Going into Drydock

I am going to take a bit of a sabbatical from this blog.  I am spending more time working with companies in the patient/provider communication space, and find my inspiration is aligning more around that subject. My husband and I contribute to a blog, “Leave a Message…”, where we share our thoughts about tips, trends, best (and worst) practices on how patients and healthcare providers interact, whether it is via phone, social media, the internet, patient portals, signal flags (just kidding)  or any other communication medium.

Healthcare is rapidly changing with tricky seas ahead. Some day, I may decide once again, to put this old boat back in the water   But til then I wish my readers smooth sailing and give a honk and a waive when you pass by.

Janet

Hospitals as Hotels?

While I was not able to attend last month’s e-patient conference in Philadelphia, I was able to watch some of the sessions online.  One of talks that garnered the most feedback was a talk by Harris Rosen, the head of Rosen Hotel group, based in Orlando, Florida.   Most of his talk click here revolved around his philosophy regarding employer self-funded healthcare (including his insistence that  his employees stay nicotine free).  However, the part of the talk that really spoke to me was his observations regarding hospitals and patient experience (around 41:30 in the talk).  Rosen is toying with the idea of opening a hospital modeled after a hotel.   Check-in would be like a hotel, patients can wear their own PJ’s, rooms would have Murphy beds for family staying over, pets would be allowed, and there would be 24 hour room service.   Rosen feels that he can provide a luxury stay at a cost effective price because his company has a large infrastructure in place including finance and purchasing.

While some of his ideas would be hard to implement,  (pets in a hospital?), some do have merit.  I applaud his vision of treating patients as guests (and employees as family), rather than the objects they are now.  Patients seek healthcare when they are most vulnerable, yet we tolerate a dehumanizing healthcare system.  Yes, there are reasons  private destination hospitals tend to lead the way in patient comfort.  They have to give families confidence to entrust their love one’s care to them instead of a local (and often less costly) institution.  But there is no reason that public and non-profit hospitals can’t create a culture of kindness and humanity, even within their limited resources.  Just ask any worker in any hospital. They can and will give you great ideas on how to improve their patients’ experience.

We know the winds are changing.   One of the metrics that Medicare will be using in their Value Based Purchasing reimbursement (planned start – October 2012), is how satisfied patients are with their experience of care at a hospital.  It will take time, dedication, leadership, patience (lots of patience) and ongoing commitment to change our current healthcare culture to meet this new emphasis of patient experience.   While I do not advocate institutions remodel to look like the local Hampton Inn or Embassy Suites, they could take some examples from hotels on how to improve the customer experience in their product offering (free WiFi for example).  Hospitals have a year before patient experience starts truly effecting their bottom line.  They better start now.

You have to give them carrots and sticks….

Hospitals are dammed if they do, dammed if they don’t.   The federal government is pushing them to reduce 30 day readmissions to lessen the Medicare spend.  However, when hospitals comply, they get bit.   An example taken from a recent post to the Bloomberg News website.

The Mount Sinai (NY) experience may be instructive. From September 2010 to May 2011, the hospital’s Medicare revenue rose only 2 percent over the previous year — in part because the number of inpatient cases fell. Why was that? One important reason was that the number of patients readmitted to the hospital within 30 days of discharge was 5 percent less than what it had been the previous year.

The post continues;

Reimbursement from Medicare is still primarily based on how many services hospitals perform rather than on how well they care for patients, so hospitals are often financially penalized for improving value and quality. The Mount Sinai program to reduce readmissions, for example, is costly for the hospital both because of the extra expense of running it and because fewer readmissions means less revenue. Ken Davis, the president and chief executive officer of Mount Sinai, says the hospital won’t be able to afford continuing the successful program if the financial incentives remain so skewed against it.

Granted the author, Peter Orszag has a political agenda with his views, having been a President Obama’s former director of the Office of Management and Budget.   However, the only reason Mt Sinai is even looking at reducing 30 day admissions is because they are no getting paid for it.  However if at the end of the day, the math doesn’t work, look for it and other hospitals to question their readmission reduction programs.

The Intersection of Cost, Quality, and Patient Satisfaction

Now that we are in the dog days of summer, I have some time to catch up on some of my backlog.  There were two items today that caught my attention.

