in patient safety, clinical and service quality are seen as key forces for market differentiation.
What I instinctively wanted to see was a conversation about things like Core Measures, National Patient Safety Goals, demonstrated best practices, evidence based medicine, etc. I later realized that, perhaps, the most important next step for this institution may be organizing better to attack specifics such as this. So, I cut them some slack.
However, that did fuel a question – should we expect/hope to see greater specificity in hospital/health system strategic plans around their pathway to clinical improvement? Just two weeks ago, providers promised the President they could shave $2 trillion over 10 years. “The crux of the plan is to merge more streamlined care and a focus on quality and efficiency with “common sense improvements.” One tenet urges the better coordination of care and adherence to evidence-based best practices. Another calls for better use of health information technology. The groups have wagered that such changes can greatly cut how much is spent each year on healthcare.”
I imagine proceeding down such a pathway – rightly – will require engaging a hospital’s medical and clinical staff in a way they have not before. It’s one thing to pay lip service to quality improvement in a strategic plan and then leave it to task forces and work groups to muddle through sufficiently to meet accreditation and payer standards. But to see actual, planned quality improvement, the kind places like Geisinger [full disclosure part II, also an SPM client] have been recognized for, is for my skeptical mind, a leap. Don’t get me wrong, I believe business development and strategic clinical quality improvement (and marketing communications strategy and brand development) all can and should walk hand in hand.
Are hospital leaders up to the task?
Tuesday, May 26, 2009
Tuesday, May 19, 2009
Everybody Pays
I just finished reading the Senate Finance Committee’s “Financing Comprehensive Health Care Reform: Proposed Health System Savings and Revenue Options.” It’s an interesting document (from a Propellerhead perspective) in that it provides a fairly comprehensive-yet-understandable look into the confusing mosaic of America’s health-related financing and regulatory system. It was a sobering illustration of how complicated life in big systems of humans can become.
The key take away for me was the size of the bulls-eye on the back of employer sponsored health insurance. A table on page 5 identifies “Exclusion of employer sponsored health care (income)" as representing $132.7 billion of a possible $194.2 billion in annual “lost revenue” for the Federal coffers. For reference, #2 item on the list is “Exclusion of Medicare benefits from income” that total $40.6 billion. You don’t need an advanced degree in applied mathematical theory or public policy to guess what has the pols’ attention when it comes to paying for expanding coverage (and buoying a soon-to-be-bankrupt Medicare Inpatient Trust Fund).
Yes, your memory serves you correctly. President Obama did take Senator McCain to task during the campaign for basing his health reform program on this very principle. During the last debate, Senator Obama referred to such an approach as a new tax on working Americans.
Now, the Senate Finance Committee paper proposes that a progressive approach be taken, only categorizing this benefit as incremental income for people earning $200,000 or above, phasing in the full incremental tax at some yet-unspoken salary level north of $200,000.
[Sidebar for a second…the Administration’s previous conversations around tax rates have targeted people earning $250,000+. Now the bar seems to have quietly slipped down $50,000. Does this represent an alarming trend?]
The compounding factor here lies in the discussion from earlier on the principles of expanding coverage. In a “pay or play” model such as the one the Committee has thrown around, employers will be “fined” for not offering benefits. So…everyone has to have coverage, and that coverage will likely be taxed one way or another. That’s an interesting double whammy (or triple whammy – if you consider the fine for not providing benefits a de-facto tax on employers).
There is also disturbing language in the report that, in essence, suggests providers might earn too much through programs like IME, GME, DSH and mechanical issues like market basket updates to base payment rates. While certainly these formulas have evolved to level of complexity that makes the IRS tax code seem simple, there are surely legitimate opportunities to refine and tighten the programs. The underlying suggestion that providers might be earning too much – the document singles out home health agencies – is scary.
The AHA has released its most recent batch of comments on the Senate Finance Committee’s policy ideas – with cautionary words regarding how much savings are truly possible through delivery system reform in the short term, identifying possible winners and losers along the way. The AHA is providing thoughtful, sound advice.
Essentially, in two words, “Slow Down.”
But alas, it seems the bull is in the china shop. We’re going to have one heck of an aftermath to figure out.
The key take away for me was the size of the bulls-eye on the back of employer sponsored health insurance. A table on page 5 identifies “Exclusion of employer sponsored health care (income)" as representing $132.7 billion of a possible $194.2 billion in annual “lost revenue” for the Federal coffers. For reference, #2 item on the list is “Exclusion of Medicare benefits from income” that total $40.6 billion. You don’t need an advanced degree in applied mathematical theory or public policy to guess what has the pols’ attention when it comes to paying for expanding coverage (and buoying a soon-to-be-bankrupt Medicare Inpatient Trust Fund).
Yes, your memory serves you correctly. President Obama did take Senator McCain to task during the campaign for basing his health reform program on this very principle. During the last debate, Senator Obama referred to such an approach as a new tax on working Americans.
Now, the Senate Finance Committee paper proposes that a progressive approach be taken, only categorizing this benefit as incremental income for people earning $200,000 or above, phasing in the full incremental tax at some yet-unspoken salary level north of $200,000.
[Sidebar for a second…the Administration’s previous conversations around tax rates have targeted people earning $250,000+. Now the bar seems to have quietly slipped down $50,000. Does this represent an alarming trend?]
The compounding factor here lies in the discussion from earlier on the principles of expanding coverage. In a “pay or play” model such as the one the Committee has thrown around, employers will be “fined” for not offering benefits. So…everyone has to have coverage, and that coverage will likely be taxed one way or another. That’s an interesting double whammy (or triple whammy – if you consider the fine for not providing benefits a de-facto tax on employers).
There is also disturbing language in the report that, in essence, suggests providers might earn too much through programs like IME, GME, DSH and mechanical issues like market basket updates to base payment rates. While certainly these formulas have evolved to level of complexity that makes the IRS tax code seem simple, there are surely legitimate opportunities to refine and tighten the programs. The underlying suggestion that providers might be earning too much – the document singles out home health agencies – is scary.
The AHA has released its most recent batch of comments on the Senate Finance Committee’s policy ideas – with cautionary words regarding how much savings are truly possible through delivery system reform in the short term, identifying possible winners and losers along the way. The AHA is providing thoughtful, sound advice.
Essentially, in two words, “Slow Down.”
But alas, it seems the bull is in the china shop. We’re going to have one heck of an aftermath to figure out.
Friday, April 24, 2009
Not So Fast (Part I)
While it might not be the “Harry and Louise” full-frontal assault that battered the Clinton administration efforts on system reform, smart, measured resistance to the Obama Principles of Reform are bubbling up all around. To his credit, the President has prescribed an open process, with very public dialog; one suspects the goal is both to avoid the aura of secrecy that clouded the Clinton effort and actually hear from the industry’s best and brightest to leverage their thinking.
