The primary goal of Working to Fight AMR is closing the gap between the increasing number of drug-resistant infections and production of new antimicrobials.
A new coalition of biotechnology stakeholders has formed to promote development of new antibiotics to fight antimicrobial resistance.
The Centers for Disease Control and Prevention estimates more than 2 million Americans experience a drug-resistant infection annually, with at least 23,000 deaths. A new estimate from the Washington University School of Medicine in St. Louis puts the annual death toll as high as 162,000.
Working to Fight AMR launched in August to close the gap in the pharmacological arms race between deadly microbes and antibiotic treatments, the new coalition's director told HealthLeaders last week.
"Many procedures are only possible because of the ability to treat infection, including cancer therapies, transplantation, complex surgeries, and Cesarean sections. Unfortunately, our use of antimicrobials has prompted an evolutionary response, and we are now in a phase where we are behind the curve. Resistance is increasing, and we are not producing enough new drugs to keep pace," said Greg Frank, PhD, director of Working to Fight AMR, and director of infectious disease at the Biotechnology Innovation Organization in Washington, DC.
Several biotechnology industry leaders have joined the new coalition:
Aleks Engel, PhD, director of the REPAIR Impact Fund at Novo Holdings
Julie Louise Gerberding, MD, MPH, former director of the Centers for Disease Control and Prevention and executive vice president and chief patient officer at Merck
The economics of antibiotics development is dysfunctional, Frank says.
"When someone develops a brand new, innovative antibiotic, the product will be reserved for the worst of all cases only when no other treatments work. You do not want to use these products indiscriminately because every time you use a product, new resistance develops. This makes it hard for industry to generate a return on investment. What we have been seeing over the past two decades is an exodus of the large pharmaceutical companies from developing antibiotics. And many of the small biotechs that are developing these products are struggling to raise the capital that they need."
The recent bankruptcy of South San Francisco, California-based Achaogen illustrates the economic problem.
Achaogen developed plazomicin, an innovative antibiotic with infection and antiterrorism applications that received government approval in 2018. The company filed for bankruptcy protection in April.
"They received approval for their antibiotic last summer and filed for bankruptcy earlier this year because they could not survive in the market given how little their antibiotic was used. They are not the only company that is in trouble. There are several other biotechs that have recent approvals that are also experiencing similar commercial challenges," Frank says.
Antibiotics are losing the antimicrobial arms race, he says. "We have a pipeline of very few products relative to the need to keep pace with resistance. There are only about 43 antimicrobials under development right now. Only a handful of those will actually reach patients given the trials and tribulations of clinical development. That is not nearly enough to stay ahead of antimicrobial resistance."
Antimicrobial policy prescriptions
Working to Fight AMR is calling for two federal policy initiatives:
1. Developing an Innovative Strategy for Antimicrobial Resistant Microorganisms (DISARM) Act: Introduced by Sens. Bob Casey and Johnny Isakson, this bill aims to address some of the reimbursement challenges for new antibiotics, which are more expensive than most established antibiotics, Frank says.
"It creates a separate payment for qualifying innovative antimicrobials outside of bundled payments, so the hospital is made whole regardless of whether these innovative antibiotics are used. In their clinical decision-making, it will allow the people in charge of an antibiotics stewardship program at a hospital to prescribe antibiotics based on whatever they think is best for the patient rather than the cost."
2. Pull incentive: Working to Fight AMR is advocating for new financial incentives in antibiotics development.
"The new incentives would aim to provide some level of substantial financial reward to a company that develops an innovative antimicrobial that meets an urgent unmet public health need. This would be reserved for the best-of-the-best products to provide sustainable return on investment. You don't want these products to be used widely. You want to find a way to generate a return on investment that is not driven by utilization of the product," Frank says.
One of these "pull incentive" concepts is a market entry reward, where regularly installed payments would be given to a company for a period of years after approval of an antibiotic. The payments would be linked to obligations to make sure that the antibiotic is accessible, used appropriately, and produced through a stable supply chain.
"By creating a reward, it pulls products through the pipeline," Frank says.
The new chief medical officer at Kindred Healthcare, with a background in emergency medicine and health plan management, is focused on payer-provider relations and managing costs of care.
Kim Perry, DO, would like to "close the gap" in understanding about the roles of long-term acute care hospitals and inpatient rehabilitation facilities, and bring payers and providers closer together.