John Goodman (the policy analyst, not the actor), has been writing in his blog about the relationship between the underlying cost of care, wait times, amenities and quality.  In an April 27 blog post he observes that when costs are transparent, and consumers have skin in the game, providers will compete on price and quality to garner business.  In a  follow up post dated June 29th , he writes about the inverse, what happens when third-party payors obscure the true cost of care.  Goodman notes that when patients do not make choices based on price, they will make choices based on time, quality or amenities.  And since quality information is the hardest to gather, patients will make use the markers that are easier to see, time to access, and amenities.  Goodman observes in markets where there is a undersupply of services, hospitals wanting to cater to patient satisfaction might not be as quick to improve quality if it means grumbling patients have to wait longer for services.  And in markets that have oversupply, many facilities go the less expensive route and compete on amenities, rather than instituting the more expensive changes that bring up quality levels. Goodman says it best “Some of the literature on hospital economics suggests that quality improvement is quite expensive, and that dollar-for-dollar amenity improvements will increase hospital revenues by more than quality improvement. This is coupled with surveys that find patients more sensitive to amenity changes than to quality changes. (Of course, this latter finding may only reflect the fact that hospitals aren’t really trying to communicate quality information.)”

A perfect intersection of what Goodman is talking about is a new service called InQuickER.  It is a website that allows patients to schedule their ER visits with participating hospitals.   My first reaction was “Are you kidding?”, but after I counted to 10, I started to smile.

The concept is brilliant.  Emergent cases are notified to go to the nearest ER. Non-emergent cases are slotted in predictable times. Patients love that they are not sitting around the ED waiting room.  Staff likes it because it allows load balancing of non-critical cases.  Participating hospitals like it as they are able to offer a low-cost perk, and differentiator.   There is a fee to use it, which looks like $4.99 for an urgent care center appointment, $9.99 for an ED appointment.

However I have to ask, if the patient is paying the true cost instead of the co-pay, would they be going to the ED for non-critical care in the first place?   Or would they go to a physician’s office (or retail clinic) instead?

Traveling Jan (or why I have been invisible for the last few weeks)

In the last month or so I have been to:

1. Philadelphia for the CBI Conference on Patient Adherence

• Las Vegas for the Armada (specialty pharma purchasing organization) Summit

• London and Frankfurt (for our MBA program’s global healthcare studies class)

I have also finished 2 final papers for class, and walked for my graduation ceremony (even though I have 10 weeks left of class).

With all of this healthcare related traveling it has been amazing the common themes that keep coming up in conversations. In the US we are struggling with access, in UK and Germany, the conversation is about what the government will approve reimbursement for. Payors in all 3 countries are all struggling with growing demand and their impact on budgets whether it is private insurance companies (US), sickness funds (GER) or the government (UK, US – Medicare, Medicaid, VA- or the few German uninsured). In the US, the FDA looks at safety, in Germany they have implemented rules that require new treatments be evaluated not only for safety and efficacy but also for cost effectiveness against existing treatments. The UK is looking to make hospitals more efficient and financially accountable.  And everywhere we went the greatest conversation revolved around chronic disease management especially Type 2 Diabetes.

What I found most interesting is that the organizations we met with (both public and private) wanted to learn from us as much as we wanted to learn from them.  While there are many improvements needed in our system, there are pro’s and con’s to the other models we looked at. In both Germany and the UK the cost for healthcare are much lower than the US, but with reasons that could not be duplicated here. In the UK they have a single payor with a government panel (NICE) that decides what will or will not be covered. If patients want treatments not approved by NICE, they need private insurance or pay out of pocket.  In Germany, like the US, the majority of the healthcare costs are covered by sickness funds that are funded by a combination of employer/employee contributions. An employer can decide which of the many sickness funds will cover their employees, however all of the funds are NON-PROFIT, as opposed to the US where they are under pressure to create value for their shareholders. And while physicians overseas do not have the malpractice insurance premiums or med school debt that our physicians have in the US, they make far less than their US counterparts. While all of these concepts work (with grumbling) within the context of their systems, I do not see either the insurance lobby or politicians, or providers allowing them to translate over here.

So what is the answer to our spiraling costs?  The one easy answer is we have to get off the reactive  fee for service model and look proactively at patient health. We have started down that path with the concept of ACO’s and bundeled payment models, and as painful as it is to change, we have to continue.  As much as many of the players do not want to give up their autonomy, the only way we can look at keep costs down is to incentivize wellness and change the mindset from fixing what is wrong with the patient, to having the patient be a partner in improving their own health and outcomes. Yes, there are upfront costs to changing the model, and with shrinking reimbursements, most providers are having a hard time covering current expenses let alone fund future improvements.  They will need help (hello pharma, government and insurance companies….). But with no disrespect to other systems, we can not import what they do and expect it to work over here. They have been in place long enough to be integrated into their culture.   We need to develop one. that we can afford, that integrates with ours.       