A third goal, I suspect, was to amass public support from the same best and brightest as a way of selling the Administration’s vision for the future of the American health system. Seems a funny thing happened on the way to the group hug…people are presenting reasoned, polite dissent. The Administration isn’t getting the, “you’ve got it right” stamp of approval it might have hoped for from the field.
Two instances this week were particularly interesting. First, on Tuesday research appeared on Health Affairs’ website posting the question, “Will Americans Support the Individual Mandate?” This study aimed to assess if an individual mandate, on its own, similar to the Massachusetts plan, could have wide public support, or if something more faceted would be politically necessary.
Respondents to the study’s survey were asked their opinions on two different approaches, the “stand-alone mandate” and a “shared-responsibility plan” each described as follows:
Stand-Alone Mandate: "This proposal would require all Americans to have insurance. Most people would still get insurance through their work. People who don't get insurance from work would have to buy it themselves, or pay a fine if they don't. People with lower incomes would get help from the government paying the cost of health insurance."
Shared-Responsibility Plan: "This proposal would place requirements on individuals, employers, the government, and insurance companies so that everyone shares in the responsibility. Individuals who don't already have insurance would be required to buy it or pay a fine, with financial help from the government for people with lower incomes. Employers would be required to cover their workers, or pay money into a pool that helps people buy insurance. Government health insurance programs would be expanded. Insurance plans would be required to take anyone who applies, even if they have a prior illness."
The stand-alone plan is an easier platform on which to campaign; it doesn’t take a lengthy explanation to get across and the principle is simple. While the President didn’t/hasn’t come down firmly in this camp (he supported a mandate for children, while Hillary Clinton went for the full mandate), he has expressed an openness to it.
The noise out of DC and the trial balloons being floated from Congresses work groups suggest the task forces are leaning more toward a “shared-responsibility” model [and what a great name! Who could be against a concept like shared responsibility?]. This study seems to think this is a politically viable course of action.
Essentially, “48 percent of the public supported the stand-alone individual mandate. It was not as popular as some incremental approaches to partially covering the uninsured population (assessed in another recent Kaiser Family Foundation survey), such as expanding state government programs for low-income people (72 percent) and offering businesses incentives to insure their employees (79 percent). It was slightly more popular than a single-payer government plan financed through taxes (44 percent).”
“A shared-responsibility plan was more popular than the stand-alone mandate in 2008. Fifty-nine percent of the public supported it, compared to the 48 percent who supported the stand-alone mandate. All groups, regardless of political affiliation, income, race, age, and education, were more supportive of the shared-responsibility plan than the stand-alone mandate, except the Hispanic/other race subgroup, which appeared to be indifferent about which of the two options was better.”
This all sounds encouraging, until you hit this sentence: “’shared-responsibility’ enjoyed majority support among every measured subgroup except Republicans (44 percent), respondents over age sixty-five (50 percent), and college-educated people (50 percent).” Huh? That sent my radar buzzing. One of our two major political parties, one of our largest voting blocks (and the largest healthcare consuming demographic, and the “elite” class the President is supposed to represent. Support really drops off when you talk to wage earners garnering between $80,000 - $100,000.
If support for even the better approach is wanting among these significant groups, does that suggest that neither idea is very well-liked? The reasons given for not supporting any form of mandate are predictable and reveal fundamental disagreements on the government’s right role in healthcare; the belief that either approach “would lead to government-run health care or higher taxes, or both. The Democrats who opposed the plans were significantly more likely than the Republicans to say that these reform options were the wrong approach because a single government health plan was needed. Republicans and Democrats also disagreed on the issue of the individual mandate itself. A higher percentage of Republican opponents than Democratic opponents disagreed with the principle of government requiring people to buy insurance. More Democrats than Republicans opposed mandates because they thought that people might not be able to afford the insurance they were being required to purchase.”
Jeff Goldsmith posed the question, especially in this economy, where is the money to fund any of this going to come from? Even if you favor the “shared-responsibility” approach, Mr. Goldsmith points out, “mandating that employers offer health insurance to their workers if they do not already do so is, in effect, taxing them. Those that do not play would be asked explicitly to pay an equivalent amount (6-8% of payroll?) to a fund that would help finance those not covered by employer plans.”
“The president recently reaffirmed his support for the so-called Employee Free Choice Act, which would also increase employment costs by rapidly accelerating unionization. How you can heap these two economic burdens on employers, which are laying off 650,000 workers a month, and expect to get back to 7.9% unemployment next year or even the year after, beggars the imagination.”
This was the most sobering cry in the wilderness yet. While those who support either mandate do so most often on the basis of moral principle – it’s the right thing to do. I can’t imagine how job #1, re-energizing the economy, can take a back seat to some halcyon moral imperative.
Then, there’s the advice – FINALLY – that this whole debate is focusing on the wrong problem. But that’s a topic for next week.
A third goal, I suspect, was to amass public support from the same best and brightest as a way of selling the Administration’s vision for the future of the American health system. Seems a funny thing happened on the way to the group hug…people are presenting reasoned, polite dissent. The Administration isn’t getting the, “you’ve got it right” stamp of approval it might have hoped for from the field.
Two instances this week were particularly interesting. First, on Tuesday research appeared on Health Affairs’ website posting the question, “Will Americans Support the Individual Mandate?” This study aimed to assess if an individual mandate, on its own, similar to the Massachusetts plan, could have wide public support, or if something more faceted would be politically necessary.
Respondents to the study’s survey were asked their opinions on two different approaches, the “stand-alone mandate” and a “shared-responsibility plan” each described as follows:
Stand-Alone Mandate: "This proposal would require all Americans to have insurance. Most people would still get insurance through their work. People who don't get insurance from work would have to buy it themselves, or pay a fine if they don't. People with lower incomes would get help from the government paying the cost of health insurance."
Shared-Responsibility Plan: "This proposal would place requirements on individuals, employers, the government, and insurance companies so that everyone shares in the responsibility. Individuals who don't already have insurance would be required to buy it or pay a fine, with financial help from the government for people with lower incomes. Employers would be required to cover their workers, or pay money into a pool that helps people buy insurance. Government health insurance programs would be expanded. Insurance plans would be required to take anyone who applies, even if they have a prior illness."
The stand-alone plan is an easier platform on which to campaign; it doesn’t take a lengthy explanation to get across and the principle is simple. While the President didn’t/hasn’t come down firmly in this camp (he supported a mandate for children, while Hillary Clinton went for the full mandate), he has expressed an openness to it.
The noise out of DC and the trial balloons being floated from Congresses work groups suggest the task forces are leaning more toward a “shared-responsibility” model [and what a great name! Who could be against a concept like shared responsibility?]. This study seems to think this is a politically viable course of action.
Essentially, “48 percent of the public supported the stand-alone individual mandate. It was not as popular as some incremental approaches to partially covering the uninsured population (assessed in another recent Kaiser Family Foundation survey), such as expanding state government programs for low-income people (72 percent) and offering businesses incentives to insure their employees (79 percent). It was slightly more popular than a single-payer government plan financed through taxes (44 percent).”