Perry is the new senior vice president and chief medical officer of Louisville, Kentucky-based Kindred Healthcare, LLC. Kindred, which has annual revenue of about $3.3 billion, has more than 34,000 employees in 46 states at facilities including 71 long-term acute care hospitals and 22 inpatient rehabilitation hospitals.
Most recently, Perry served for three years as a multistate chief medical officer at UnitedHealthcare, where her responsibilities included initiatives related to clinical affordability, quality of care, population health, and growth. Prior to joining UnitedHealthcare, she worked for nearly a decade at St. Louis-based BJC Healthcare, where her leadership roles included chief of emergency medicine.
Perry received her osteopathic medicine doctorate from A.T. Still University's Kirksville College of Osteopathic Medicine in Kirksville, Missouri.
HealthLeaders spoke with Perry recently to get her perspectives on issues ranging from payer-provider relations to managing costs of care. Following is a lightly edited transcript of that conversation.
HL: Why did you pick emergency medicine as your specialty?
Perry: I like diversity. I like to do different things. When I considered going into emergency medicine, I was drawn by the procedures. I am very hands-on and procedure-driven. I like the challenge of complex patients, and always liked the challenge of not knowing who was coming in.
I wasn't as interested in spending day after day with the same patient because it made me get emotionally attached to patients. In emergency medicine, patients are short term, so emotions are not overwhelming, but you get challenging patients to take care of.
I also like to partner with teams—care management teams and other physicians. I don't like to be a solo person. I like to collaborate with a lot of other people, and emergency medicine offers that.
HL: How will your background in emergency medicine and health plan management help you as the new CMO at Kindred?
Perry: In addition to emergency medicine, I have done a lot of things. I have been a chief of emergency medicine. I have been a dean of clinical education. I have been in managed care organizations, where I got to know several of the issues that providers were having. As the chief medical officer at UnitedHealthcare over the past three years, my role was to develop relationships with providers and hospitals. The managed care background is going to be particularly helpful at Kindred.
HL: Why is your managed care background valuable in your new role at Kindred?
Perry: Kindred was wise to seek a chief medical officer with managed care experience. Managed care is growing—it's definitely in the Medicare and Medicaid realms but also in the commercial realm with accountable care organizations. We're basically moving from fee-for-service to value. Under value-based care, you can't just provide services—you have to provide care well and meet quality measures and meet evidence-based measures. Having the knowledge of what that means to the payer is helpful to the provider. Kindred is a provider and I have insight into what the payers are looking for in a partnership and what value means to them. I'm trying to bring them closer together.
HL: Payers and providers have historically had an adversarial relationship. How do you bridge the gap between payers and providers?
Perry: We need to work with the payers and show what Kindred can do for health plan members. With our patients, we often focus on the total cost of care and chronic disease management. At Kindred, we take care of medically complex patients on a day-to-day basis.
It may be a little more expensive upfront than having a patient stay in a short-term acute care facility, but our focus is total cost of care. So, within 30 days, within 90 days, or within a year, we provide care to keep health plan members healthier and reduce total cost of care.
We get patients functionally and medically stable enough to be successful at home. And we help with chronic condition management—we get patients to the point where they can be independent or be at a lower level of care. We also make sure patients are strong enough that they do not have a fall or any other incident in the first year of care that could cause them to have to go to a higher level of care or have an expensive intervention. So, we just don't take care of an episode of care and let the patient go. They become part of our family, and we keep an eye on them for years.
HL: What are your top goals as CMO at Kindred?
Perry: I have two major goals that I am focused on currently.
First is to improve relationships such as relationships in our patient experience—we want patients to have the best possible experience they can have given the situation. I want to collaborate better with providers—not only hospital providers but also primary care physicians, accountable care organizations, and anyone else who touches patients, so we can work collaboratively with the patients and their lifelong journey. It's not just the episode of care—we used to get paid to provide services, but it's not like that anymore. We have to provide care well, and we have to prove to our patients and our providers that we offer the best services for complex patients.
I also want to improve relationships with the payers. They are more focused now on value and the total cost of care, and we're here to help solve some of those issues for them. We can also help with the more mundane things—care gap closures, making sure women get their mammograms, and other things that complex patients may not follow through and do.
My second goal is to develop a value story for Kindred, both on the rehab side and the long-term hospital side. I want to make sure that people understand what we do, why we do it, and the difference between an acute hospital stay and a long-term acute care facility.
HL: What are the key factors in developing relationships between acute care hospitals and postacute care facilities?
