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Hospital Chiefs Still Grappling With Reform

 |  By cclark@healthleadersmedia.com  
   March 24, 2011

The program cover for the annual American College of Healthcare Executives meeting in Chicago this week portrays a driver's view over the steering wheel as the car ascends a scenic mountain.

But the navigation screen on the dashboard shows danger: an abrupt turn a few yards up and a fall to oblivion for anyone not paying attention.

This year, many of the nearly 5,000 attendees at the ACHE said they are indeed paying a lot more attention to this road, waking up to the fact that the way they operate must dramatically change.

On the first anniversary of the Affordable Care Act's passage, many attendees confided that they have gone through mood swings much like stages of grief: shock and denial, anger and bargaining, depression and reflection and are starting to take that upward turn. Perhaps, some of them are starting to have hope.

"We'd been thinking maybe the law would be reversed in the courts; that maybe we [wouldn't] need to change things that much," says Nick Neuman, MD, of Bismarck, ND, a member of the governing board of 306-bed St. Alexius Medical Center. "Our hospital has been, I'm afraid to say, complacent. But now, after listening to some of these sessions, I'm more convinced that is a dangerous assumption."

So as soon as he gets back to Bismarck, Neuman said he will be "meeting with physician leaders to get them to understand how we have to partner and to change strategies. The future of our survival is at stake."

They have heard, and hopefully understand, how important it now is. They are going to have to change their organizations in major, cataclysmic ways especially if they haven't started to do so already.

Tom Dolan, president and chief executive officer of ACHE, says leadership in general is now "much more knowledgeable" about the steps they have to take. "They know they need to reduce costs. They understand they have to adopt Toyota and Lean manufacturing strategies. They know they have to reduce errors, medication mistakes, reduce readmissions and improve quality measures for specific diseases."

"They know they have to dramatically re-engineer the way we provide care and can't tinker the way they have in the past." That's why, he says, attendance at this year's meeting is dramatically up.

I gleaned from speaking with many C-suite executives over the last few days that for months they've felt stymied, not knowing where to turn or what to do first, or even what the phrases "medical home," or "accountable care organization" might mean for their neck of the woods. Only the first of many critical federal regulations – that for inpatient value-based purchasing incentives – has been released.  Everyone I spoke with is anxiously awaiting the government's ACO regulations, which are expected by month's end.

In one of the most well-attended talks of the week, Richard Pollack, executive vice president with the American Hospital Association, summed up a dizzying assortment of political gear grinding affecting healthcare reform inside the Beltway. But in the end, he says, hospital executives should already know what their course should now be, regardless of whether the Affordable Care Act is reversed.

"The strategic direction embedded in these changes is to move away from a fee-for-service system," he told the crowd. "And while many of us have thrived under the system, we all know that the incentives are in the wrong places because the incentives under that system are to do more." Prevention strategies aren't employed because "we don't get paid to do those things."

That's got to change.

It doesn't matter whether the reform bill stays or goes, he and many others say. The country can't continue on this trajectory of spending so much money without measuring value.

It's clear that with thousands of pages of regulations to come, there are going to be some mistakes, he continued. And there will be the need to make fixes. "You don't do something of this magnitude and not make mistakes or leave stuff behind," he told the attendees.

So the idea for these hospital chiefs is to take a deep breath and get to work, because they have to start somewhere.

And that somewhere means finding out all the things their hospitals aren't doing that they need to start doing quickly. 

For Scott Cantley, CEO of Ohio's 200-bed Marietta Memorial Hospital, one lesson learned is that he needs to talk with his facility's employed physicians to persuade them to standardize their care practices, according to what works best for their patients. "We want to get to the point where we don't have so much deviation from doctor to doctor," he tells me.

A session on evaluating physician compensation, and understanding the concepts behind relative value units, was helpful to John Snyder, chief operating officer of 325-bed Carle Foundation Hospital in Champaign-Urbana, IL.

Last year, in part because of the changes reflected in healthcare reform legislation that were then under discussion, Carle set in motion plans to purchase a 350-physician specialty group, a large community clinic and a radiology practice to streamline a continuum care and collaborate with their providers instead of compete with them.

There were more than 150 sessions offered over the week-long session and it was hard to choose which ones to attend. These five areas illustrate the major themes of the conference:

1. Physician alignment and employment, "integrated delivery systems" medical homes or accountable care organizations. ACHE's Dolan says that more and more, physicians are coming to hospitals asking for jobs. "They no longer want to be independent," he says. Sessions attempted to help hospital and physician group leaders understand how they can those deals to avoid anti-trust or other legal problems, and how aggressively they must vet their prospective partners.

2. Board governance and new responsibilities and liabilities of hospitals' boards of directors, new rules that dictate board behavior, conflict of interest, transparency or disclosure.

3. Supply chain issues and comparative effectiveness analysis of services, supplies and medical devices. How to settle disputes over what gloves to buy, what hand sanitizers to install , and which  implants to persuade surgeons to use. How to successfully analyze worth and keep everybody happy.

4. Prophylaxis against anything bad, such as adverse events, recovery audit contractor audits, sentinel events, violence, disasters,  and rowdy, disruptive physicians. For example, one session was entitled "Preparing to survive a critical incident."

5. How to set performance metrics for clinical procedures, physicians and clinical staff. A woman from a hospital system in New Haven told me that they're trying to get physicians at all their facilities to standardize their pre-surgical safety procedures. At what point do you call a time-out, and for how long?

The AHA's Pollack said that the coming years are going to be tricky.

"We have to prepare to convert to new IT systems and improve the quality and safety of patient care, and we have to reduce the cost of health care while we do these things, we have to find new and better ways to align the interests of hospitals and physicians without inviting the ire of the Justice Department. And we have to continue to deliver care under the existing model as we try to leave it behind.

"But how do we get from point A to Point B? How do you manage with one foot in one world knowing there's this other world coming?"

It was cold, rainy, snowy at times, and of course windy in Chicago.  And it'll be good to get back home. But the stories and challenges these executives shared about their journey makes me realize that many of them are paying a lot more attention to Point B, and the road ahead.

I just hope that they can all safely make that turn.

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