“A shared-responsibility plan was more popular than the stand-alone mandate in 2008. Fifty-nine percent of the public supported it, compared to the 48 percent who supported the stand-alone mandate. All groups, regardless of political affiliation, income, race, age, and education, were more supportive of the shared-responsibility plan than the stand-alone mandate, except the Hispanic/other race subgroup, which appeared to be indifferent about which of the two options was better.”
This all sounds encouraging, until you hit this sentence: “’shared-responsibility’ enjoyed majority support among every measured subgroup except Republicans (44 percent), respondents over age sixty-five (50 percent), and college-educated people (50 percent).” Huh? That sent my radar buzzing. One of our two major political parties, one of our largest voting blocks (and the largest healthcare consuming demographic, and the “elite” class the President is supposed to represent. Support really drops off when you talk to wage earners garnering between $80,000 - $100,000.
If support for even the better approach is wanting among these significant groups, does that suggest that neither idea is very well-liked? The reasons given for not supporting any form of mandate are predictable and reveal fundamental disagreements on the government’s right role in healthcare; the belief that either approach “would lead to government-run health care or higher taxes, or both. The Democrats who opposed the plans were significantly more likely than the Republicans to say that these reform options were the wrong approach because a single government health plan was needed. Republicans and Democrats also disagreed on the issue of the individual mandate itself. A higher percentage of Republican opponents than Democratic opponents disagreed with the principle of government requiring people to buy insurance. More Democrats than Republicans opposed mandates because they thought that people might not be able to afford the insurance they were being required to purchase.”
Jeff Goldsmith posed the question, especially in this economy, where is the money to fund any of this going to come from? Even if you favor the “shared-responsibility” approach, Mr. Goldsmith points out, “mandating that employers offer health insurance to their workers if they do not already do so is, in effect, taxing them. Those that do not play would be asked explicitly to pay an equivalent amount (6-8% of payroll?) to a fund that would help finance those not covered by employer plans.”
“The president recently reaffirmed his support for the so-called Employee Free Choice Act, which would also increase employment costs by rapidly accelerating unionization. How you can heap these two economic burdens on employers, which are laying off 650,000 workers a month, and expect to get back to 7.9% unemployment next year or even the year after, beggars the imagination.”
This was the most sobering cry in the wilderness yet. While those who support either mandate do so most often on the basis of moral principle – it’s the right thing to do. I can’t imagine how job #1, re-energizing the economy, can take a back seat to some halcyon moral imperative.
Then, there’s the advice – FINALLY – that this whole debate is focusing on the wrong problem. But that’s a topic for next week.
Wednesday, April 15, 2009
Healthcare Wisdom from 'Dancing with the Stars'
Well, something’s gonna happen.
On April 9, 2009, President Obama made it official: there is a new White House Office of Health Reform. Through an executive order President Obama assigned the task of pressing his goal of expanding and improving health coverage in America.
Then, just yesterday, Dora Hughes, HHS’ counselor for public health and science, said during the 6th Annual World Health Care Congress in Washington, that the administration remains optimistic that Congress will able to produce a bipartisan healthcare reform bill by the end of August.
The hope is that Congress will make a good-faith effort to reflect the President’s eight principles for reform: protect families’ financial health; make healthcare coverage affordable; cover all Americans; provide portability of coverage; guarantee choice; invest in prevention and wellness; improve patient safety and quality care; and maintain long-term fiscal sustainability.
Monday night on 'Dancing with the Stars,' Judge Len Goodman remarked, "just because you're moving doesn't mean you'rE dancing." There might be a parallel. Just because you're fiddling with health, it doesn't mean you're fixing anything.
Sunday’s New York Times reported former Missouri congressman Dick Gephardt is suggesting the administration and Congress “Think Smaller. Seek Less. Don’t Fail.” According to the Times, “now Mr. Gephardt says universal or near-universal coverage cannot pass this year — and he is urging the White House to defer that goal until it enacts cost-saving reforms in health care delivery.”
And I have to believe Mr. Gephardt is imagining real savings beyond the phantoms of “efficiencies” to be derived from expanded health IT.
Further on in the NYT article, “Representative Ron Kind, a Wisconsin Democrat who serves on the Ways and Means Committee, insists that Congress must address cost and coverage “on parallel tracks.” Indeed, Mr. Kind sees savings from “system delivery reform,” like improved approaches to preventive care and treatment of chronic diseases, as the way to pay for expanded coverage.”
Therein lies the rub of healthcare (and not health system reform): the divergent but intertwined challenges of cost and coverage.
Re-reading the President’s eight principles, the focus is populist, clearly aimed at coverage over cost. The insiders would direct us to “invest in prevention and wellness; improve patient safety and quality of care; and maintain long-term fiscal sustainability” as proof of commitment to the “cost” side of the ledger. Sounds like shadow boxing to me.
Months ago I agreed with Jeff Goldsmith who urged, essentially, raging incrementalism. Go slow. Try things. Fix things. Go for the prize (i.e., universal coverage) with success under your belt. It would seem to me the smart pathway to reform would be strategic demonstrations, testing different health system reforms to see which work best. Transferring knowledge and best practices is working in medicine, why abandon it in system reform with an all-or-nothing bet?
The dumb guy question I often ask (and receive blank stares in response) is, “how will universal coverage reduce the burden of the Medicare program on the Federal budget?” Not to be redundant, but it is the “$34 trillion problem.” Sometime soon (e.g., in the President’s first term), Fortune Magazine reports, “Medicare Part A will go cash-flow-negative.” What it will take to stabilize Payer #1 could completely swamp the best intentions of universal coverage advocates.
Monday’s conversation of ACO’s is an interesting first step. Some contend that, beyond Geisinger, Mayo and Kaiser system reforms imagined by The Commonwealth Fund are not doable? Why? Presumably, because their integrated structure is unique and not replicable. Un-integrated entities are not organized or capable of actually profiting on lower reimbursements driven by improved efficiency and outcomes.
Again, I say bully to that. Why can’t the system be reformed before the financing system is thrown into a blender (OK, or at least at a similarly measured, insulated pace)?
Now, the Times article suggests the motivation is *gasp* political. System reforms will be glacial, certainly longer than election cycles can tolerate. Can a candidate run on the success of demonstration projects and incremental learning? No. Universal coverage can happen by matter of fiat, the single stroke of a pen. Then you can stump on accomplishing the long dreamed of ideal of many great Americans. Otherwise, will voters might just wonder, “what exactly did you do?”
How about, “we simply saved the American economy for generations to come”?
On April 9, 2009, President Obama made it official: there is a new White House Office of Health Reform. Through an executive order President Obama assigned the task of pressing his goal of expanding and improving health coverage in America.