Perry: There are four keys: trust, communication, respect, and mutual understanding of what each of us do. There are still many people in healthcare, including physicians in short-term care hospitals, who do not understand what a long-term acute care hospital or an inpatient rehab facility does, and how they can benefit patients. I want to close that gap.
A big job for me is to educate, communicate, and develop these relationships so that we can get the trust, respect, and understanding to work more collaboratively. All of us—the payers and the providers—want to do the right thing for the patient while being sustainable and reducing the total cost of care. We have to collaborate more, and we have to share data more, and we can only do that when we have trust, communication, respect, and understanding.
Care team factors associated with patient safety include teamwork, a multidisciplinary approach, knowing each other, and openness to questions from staff members.
There are more than a dozen care team factors associated with patient safety on hospital wards for older patients, recent research shows.
The number of Americans over age 65 is expected to double to nearly 100 million by 2060. With multiple chronic conditions and high costs of care at the end of life, older adults have relatively higher healthcare costs compared to younger Americans. In 2010, citizens over age 65 were 13% of the population but accounted for 34% of healthcare spending.
The recent research published in BMJ Quality & Safety features data collected from 70 staff members working on eight hospital wards for older patients, including 23 nurses and 10 doctors. The researchers found there were 14 care team factors that contributed to patient safety on the wards:
Knowing each other
Trust
Multidisciplinary approach
Integratingallied health professionals throughout ward activities
The BMJ Quality & Safety researchers highlighted five of the care team factors:
1. Knowing each other: Familiarity with coworkers helped staff to support each other in providing safe patient care.
"Friendly, personal connections between staff members were perceived to facilitate communication, influence their ability to contribute different perspectives, encourage them to work beyond silos and to be more broadly involved in patient care. The importance of knowing each other was apparent across professional grades and roles regardless of whether staff were permanent or temporary team members," the researchers wrote.
2. Multidisciplinary approach: Establishing a multidisciplinary care team encourages staff to get involved in all aspects of patient care and blurs the lines between care team roles.
"Everyone's contributions were encouraged and valued; staff felt listened to, were actively involved in ward activities and were kept informed of the bigger picture rather than just being told essential information. This created a shared awareness about a patient's care plan and the risks they faced, and it engendered a sense of responsibility towards patients and the team. Positively deviant wards particularly emphasized the importance of involving non-professional staff such as healthcare assistants and domestics in ward activities," the researchers wrote.
3. Integrating ward-based allied health professionals: Most of the wards in the study had allied health professionals such as physiotherapists and occupational therapists assigned to work in single wards. Integration of these staff members into the wider team was associated with higher degrees of patient safety.
For example, two wards created dedicated workspaces to allow therapists to complete all of their tasks such as documentation on the ward, which promoted communication between the allied health professionals and the rest of the staff. Another ward crafted its pharmacist's work schedule to allow participation in daily safety meetings.
4. Teamwork: Working together as a team promoted collaboration between staff from different professional groups and experience levels.
"Staff worked beyond silos contributing to multiple aspects of patient care and they trusted one another's judgments. Although this was considered to make their teams more effective, staff often struggled to describe how, referring to a 'feeling they got' and a lack of distinction between 'them and us,'" the researchers wrote.
5. Openness to questions from staff members: Establishing an open environment for asking questions promotes an emotional lift from being able to approach other staff members without concern.
"This ensured that problems were raised with the wider team and it enabled information to be checked immediately and/or passed on to others without delay. Again, this was apparent across staff grades and professional groups and was particularly evident for new team members such as rotating doctors or student nurses," the researchers wrote.
Traits of successful care teams
Effective care teams that work with older patients achieve a comfort level in working with each other and have shared objectives, the researchers wrote. "Together, some of the findings suggest that staff within positively deviant teams experience high levels of psychological safety (which facilitates interpersonal risk taking) and possess shared mental models (a common understanding of shared goals, roles and how to achieve these)."
The study calls into question patient safety initiatives that focus only on discrete aspects of safety such as ward-level efforts to address specific errors and harm, the researchers wrote. "That focus should also be dedicated to improving the cultural contexts that underpin a range of safety outcomes. Although this proposition is unsurprising, the balance is yet to be struck—healthcare organizations do not typically facilitate relationships, integration and multidisciplinary working as a means to promote safety."
Researchers call for early warning system to improve the care of cancer inpatients.
Several factors are associated with clinical deterioration of hospitalized cancer patients, with implications for patient monitoring, allocation of care resources, testing, and early warning systems, recent research shows.