ACHE Congress 2011 – A Different Perspective

 

Due to a generous grant from the Thorek Foundation, I and several others of my peers from our MBA program in Health Care Managementhad the privilege of attending this year’s ACHE Congress.  Since I was on the student track, I did not have the opportunity to attend all of the events, but some of the presentations I listened to included:

•      Amir Kaissi (Trinity University) and Dan Q Linn (Geisinger Careworks) spoke about hospital owned and affiliated retail clinics.
•      Kathy Young, Mary Ellen Griffin and Sandra Herman from St.Joseph’s – Kokomo IN shared their experiences in turning a community hospital around.
•      Tadd Pullin and Glenn Fosdick – showed how the branding and marketing efforts of Nebraska Medical Center impacted their growth and had true ROI.
•      Virginia Richardson (Institute for Leadership in Medicine) spoke on social media for patient engagement.
•      Eric Topol, (Scripps Translational Science Institute) spoke about technologies that will impact the future of medicine including social media (keeps popping up!), telemedicine, and genomics.

In the spirit of full disclosure I have to state that I am not a hospital administrator (nor do I play one on TV).  My insights (or naiveté) come from being in the business world for the last 25+ years, a world that operates far differently than healthcare, especially hospitals.  My perspective is far different than most attendees but to me there were some signals that the stewards of our healthcare institutions better start paying attention to.

First the dominant conference theme:

• Changes in reimbursement – I am starting with this as it is most pressing issue and I want to get it on the table and move on.   Do more with less is the mantra and organizations that are creative with their physician alignments and transparent to their staff and their community will be in the best position to weather the next few years.  Got it – ‘nuff said.

Now what should be in the mix but is not:

•            Healthcare is going direct to consumer, not the other way around.  Whether it is retail clinics,   social media, or smartphone apps, hospitals and health systems will need to employ the tools that engage the patients on their own turf.  Patients increasingly are turning to the internet for health information, engaging in conversations about their conditions (and your brand) in common social medial platforms like Facebook, You Tube and Twitter, and as well as online health websites, hospital rating sites, and patient communities.  Health technologies are dropping in price allowing patients to do at home what was formally the province of hospitals like monitoring their sleep or home based genomic testing.  Several health systems have recognized this shift and are starting to align with this new movement by employing robust social media strategies, creating affiliated retail clinics, and exploring ways to integrate consumer health technologies into their protocols.   Many have not, and if they don’t start soon, they will not meet patient expectations and lose market share (Kodak anyone?).
•          Employees are an untapped resource and your best marketers.   If you develop a culture of engagement with your employees they will return the favor tenfold.  St. Joseph credits its UM2M (You matter to me) campaign as a strong contributor to their being named one of the best places to work in Indiana four years in a row.  Nebraska Medical Center concentrates on sustaining and growing internal brand evangelists and has an internal hire referral rate of 44%. Employees wear their work gear proudly contributing to $1ML revenue from a branded retail store. Both hospitals credit their internal reputation as a key contributor to their strong external market share.

Several organizations already understand the many drivers in their community’s behavior and are using a creative mix of solutions to contribute to their system health and stability. As we move towards integrated care, the influence of individual physicians to bring new patients to a hospital or health system will diminish.  Geisinger, St. Joseph’s and Nebraska Medical Center are far different organizations, but each has created their own strategies to differenciate themselves, using the contributions that of ease of access, internal reputation, and/or telling your story where consumers are actively seeking information, bring. Others would be wise to look to their (or other’s) examples.   Missing trends can be deadly.  Just ask WANG Labs.

Models are Out there to Reduce Costs. They Just Have to be Funded.

 

Health Affairs this morning released their March issue which is devoted to innovations in healthcare delivery.  There were a total of 15 different programs mentioned, grouped around the following areas:

 

• Providing Care to Seniors

• Treating Children with Asthma

• Caring for Vulnerable Populations

• Coordinating Care

• Providing Patient-Centered Care

• Delivering End-of-Life Care

I could do a blog post on each program, but what is more striking is the common solutions that showed up in many of the programs.  One theme seen over and over again was the use of multidisciplinary teams to oversee and coordinate care in hospitals, nursing facilities or at home. Multidisciplinary not meaning a primary care and specialist treating a patient, but using resources like, behavior health specialists, pharmacists and others who bring to the patient care a broader base of knowledge.  Another commonality was how many different programs employed social workers, patient advocates, care managers and the like to have ongoing relationships with the patients outside of the care facilities.  These relationships support compliance and identify health issues that are gestating before they get to a crisis state.  A third theme was making it easy for the patients to receive care.  Smart use of same day appointments, group appointments and mini-clinics gave patients opportunities to receive cost effective and timely care.