Then, just yesterday, Dora Hughes, HHS’ counselor for public health and science, said during the 6th Annual World Health Care Congress in Washington, that the administration remains optimistic that Congress will able to produce a bipartisan healthcare reform bill by the end of August.
The hope is that Congress will make a good-faith effort to reflect the President’s eight principles for reform: protect families’ financial health; make healthcare coverage affordable; cover all Americans; provide portability of coverage; guarantee choice; invest in prevention and wellness; improve patient safety and quality care; and maintain long-term fiscal sustainability.
Monday night on 'Dancing with the Stars,' Judge Len Goodman remarked, "just because you're moving doesn't mean you'rE dancing." There might be a parallel. Just because you're fiddling with health, it doesn't mean you're fixing anything.
Sunday’s New York Times reported former Missouri congressman Dick Gephardt is suggesting the administration and Congress “Think Smaller. Seek Less. Don’t Fail.” According to the Times, “now Mr. Gephardt says universal or near-universal coverage cannot pass this year — and he is urging the White House to defer that goal until it enacts cost-saving reforms in health care delivery.”
And I have to believe Mr. Gephardt is imagining real savings beyond the phantoms of “efficiencies” to be derived from expanded health IT.
Further on in the NYT article, “Representative Ron Kind, a Wisconsin Democrat who serves on the Ways and Means Committee, insists that Congress must address cost and coverage “on parallel tracks.” Indeed, Mr. Kind sees savings from “system delivery reform,” like improved approaches to preventive care and treatment of chronic diseases, as the way to pay for expanded coverage.”
Therein lies the rub of healthcare (and not health system reform): the divergent but intertwined challenges of cost and coverage.
Re-reading the President’s eight principles, the focus is populist, clearly aimed at coverage over cost. The insiders would direct us to “invest in prevention and wellness; improve patient safety and quality of care; and maintain long-term fiscal sustainability” as proof of commitment to the “cost” side of the ledger. Sounds like shadow boxing to me.
Months ago I agreed with Jeff Goldsmith who urged, essentially, raging incrementalism. Go slow. Try things. Fix things. Go for the prize (i.e., universal coverage) with success under your belt. It would seem to me the smart pathway to reform would be strategic demonstrations, testing different health system reforms to see which work best. Transferring knowledge and best practices is working in medicine, why abandon it in system reform with an all-or-nothing bet?
The dumb guy question I often ask (and receive blank stares in response) is, “how will universal coverage reduce the burden of the Medicare program on the Federal budget?” Not to be redundant, but it is the “$34 trillion problem.” Sometime soon (e.g., in the President’s first term), Fortune Magazine reports, “Medicare Part A will go cash-flow-negative.” What it will take to stabilize Payer #1 could completely swamp the best intentions of universal coverage advocates.
Monday’s conversation of ACO’s is an interesting first step. Some contend that, beyond Geisinger, Mayo and Kaiser system reforms imagined by The Commonwealth Fund are not doable? Why? Presumably, because their integrated structure is unique and not replicable. Un-integrated entities are not organized or capable of actually profiting on lower reimbursements driven by improved efficiency and outcomes.
Again, I say bully to that. Why can’t the system be reformed before the financing system is thrown into a blender (OK, or at least at a similarly measured, insulated pace)?
Now, the Times article suggests the motivation is *gasp* political. System reforms will be glacial, certainly longer than election cycles can tolerate. Can a candidate run on the success of demonstration projects and incremental learning? No. Universal coverage can happen by matter of fiat, the single stroke of a pen. Then you can stump on accomplishing the long dreamed of ideal of many great Americans. Otherwise, will voters might just wonder, “what exactly did you do?”
How about, “we simply saved the American economy for generations to come”?
Monday, April 13, 2009
A Safety Net?
An interesting article trickled across the wires the morning courtesy of HC Pro. Subtly titled “Could ACO’s Appear on the Medicare Payment Horizon?” it tees up an interesting conversation I’ll get to in a second. First, a couple of prefaces that made this story particularly interesting.
On January 21, 2009, an article by primary care physician, Benjamin Brewer, M.D., appeared in the Wall Street Journal under the title, “How to Make Primary Care Better.” Among other prescriptions, one line particularly caught my eye: “To get real reform we're going to need to put more money into primary care. I have a few suggestions about where to start looking for it…we can revoke the tax exemptions of supposedly nonprofit hospitals that don't fulfill their mission of community service.”
I had forgotten about this piece until a front-page article appeared in the Chicago Tribune last week, “Are Hospitals Passing Off Their Low Profit Patients?” The article bluntly rapped metro-Chicago hospitals for the amount of charity care (more specifically, the small amount of charity care) they provide. A sidebar article recounted the Illinois Supreme Court’s decision last fall rejecting Provena Covenant Medical Center’s (Champaign-Urbana, IL) argument that free care should not be the sole determinant in deciding if a hospital is keeping its charitable promise. Provena Covenant had its tax-exemption repealed 5 years ago and remains in court on the issue.
Over the past few years, presumptive Illinois Gubernatorial hopeful, now-Attorney-General Lisa Madigan has made noise about hospital tax exemptions. The sharks are certainly circling.
That said, the economy is doing hospitals some favors. Uncompensated care cases are up. And, with non-operating, investment income in the toilet, it’s probably politically unpalatable to hunt wounded organizations - especially the only sector that has, up until recently, added 13,000 -17,000 jobs to the economy month to month.
This leads me back to the opening article of interest on the latest healthcare acronym…ACOs. An ACO, an Accountable Care Organization, “can include a variety of hospitals, primary care physicians, and possibly specialists. Potential ACOs could be made up of integrated delivery systems, PHOs, hospitals with multispecialty groups, or even academic centers.”
“However, ACOs would work to promote improved "care coordination and collaboration with providers," working with a defined group of Medicare patients, "the hope would be that unnecessary services would be reduced and quality would be improved."
“In turn, provider payments or bonuses would be tied to quality and resource use. Quality benchmarks, for instance, could include objectives such as lower mortality rates or hospital readmissions.”
An intriguing idea. Finally, serious talk about how to hold the hopefully-reasonably-integrated delivery system accountable for performance, and rewarding them for doing a good job. MedPAC reports there’s support for the idea in Congress as health reform motors along.
So, this is where the safety net might come in. With snipers poised like Navy Seals, holding tax-exempt status in their sights, it seems to me that hospitals are the most capable enterprises to construct/sponsor ACOs. They have the management, the cash, the business systems and the know-how to corral the disparate pieces an ACO would need to be successful. In the Integrated Healthcare movement of the 90’s, beyond a few exceptions at places like Alta Bates and San Jose, hospitals were the agents of integration. This time around though, the spin is more productive. The 90’s were all about control of covered lives. The more you had – hoarding them like rollover minutes in a popular cell phone commercial – the more power you had.