Hospitalization is a leading contributor to cancer-related healthcare spending. Hospitalizations for cancer involve longer length of stay and higher costs than inpatient care for other conditions.
The recent research published in Journal of Oncology Practice was based on data collected from more than 21,000 hospital admissions at Barnes-Jewish Hospital in St. Louis. Clinical deterioration of cancer patients was defined as a composite of oncology ward death and intensive care unit transfers.
The research features several key data points:
Clinical deterioration of cancer patients was relatively common, at 9.2% of admissions
6.4% of cancer patients admitted to the hospital experienced at least one ICU transfer
2.7% of cancer patients admitted to the hospital died in an oncology ward
Factors associated with clinical deterioration included age, comorbidities, illness severity, emergency admission, bacteremia, and administration of antimicrobials and transfusions
The relatively high rate of clinical deterioration among cancer patients calls for an increased focus on high-risk patients, the researchers wrote. "Our findings suggest that inpatients with active cancer are at increased risk for clinical deterioration. This risk is particularly important, because prior work has shown that patients with cancer who develop critical illness may have worse outcomes than patients without cancer whose health deteriorates similarly."
Identifying cancer patients who are at high risk of clinical deterioration can generate significant care benefits, the researchers wrote. "Identification of patients on the wards before deterioration may offer the opportunity for interventions aimed to prevent ICU transfer, cardiopulmonary arrest, and death. Early intervention has been associated with improved short-term and long-term outcomes among patients with cancer whose health is deteriorating."
Early warning system
Cancer inpatients at high risk for clinical deterioration should be targeted for enhanced monitoring such as telemetry and differential vital sign monitoring, the lead author of the research told HealthLeaders. There are three reasons to establish early warning systems to monitor the health status of cancer inpatients, said Patrick Lyons, MD, a fellow in the Division of Pulmonary and Critical Care Medicine at Washington University School of Medicine, St. Louis, Missouri.
"First, their higher baseline risk means a well-performing early warning system would generate fewer false positive results, which are known to be harmful. Second, some literature suggests that subjective triage of oncology patients is uniquely challenging, so an objective risk prediction score might be able to help with triage. Finally, certain groups oncology patients—especially those with hematologic malignancies and recipients of stem cell transplants—commonly experience reversible deterioration, like sepsis, and ultimately recover good functional status. This suggests that some aspects of their critical illness might be modifiable if caught earlier," he said.
Lyons and his research colleagues are in the process of developing an early warning system for cancer inpatients, he said. "We are working to create an oncology early warning system and intend to test its performance, issues related to implementation and workflow integration, and ultimately patient outcomes. So, I am hopeful that our work will help develop a broad field of inquiry into how best to deliver inpatient care to such an important patient population."
Top areas where AI can have a significant effect on primary care include risk prevention and intervention, population health management, and device integration.
Artificial intelligence (AI) is poised to have a transformative impact on primary care, a recent journal article says.
AI technology is starting to be applied across the healthcare sector, including digital clinical decision support tools and natural language processing. With more than 500 million patient visits annually, primary care is a prime area for AI to have a revolutionary effect on healthcare.
"Primary care is where the power, opportunity, and future of AI are most likely to be realized in the broadest and most ambitious scale," the authors of the recent article in Journal of General Internal Medicine (JGIM) wrote.
The journal article identifies 10 primary care areas where AI is either already generating benefits or expected to gain traction.
1. Risk prevention and intervention: Potentially preventable medical conditions account for $1 in every $10 of hospital spending, so millions of hospital stays and billions of dollars in care costs could be avoided with better risk prediction and interventions in the primary care setting. For example, Phoenix-based Banner Health is using BaseHealth AI technology to predict risk for 42 health conditions to reduce emergency room and hospital utilization through primary care interventions.
2. Population health management: AI has the potential to identify and close care gaps as well as to improve healthcare providers' performance in quality payment programs such as those established under the Medicare Access and CHIP Reauthorization Act of 2015. For example, IBM and Siemens have established a partnership to develop new population health tools for primary care clinicians using Watson Health AI technology.
3. Medical advice and triage: "AI doctors" can offer medical advice to patients who have common symptoms, which opens up primary care access for more complex cases. Examples of companies that have developed this AI technology include Babylon Health and HealthTap Inc. The JGIM article authors caution that AI doctors should not be deployed to supplant primary care physicians. "Rather than AI replacing real providers for some conditions, we believe that AI support can be integrated into team-based care models that make it easier for primary care physicians to manage a patient panel," they wrote.