All of these programs fit outside how healthcare is currently provisioned.  All of them are far less expensive than ourcurrent system hospital centric fee for service models.  None of them use state of the art

technologies, or new facilities.  (Click here to see a Concord (NH) Monitor article about how new facilities do not always translate to improved care ).

 

These programs need to be funded.  And it needs to be done in a way that makes sense to the organizations that provide them.  Primary care is the lynch pin to the success of all of these programs. And it is still seen as the very poor step child in our current provisioning model.

The sooner CMS and the other payors support and encourage these types of programs, the faster we can impact the success of our nation’s health.

For an overview of the Health Affairs issue click here

Intervention is the Best Prevention

One of my favorite commentators on healthcare economics is Dr. Atul Gawande, a physician who frequently contributes to the New Yorker. In the a January 17th posting on the New Yorker blog, the blog talks about from Gawande’s article on how to reduce costs for “frequent flyers”, those who are constant consumers of high priced medical services. What is interesting is that the ideas cited did not come from a managed care plans, or ACOs, but rather a small players, looking for how they could improve patient’s well beings.

The first example given was an idea from a single physician, Jeffrey Brenner, who practices in Camden, New Jersey.

From the article:

Brenner’s team, which includes a nurse practitioner and a social worker, make regular home visits and phone calls to check in about new and existing complaints, unfilled prescriptions, and other complications that could land them back in the hospital. They help apply for disability insurance and fill out paperwork for state-run housing where their medication can be overseen. They encourage these super-utilizers to improve their lives with steps like quitting smoking, cooking more, joining Alcoholics Anonymous—even going to church.

Brenner found that his first thirty-six patients saw a forty-per-cent reduction in average monthly hospital and E.R. visits. They also saw a fifty-six-per-cent reduction in average hospital bills—savings that Gawande describes as “revolutionary”

Another example is from an in-house clinic for an Atlantic City hospital. The clinic was designed to provide care for the hospital workers with high medical expenses. Unlike the HMO’s of the past, the patients could receive unlimited access to care. Again the results were surprising. From the article:

Rushika Fernandopulle, who runs the clinic, found that after twelve months the first twelve hundred patients had forty per cent fewer emergency-room visits and hospital admissions and twenty-five per cent fewer surgical procedures. An independent economist who studied these Atlantic City hospital workers found that their costs dropped twenty-five per cent compared to a similar population of high-cost patients in Las Vegas

What is striking about these (and other examples given) is they are simple solutions that are easy to implement. They are not expensive in comparison to the cost savings they provide. And they do not need large infrastructures or systems realignments. They goes back to a common thread of health care reform, focus on outcomes, not transactions.

Click herefor the blog post and the comments that follow.

Here’s a novel thought, lets tie reimbursement to effectiveness!

Most of the conversation regarding changing the reimbursement model has been tied to organizational efficiencies (bundled payments and ACO’s), there has been very little discussion of tying reimbursement to therapy effectiveness. In an October Health Affairs article Steven Pearson, president of the Institute for Clinical and Economic Review and Peter Bach, an associate attending physician at Memorial Sloan-Kettering Cancer Center, state the case for using reimbursement as a carrot to incentivize providers to use therapies that show “superior” outcomes. The authors propose a 3 year baseline to evaluate whether a therapy deserves increased payment.

According to a WSJ blog posting about the study,

They use intensity-modulated radiation therapy, which was rolled out in the early 2000s, as an example. Medicare’s reimbursement for the treatment was set at about $42,000 for prostate cancer treatment, compared to $10,000 for an older form of radiation — though there were no gold-standard studies comparing the risks and benefits of the two procedures. Hospitals bought the spiffy new equipment … and Medicare spent an estimated $1.5 billion more on prostate cancer treatment, the authors write.


If that reimbursement rate had been guaranteed only for three years before being revisited, there’d have been an “incentive for manufacturers and clinicians to perform the research needed to evaluate the clinical performance of the new therapy in comparison to the standard three-dimensional treatment,” the authors write


While comparative effectiveness has been vilified as stifling creativity, it may also have the effect of changing the game. By awarding innovation via increased payments, it throws a challenge to suppliers (pharmaceutical companies in particular) to come up with new solutions that are innovative instead of the low hanging fruit of slight variations to extend patents.

However we are talking Medicare here, so don’t hold your breath…..