The idea is not completely new. An article appeared in Health Affairs back in December 2006, introducing the ACO as an, “Extended Hospital Medical Staff” as “essentially a hospital-associated multi-specialty group practice that is empirically defined by physicians’ direct or indirect referral patterns to a hospital.”
In February 2007, the Commonwealth Fund reported on the paper, noting, “seriously ill patients receive care from many clinicians in many care settings, proper coordination among these professionals is critical to ensuring that no significant gaps in quality occur. That is why reform efforts focused solely on holding individual providers accountable for the care within their direct control may do little in the end to improve the overall quality of care…Previous efforts in this direction have targeted traditional health maintenance organizations or multispecialty group practices. But these groups represent only a tiny share of the current market: most U.S. physicians are employed in solo or small group practices.”
“Performance measurement and public reporting at the extended hospital staff level is the logical first step to implementing such a system and could begin nationwide relatively quickly.”
While maybe not echoing the acronym, in their February 2009, publication, “The Path to a High Performance U.S. Health System” the Commonwealth Fund did “encourage greater shared accountability for a continuum of health care services. Bundling payments for care needs over a period of time—including physician, hospital, and other clinical care—provides a financial incentive for hospitals and physicians to join forces to improve quality of care and reduce avoidable complications, hospital readmissions or episodes of care.”
As a hospital strategist, I would be attracted to the possibility of the ACO as a pathway to legitimized authority within the delivery system and a defense against cash hungry taxing authorities. It’s always better to be able to show you’re part of the solution than part of the problem.
On January 21, 2009, an article by primary care physician, Benjamin Brewer, M.D., appeared in the Wall Street Journal under the title, “How to Make Primary Care Better.” Among other prescriptions, one line particularly caught my eye: “To get real reform we're going to need to put more money into primary care. I have a few suggestions about where to start looking for it…we can revoke the tax exemptions of supposedly nonprofit hospitals that don't fulfill their mission of community service.”
I had forgotten about this piece until a front-page article appeared in the Chicago Tribune last week, “Are Hospitals Passing Off Their Low Profit Patients?” The article bluntly rapped metro-Chicago hospitals for the amount of charity care (more specifically, the small amount of charity care) they provide. A sidebar article recounted the Illinois Supreme Court’s decision last fall rejecting Provena Covenant Medical Center’s (Champaign-Urbana, IL) argument that free care should not be the sole determinant in deciding if a hospital is keeping its charitable promise. Provena Covenant had its tax-exemption repealed 5 years ago and remains in court on the issue.
Over the past few years, presumptive Illinois Gubernatorial hopeful, now-Attorney-General Lisa Madigan has made noise about hospital tax exemptions. The sharks are certainly circling.
That said, the economy is doing hospitals some favors. Uncompensated care cases are up. And, with non-operating, investment income in the toilet, it’s probably politically unpalatable to hunt wounded organizations - especially the only sector that has, up until recently, added 13,000 -17,000 jobs to the economy month to month.
This leads me back to the opening article of interest on the latest healthcare acronym…ACOs. An ACO, an Accountable Care Organization, “can include a variety of hospitals, primary care physicians, and possibly specialists. Potential ACOs could be made up of integrated delivery systems, PHOs, hospitals with multispecialty groups, or even academic centers.”
“However, ACOs would work to promote improved "care coordination and collaboration with providers," working with a defined group of Medicare patients, "the hope would be that unnecessary services would be reduced and quality would be improved."
“In turn, provider payments or bonuses would be tied to quality and resource use. Quality benchmarks, for instance, could include objectives such as lower mortality rates or hospital readmissions.”
An intriguing idea. Finally, serious talk about how to hold the hopefully-reasonably-integrated delivery system accountable for performance, and rewarding them for doing a good job. MedPAC reports there’s support for the idea in Congress as health reform motors along.
So, this is where the safety net might come in. With snipers poised like Navy Seals, holding tax-exempt status in their sights, it seems to me that hospitals are the most capable enterprises to construct/sponsor ACOs. They have the management, the cash, the business systems and the know-how to corral the disparate pieces an ACO would need to be successful. In the Integrated Healthcare movement of the 90’s, beyond a few exceptions at places like Alta Bates and San Jose, hospitals were the agents of integration. This time around though, the spin is more productive. The 90’s were all about control of covered lives. The more you had – hoarding them like rollover minutes in a popular cell phone commercial – the more power you had.
The idea is not completely new. An article appeared in Health Affairs back in December 2006, introducing the ACO as an, “Extended Hospital Medical Staff” as “essentially a hospital-associated multi-specialty group practice that is empirically defined by physicians’ direct or indirect referral patterns to a hospital.”
In February 2007, the Commonwealth Fund reported on the paper, noting, “seriously ill patients receive care from many clinicians in many care settings, proper coordination among these professionals is critical to ensuring that no significant gaps in quality occur. That is why reform efforts focused solely on holding individual providers accountable for the care within their direct control may do little in the end to improve the overall quality of care…Previous efforts in this direction have targeted traditional health maintenance organizations or multispecialty group practices. But these groups represent only a tiny share of the current market: most U.S. physicians are employed in solo or small group practices.”
“Performance measurement and public reporting at the extended hospital staff level is the logical first step to implementing such a system and could begin nationwide relatively quickly.”
While maybe not echoing the acronym, in their February 2009, publication, “The Path to a High Performance U.S. Health System” the Commonwealth Fund did “encourage greater shared accountability for a continuum of health care services. Bundling payments for care needs over a period of time—including physician, hospital, and other clinical care—provides a financial incentive for hospitals and physicians to join forces to improve quality of care and reduce avoidable complications, hospital readmissions or episodes of care.”
As a hospital strategist, I would be attracted to the possibility of the ACO as a pathway to legitimized authority within the delivery system and a defense against cash hungry taxing authorities. It’s always better to be able to show you’re part of the solution than part of the problem.
Tuesday, January 27, 2009
My Chronic Condition
I don’t know why, but I can’t stop reading about, thinking about, and writing about Chronic Illness Care. The latest edition of Health Affairs focuses on the topic with a number of great essays. I won’t cite them individually, but there are a number worth reading.
I’m also a sucker for a great opening. Health Affairs' Editor-In-Chief kicks it all off with this doozy, “As in many things in health care and health spending, American “exceptionalism” is the rule. The United States is doing an especially rotten job of delivering chronic care, at spectacular cost.” How can you not read on?
She cites a November 2008 Commonwealth Fund survey of 7,500 chronically ill patients in eight countries, including the US, UK and Germany that found “US patients are far more likely than those in the other countries to report high out-of-pocket costs; to forgo care due to the expense; and to experience high rates of medical errors.” The study also found that the care systems in these countries were likely to fall short in delivering chronic care, with care coordination lacking everywhere.
In one essay, Paez, et. al. report, “In 2005, 43.8 percent of the US civilian noninstitutionalized population had one or more conditions that we classified as chronic. One in five reported living with one chronic condition while 10.7 percent of respondents reported two conditions, and 13.3 percent had three or more conditions.” Further, “An overall shift occurred from people reporting zero or only one chronic condition to people reporting multiple chronic conditions, particularly among people in midlife [45-64] and older.” Especially interesting to me was that socioeconomic status was not as correlated to increases in chronic conditions as you’d intuitively expect. From 1999 to 2005 the percentage of people with three or more chronic conditions grew 5.6% among the Poor, 5.5% among those categorized as Middle Income, and 6.7% among High Income individuals.
Beyond the incidence data, the question of prevention and treatment looms. Paez and her partners reported, “Higher drug copayments and three-tier pharmacy plans have been found to reduce adherence to drugs for management of such chronic conditions as diabetes, hypercholesterolemia, hypertension and schizophrenia. Reduced drug adherence includes delaying prescription fills, failing to fill prescriptions, cutting dosages and reducing the frequency of administration.”
So what to do? The suggestions that come from the issue’s authors seem to coalesce around a three-pronged approach: 1. Insurance initiatives, 2. Delivery system initiatives, and 3. Social initiatives.
Insurance Initiatives: Paez and her co-authors conclude by suggesting, “Insurers should consider value-based insurance designs that subsidize high-value chronic care while increasing cost sharing for elective services without proven benefit.” Bodenheimer et. al. assert, “Payment reform should move toward risk-adjusted per patient payment for incentives for quality, services provided by nonclinician team members [more in that in a bit] and population oriented panel management.”
Delivery System Initiatives: Ron Goetzel from Emory University tees up the notion that some big gains, and major innovation, in prevention could be, and is being realized in nonclinical settings, such as the workplace. Gabel, et. al. study the success of attacking obesity in the workplace and suggest, while they have made gains, questions about the right way to fund the programs (paid benefit, reduced premium from carriers, employee responsibility, etc.) persist.
On this topic I was most interested in Bodenheimer, et. al. and their paper on “Confronting the Growing Burden of Chronic Disease: Can the U.S. Health Care Workforce Do the Job?” They present research that on average, “family physicians manage 3.05 problems per [patient] visit; the number of problems grows to 3.88 for people over age sixty-five and 4.6 for patients with diabetes.” This leads to two conclusions. 1. Under current reimbursement pressures, physicians simply don’t have enough time to spend with complicated patients, and 2. Specialists are inefficient tools for tackling these complicated patients because of the multiple systems and comorbidities that interact with one another (and their medications).
They find, “Specialists are better than PCPs at treating some specific diagnoses and can provided procedural interventions that PCPs are not trained to do. Yet PCPs, compared with specialists, provide equal quality of care at lower cost for patients with diabetes, hypertension and lower back pain.”
However, there are problems with the PCP model too. They report patients who are seen for multiple chronic conditions by PCPs report low understanding of their care and only 9 percent of the time do they participate in clinical decisions.
Then there’s the issue of time. “It has been estimated that it would take a PCP 10.6 hours per working day to provide high-quality chronic care to a typical patient panel.”
This leads the authors and other essayists to advance the multidisciplinary team scenario. Simply put, there is evidence a coordinated team approach, often lead by medical assistants or Nurse Practitioners as care quarterbacks are delivering better results at a better price. My question is, who will own this solution? All the evidence comes from controlled situations like the Group Health Cooperative of Puget Sound or Kaiser Permanente. In the fantasyland of the 1990’s, integrated delivery systems, receiving global capitation would be incentivized to force this kind of structural change. Without such a payment and delivery structure, this might become disintermediated to retail clinics…not necessarily more organized, just cheaper per encounter transactions.
Social Initiatives: Until chronic ill health, obesity, and “un-fitness” attain the stigma of drunk driving and smoking in public places, can we reasonably expect social forces to impact behavior? Borrowing from a colleague’s note, “Steven Gortmaker, professor of society, human development, and health at the [Harvard]School of Public Health, observes that the convenience-food culture is so ubiquitous that even conscientious parents have trouble steering their children away from junk food. "You let your kids go on a ‘play date,’" says
the father of two, "and they come home and say, ‘We went to Burger King for
lunch.’" (He notes that on any given day, 30 percent of American children
aged four to 19 eat fast food, and older and wealthier ones eat even more.
Overall, 7 percent of the U.S. population visits McDonald’s each day, and 20
to 25 percent eat in some kind of fast-food restaurant.)
Bodenheimer et. al. summarize it nicely when they conclude, “If payment restricted to face-to-face clinician visits continues as the dominant payment mode, high-quality chronic care will remain an unfulfilled dream…Without a multidisciplinary team, consistently good chronic care is impossible. Without payment reform, multidisciplinary teams are impossible.
And without societal disgust at a ballooning federal budget deficit, increased taxes and other hard choices regarding desired government programs, we’ll stay [seated of course] on this merry-go-round.
I’m also a sucker for a great opening. Health Affairs' Editor-In-Chief kicks it all off with this doozy, “As in many things in health care and health spending, American “exceptionalism” is the rule. The United States is doing an especially rotten job of delivering chronic care, at spectacular cost.” How can you not read on?
She cites a November 2008 Commonwealth Fund survey of 7,500 chronically ill patients in eight countries, including the US, UK and Germany that found “US patients are far more likely than those in the other countries to report high out-of-pocket costs; to forgo care due to the expense; and to experience high rates of medical errors.” The study also found that the care systems in these countries were likely to fall short in delivering chronic care, with care coordination lacking everywhere.
In one essay, Paez, et. al. report, “In 2005, 43.8 percent of the US civilian noninstitutionalized population had one or more conditions that we classified as chronic. One in five reported living with one chronic condition while 10.7 percent of respondents reported two conditions, and 13.3 percent had three or more conditions.” Further, “An overall shift occurred from people reporting zero or only one chronic condition to people reporting multiple chronic conditions, particularly among people in midlife [45-64] and older.” Especially interesting to me was that socioeconomic status was not as correlated to increases in chronic conditions as you’d intuitively expect. From 1999 to 2005 the percentage of people with three or more chronic conditions grew 5.6% among the Poor, 5.5% among those categorized as Middle Income, and 6.7% among High Income individuals.
Beyond the incidence data, the question of prevention and treatment looms. Paez and her partners reported, “Higher drug copayments and three-tier pharmacy plans have been found to reduce adherence to drugs for management of such chronic conditions as diabetes, hypercholesterolemia, hypertension and schizophrenia. Reduced drug adherence includes delaying prescription fills, failing to fill prescriptions, cutting dosages and reducing the frequency of administration.”
So what to do? The suggestions that come from the issue’s authors seem to coalesce around a three-pronged approach: 1. Insurance initiatives, 2. Delivery system initiatives, and 3. Social initiatives.