PS. As a follow-up to the blog posting the lead author wrote,

As the lead author, I hope you will permit me to make one early comment. The title of the blog asks whether cost-effectiveness should be considered in coverage decisions at Medicare. That is exactly NOT what we are proposing. Our idea is not to ask whether something is or isn’t cost-effective, or whether something passes an arbitrary threshold of cost-effectiveness and therefore merits coverage. Instead, we think it would make more sense for Medicare (and by extension other insurers) to make a judgment about the comparative CLINICAL effectiveness of a new service in determing how much to pay for it — AFTER the insurer has already decided to cover the new service according to the process and standards they use now. Setting payment in this way would avoid many of our current problems associated with a “cost-plus” reimbursement system that all too often pays 2-5 times as much for new services without any solid evidence that they work better than what we can already do for patients. No payment system is perfect, but we hope ours might provide a model for how Medicare can shift towards a future when the real question isn’t a “yes/no” coverage decision but a “yes, and…” payment decision

Change the behavior, Change the outcome

In a The Health Care Blog posting dated 9/26/2010, Joe Flower, a noted healthcare systems expert, looked at three programs that have different methods and viewpoints to see how changing the traditional patient/provider/payer roles and responsibilities can impact results. He found while each program had a different starting point, by influencing patient behavior all three had positive impacts on both patient wellness and cost reduction.

Employer Driven Programs

Because of its’ size, Boeing corporation chooses to self-fund their employee healthcare. As an experiment, the company, and Regent BC/BS who runs the plan, asked employees if they wanted to enroll in a special program. Those who said no were the “control” group; those who said yes were “test” group. The test group was overseen by multi specialty clinician groups that evaluated health risks and set improvement goals. The goals were supported by health improvement plans, coaching, classes, and new meds, anything that would change lifestyle and support compliance. The outcome? From the article…

After 30 months, this “medical home” team model and intensive focus showed results: The experimental group not only showed marked improvement in health metrics, but even counting the cost of all the extra work and attention, its medical costs were 20 percent lower than those of the control group. Twenty percent savings on your “frequent fliers”—that’s a big number.

A similar pilot program was run through the organization HealthMapsRX. HealthMapsRx has a roster of pharmacists that businesses can utilize to be health coaches for their employees, helping patients manage chronic diseases. HealthMapsRX was recently involved in the 10 city diabetes challenge sponsored by Glaxo, Smith, Kline and the American Pharmacists Association. During the program, 30 employers in 10 cities waived co-payments for diabetes medications and supplies if participants met regularly with HealthMapsRx coaches, who helped them track their A1C, blood pressure, and cholesterol, and who also taught patients to manage their disease through exercise, nutrition and other lifestyle changes. Pharmacists communicated with patients physicians after every visit and referred patients to other health care providers for additional care or education as needed. Data from the program showed average total health care costs were reduced annually by $1,079 per patient compared to projected costs if the DTCC had not been implemented.

Insurance Driven Programs

There has been a lot of discussion regarding the impact on Health Savings Plans and Health Reimbursement Arrangements on healthcare costs. CIGNA has a Choice Fund plan that allows consumers to utilize HSA’s and HRA’s. Now one would think that because consumers have “skin in the game” with this type of coverage, they would consume less healthcare. However that is not the case. From the article:

Every year end for several years now, CIGNA has released the results of participation in its Choice Fund consumer-directed health plan (CDHP). In January of this year, for instance, CIGNA reported that employees enrolled in the CIGNA Choice Fund, compared with those enrolled in their more traditional plans, incurred 14 percent lower medical costs. People with specific chronic conditions did even better—15 percent lower for diabetes patients, 21 percent lower for people with joint and back pain and 27 percent lower for people with high blood pressure.

And this is key: The employees did not save money by skipping medical care. People on both types of plans were equally compliant with treatment regimens. The difference in cost seems to spring from better management of the chronic conditions and more careful use of preference-sensitive services.

The business press regularly reports the results as proof that CDHPs lower health care costs and improve employees’ health—but that’s getting the story wrong. The CDHP alone is not what works. What works is using the employees’ “skin in the game” as the basis for a comprehensive program of incentives and massive clinical and information support aimed at behavior change, education, preventive measures and control of chronic syndromes. The programs vary from market to market, even from one employer to another, and often involve contracts with specific health care providers to deal with specific types of problems. Employers pay a small amount extra per year for the extra support, expecting that they will be able to recoup the extra payment in lower costs over time.

So three different programs, three different starting points, similar outcomes. By making patients active participants instead of passive consumers, costs go down, outcomes go up.   With 70-75 % of healthcare costs to be driven by chronic conditions, the model has to change for the US to get greater value for its’ healthcare dollar.  With a bit of creativity, and patient nudges, it can.

To see the post click here.