Insurance Initiatives: Paez and her co-authors conclude by suggesting, “Insurers should consider value-based insurance designs that subsidize high-value chronic care while increasing cost sharing for elective services without proven benefit.” Bodenheimer et. al. assert, “Payment reform should move toward risk-adjusted per patient payment for incentives for quality, services provided by nonclinician team members [more in that in a bit] and population oriented panel management.”
Delivery System Initiatives: Ron Goetzel from Emory University tees up the notion that some big gains, and major innovation, in prevention could be, and is being realized in nonclinical settings, such as the workplace. Gabel, et. al. study the success of attacking obesity in the workplace and suggest, while they have made gains, questions about the right way to fund the programs (paid benefit, reduced premium from carriers, employee responsibility, etc.) persist.
On this topic I was most interested in Bodenheimer, et. al. and their paper on “Confronting the Growing Burden of Chronic Disease: Can the U.S. Health Care Workforce Do the Job?” They present research that on average, “family physicians manage 3.05 problems per [patient] visit; the number of problems grows to 3.88 for people over age sixty-five and 4.6 for patients with diabetes.” This leads to two conclusions. 1. Under current reimbursement pressures, physicians simply don’t have enough time to spend with complicated patients, and 2. Specialists are inefficient tools for tackling these complicated patients because of the multiple systems and comorbidities that interact with one another (and their medications).
They find, “Specialists are better than PCPs at treating some specific diagnoses and can provided procedural interventions that PCPs are not trained to do. Yet PCPs, compared with specialists, provide equal quality of care at lower cost for patients with diabetes, hypertension and lower back pain.”
However, there are problems with the PCP model too. They report patients who are seen for multiple chronic conditions by PCPs report low understanding of their care and only 9 percent of the time do they participate in clinical decisions.
Then there’s the issue of time. “It has been estimated that it would take a PCP 10.6 hours per working day to provide high-quality chronic care to a typical patient panel.”
This leads the authors and other essayists to advance the multidisciplinary team scenario. Simply put, there is evidence a coordinated team approach, often lead by medical assistants or Nurse Practitioners as care quarterbacks are delivering better results at a better price. My question is, who will own this solution? All the evidence comes from controlled situations like the Group Health Cooperative of Puget Sound or Kaiser Permanente. In the fantasyland of the 1990’s, integrated delivery systems, receiving global capitation would be incentivized to force this kind of structural change. Without such a payment and delivery structure, this might become disintermediated to retail clinics…not necessarily more organized, just cheaper per encounter transactions.
Social Initiatives: Until chronic ill health, obesity, and “un-fitness” attain the stigma of drunk driving and smoking in public places, can we reasonably expect social forces to impact behavior? Borrowing from a colleague’s note, “Steven Gortmaker, professor of society, human development, and health at the [Harvard]School of Public Health, observes that the convenience-food culture is so ubiquitous that even conscientious parents have trouble steering their children away from junk food. "You let your kids go on a ‘play date,’" says
the father of two, "and they come home and say, ‘We went to Burger King for
lunch.’" (He notes that on any given day, 30 percent of American children
aged four to 19 eat fast food, and older and wealthier ones eat even more.
Overall, 7 percent of the U.S. population visits McDonald’s each day, and 20
to 25 percent eat in some kind of fast-food restaurant.)
Bodenheimer et. al. summarize it nicely when they conclude, “If payment restricted to face-to-face clinician visits continues as the dominant payment mode, high-quality chronic care will remain an unfulfilled dream…Without a multidisciplinary team, consistently good chronic care is impossible. Without payment reform, multidisciplinary teams are impossible.
And without societal disgust at a ballooning federal budget deficit, increased taxes and other hard choices regarding desired government programs, we’ll stay [seated of course] on this merry-go-round.
Friday, January 16, 2009
You're Fired.
A friend recently asserted that 1-in-5 hospital CEO’s turnover every year. Truth is, it’s consistently been about 15% or 1-in-6.7, according to ACHE. My bold prediction for the new decade: That number jumps closer to my friend’s 20% figure, perhaps even higher. Why? Failure to anticipate the meteor.
I’m talking about the dinosaurs. They couldn’t have seen it coming, but man, when it hit, they were done. Like hospital CEO’s, even if TRex saw the meteor days, weeks, heck months before it hit, they were ill-equipped (short arms being what they are) to change their fate.
I’ve gotten back to IBM’s “Healthcare 2015: Win-win or lose-lose?” and the opening pages of “A portrait and a path to successful transformation” are sobering. IBM identifies three channels of transformation; 1. Transforming Value, 2. Transforming Consumer Responsibility, and 3. Transforming Care Delivery.
There are a myriad of ways to go from that jumping-off point, but a few consistent threads kept bringing me back to the structural centerpiece of the current US health system, the acute care, general hospital. Through this lense I perceive so much opportunity for failure that the demise of the hospital CEO appears nearly assured.
Inability to Transform Value. The cornerstone of this argument is that, by 2015, consumers will “assume much greater financial oversight and responsibility for their healthcare, which, in turn, will drive the demand for value data that is readily accessible, reliable and understandable. Payers will take a more holistic view of value…and [societies] will demand that payment for and quality of healthcare services be aligned to the value those services return both to the individual and to the country or region as a whole.”
My same friend correctly points out that hospitals are the last great bulwarks of information hoarding. Interoperability is something to which we award gold stars because it largely can’t be done. Hospitals have resisted all pressures for transparency that is “readily accessible, reliable and understandable.” They’ve even paid others to obfuscate the issue, such as HealthGrades, US News and World Report, Thompson-Reuters and Healthcare Compare. Once you’ve ceded ground it’s hard to get it back.
Prediction: Hospitals will wrestle this back, with the help of, perhaps, organizations like the Joint Commission (frankly, their biggest potential ally in the quest, because they have more useful information than anyone else), but I suspect the current leadership of hospitals won’t be the ones with the fortitude to do it.
Inability to Transform Consumer Responsibility. Well, this won’t really be the hospital CEO’s fault, but it will happen on the current batch’s watch. Personally, I think this will be the last thing to piece of the puzzle to fall into place, unless the financing mechanism becomes amazingly punitive for preventable, chronic conditions. How it gets hospital CEO’s is this: 1. Financing structures finally change to the point that bad behavior becomes really expensive for Joe Sixpack to maintain. 2. The financial pressure on patients changes their healthcare shopping habits – bearing more of the financial burden, they look to new (retail and other) delivery sites to get their act together. 3. Hospitals realize they are losing connections to customers and those formerly loyal patients begin heeding the advice of new mid-level providers (with no loyalty to the general hospital) in these new care settings. Desperate, they try to close the proverbial barn door after the horse is out. 4. Hospitals begin a scramble to re-engage with people with whom they should have never lost touch. 5. The turnover of hospital marketing directors begins, not because of this failure, but their likely inability to do anything about it. The tide of continued failure drags hospital CEO’s along.
Inability to Transform Care Delivery. Here’s the big one; the “fundamental shift in the nature, mode and means of care delivery.” I’ve gone on in the past about the issue of chronic care, and the current edition of Health Affairs redoubles the call for meaningful change in the US approach to 75%+ of the $2 trillion spent annually on chronic diseases. “Today, preventative care…is a concept without a champion…consumers ignore it, payers do not incentivize it, and providers do not profit from it.”
They go on, “by 2015, we believe chronic patients will be empowered to take control of their diseases through IT-enabled disease management programs that improve outcomes and lower costs. Their treatment will center on their location, thanks to home monitoring devices, which will automatically evaluate data and when needed generate alerts and action recommendations to patients and providers. Patients and their families, assisted by health infomediaries, will replace doctors as the leaders in chronic care management, a shift that will eliminate a major contributor to its cost and, because of doctor time constraints, its brevity.” Only a small, confident slice of visionary hospital leaders will involve themselves here.
This suggests a further decentralization of medical decision-making and authority, away from acute care hospitals. Economy and effectiveness will be described in terms that have less and less to do with general hospitals. IBM proposes this is an opportunity, “encourag[ing] the transformation of today’s massive, general purpose hospitals into centers of excellence devoted to specific conditions and combination triage centers.”
We can debate the pace and likelihood of such a massive transformation, but where I become most skeptical is the defensive mentality of most acute care organizations. “If I can just continue to steal enough heart surgeries from my competitor, I don’t have to do this integration, decentralization thing.” That sounds to me like Big Detroit Auto Thinking, and I believe those three bosses should be shown the door.
I think about the many ways hospital CEO’s will have to transform if the hospital is to remain a key player in the process (which their unique cash and debt position gives them power and influence), and question their track record. Regardless of the pace or ultimate magnitude of the shift, it surely seems hospitals will need to become:
And that seems like an unreasonably tall order. Necessary, but beyond many CEO’s grasps.
Oh, and you can follow me on Twitter. I’m dmiers!
I’m talking about the dinosaurs. They couldn’t have seen it coming, but man, when it hit, they were done. Like hospital CEO’s, even if TRex saw the meteor days, weeks, heck months before it hit, they were ill-equipped (short arms being what they are) to change their fate.
I’ve gotten back to IBM’s “Healthcare 2015: Win-win or lose-lose?” and the opening pages of “A portrait and a path to successful transformation” are sobering. IBM identifies three channels of transformation; 1. Transforming Value, 2. Transforming Consumer Responsibility, and 3. Transforming Care Delivery.
There are a myriad of ways to go from that jumping-off point, but a few consistent threads kept bringing me back to the structural centerpiece of the current US health system, the acute care, general hospital. Through this lense I perceive so much opportunity for failure that the demise of the hospital CEO appears nearly assured.
Inability to Transform Value. The cornerstone of this argument is that, by 2015, consumers will “assume much greater financial oversight and responsibility for their healthcare, which, in turn, will drive the demand for value data that is readily accessible, reliable and understandable. Payers will take a more holistic view of value…and [societies] will demand that payment for and quality of healthcare services be aligned to the value those services return both to the individual and to the country or region as a whole.”
My same friend correctly points out that hospitals are the last great bulwarks of information hoarding. Interoperability is something to which we award gold stars because it largely can’t be done. Hospitals have resisted all pressures for transparency that is “readily accessible, reliable and understandable.” They’ve even paid others to obfuscate the issue, such as HealthGrades, US News and World Report, Thompson-Reuters and Healthcare Compare. Once you’ve ceded ground it’s hard to get it back.
Prediction: Hospitals will wrestle this back, with the help of, perhaps, organizations like the Joint Commission (frankly, their biggest potential ally in the quest, because they have more useful information than anyone else), but I suspect the current leadership of hospitals won’t be the ones with the fortitude to do it.
Inability to Transform Consumer Responsibility. Well, this won’t really be the hospital CEO’s fault, but it will happen on the current batch’s watch. Personally, I think this will be the last thing to piece of the puzzle to fall into place, unless the financing mechanism becomes amazingly punitive for preventable, chronic conditions. How it gets hospital CEO’s is this: 1. Financing structures finally change to the point that bad behavior becomes really expensive for Joe Sixpack to maintain. 2. The financial pressure on patients changes their healthcare shopping habits – bearing more of the financial burden, they look to new (retail and other) delivery sites to get their act together. 3. Hospitals realize they are losing connections to customers and those formerly loyal patients begin heeding the advice of new mid-level providers (with no loyalty to the general hospital) in these new care settings. Desperate, they try to close the proverbial barn door after the horse is out. 4. Hospitals begin a scramble to re-engage with people with whom they should have never lost touch. 5. The turnover of hospital marketing directors begins, not because of this failure, but their likely inability to do anything about it. The tide of continued failure drags hospital CEO’s along.
Inability to Transform Care Delivery. Here’s the big one; the “fundamental shift in the nature, mode and means of care delivery.” I’ve gone on in the past about the issue of chronic care, and the current edition of Health Affairs redoubles the call for meaningful change in the US approach to 75%+ of the $2 trillion spent annually on chronic diseases. “Today, preventative care…is a concept without a champion…consumers ignore it, payers do not incentivize it, and providers do not profit from it.”
They go on, “by 2015, we believe chronic patients will be empowered to take control of their diseases through IT-enabled disease management programs that improve outcomes and lower costs. Their treatment will center on their location, thanks to home monitoring devices, which will automatically evaluate data and when needed generate alerts and action recommendations to patients and providers. Patients and their families, assisted by health infomediaries, will replace doctors as the leaders in chronic care management, a shift that will eliminate a major contributor to its cost and, because of doctor time constraints, its brevity.” Only a small, confident slice of visionary hospital leaders will involve themselves here.
This suggests a further decentralization of medical decision-making and authority, away from acute care hospitals. Economy and effectiveness will be described in terms that have less and less to do with general hospitals. IBM proposes this is an opportunity, “encourag[ing] the transformation of today’s massive, general purpose hospitals into centers of excellence devoted to specific conditions and combination triage centers.”
We can debate the pace and likelihood of such a massive transformation, but where I become most skeptical is the defensive mentality of most acute care organizations. “If I can just continue to steal enough heart surgeries from my competitor, I don’t have to do this integration, decentralization thing.” That sounds to me like Big Detroit Auto Thinking, and I believe those three bosses should be shown the door.
I think about the many ways hospital CEO’s will have to transform if the hospital is to remain a key player in the process (which their unique cash and debt position gives them power and influence), and question their track record. Regardless of the pace or ultimate magnitude of the shift, it surely seems hospitals will need to become:
- More physically decentralized
- More specialized
- More integrated with physicians and a new class of mid-level providers
- More non-acute focused and successful
- More data integrated
- More data transparent
And that seems like an unreasonably tall order. Necessary, but beyond many CEO’s grasps.
Oh, and you can follow me on Twitter. I’m dmiers!
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