4. Risk-adjusted paneling and resourcing: By setting panel sizes according to patient complexity, risk-adjusted paneling can help primary care physicians see patients in an efficient manner, which can boost patient satisfaction and curb physician burnout. For example, University of California-San Francisco is using electronic health record (EHR) data on healthcare utilization to train algorithms that assess primary care panel sizes.
5. Device integration: Nearly a quarter of Americans have wearable devices that collect health data such as vital signs, but this voluminous data is often unwieldy and incompatible with healthcare provider EHRs. AI technology such as Apple's HealthKit has the potential to tame this cumbersome treasure trove of wearable-device data.
6. Digital health coaching: Treatment of chronic illnesses account for most of healthcare spending in the United States, with the cost of care for diabetics alone estimated at more than $300 billion annually. Companies that have developed digital health coaching tools for diabetes, hypertension, and obesity include Glooko, Lark Health, Livongo Health, Omada Health Inc., and Virta Health Corp.
7. Chart review and documentation: EHR clinical documentation is a major factor in physician burnout, causing as much as $140 billion in annual lost physician time. Automatic speech recognition technology is being used at healthcare organizations including Pittsburgh-based UPMC, which has partnered with Microsoft to develop AI-powered digital scribes that can monitor patient-physician conversations and produce clinical notes.
8. Diagnostics: AI algorithms have made inroads for diagnosing several diseases, including skin cancer, breast cancer, colorectal cancer, brain cancer, and cardiac arrhythmias. When deployed in areas of the country that have shortages of medical specialists, these diagnostic technologies have the potential to expand the services provided by primary care physicians. For example, Iowa City-based University of Iowa Health Care is using IDx-DR to detect diabetic retinopathy.
9. Clinical decision-making: Several EHR companies such as industry leaders Epic and Cerner are adding AI to workflows to provide clinicians with digital clinical decision support tools. For example, Nashville-based HCA Healthcare has deployed an EHR-based clinical decision support tool called Sepsis Prediction and Optimization of Therapy (SPOT) that can detect sepsis about 18 hours earlier than the best clinicians.
10. Practice management: AI can automate repetitive clerical tasks that create administrative burdens at primary care practices For example, Olive uses AI technology to automate several clerical tasks, including insurance claims, prior authorizations, billing, and data reporting.
Keys to AI success in healthcare
Successful AI initiatives in primary care augment rather than subvert the physician-patient relationship, the lead author of the JGIM article told HealthLeaders.
"The key is to never lose sight of the patient-provider relationship as the single most important ingredient that makes everything else in healthcare possible," said Steven Lin, MD, vice chief and technology innovation medical director at Stanford Family Medicine, and executive director, Stanford Medical Scribe Fellowship, Division of Primary Care and Population Health, Stanford University School of Medicine, in Palo Alto, California.
"Technology like AI can help strengthen that relationship if it serves to free up providers' cognitive and emotional capacity to connect with their patients, such as relieving them of the burden of clinical documentation or supporting clinical decision-making to reduce decision fatigue," he said.
It is also crucial for healthcare organizations to try to ensure that primary care patients accept AI innovations, Lin said.
"Patients need to trust that AI is not replacing part of their care, and that they are still being cared for by human providers who know them and care deeply about them. AI should be introduced as an additional member of their care team, not replacing anyone already on it. AI should be invisible or in the background, helping human providers become more efficient and giving them more capacity for face-to-face time."
To remain financially viable, all health systems must generate a positive operating margin to reinvest in their organization, which can pose challenges to nonprofits from a mission perspective.
"There is natural tension with being a nonprofit and being able to maintain the organizational vitality to further our mission," says CFO Rob McMurray, MBA, CPA, of Wilmington, Delaware-based Christiana Care Health System.
While operating margin targets are in a "constant state of flux" depending on the capital needs of any given year, Christiana Care must generate a positive margin year to year, McMurray says.
"We know that we want to maintain a margin that will provide us with the resources to continue to invest in our infrastructure to deliver optimal services. And we need to continue to invest and develop the people who will lead us in our strategic aims as well as continue to invest in innovative tools and strategic partnerships. It requires a certain margin to do those things," he says.
The necessity to post a positive operating margin can be a hard sell to board members who are laser-focused on nonprofit status, McMurray says. However, Christiana Care's board recognizes the importance of both fulfilling the nonprofit mission and business needs. "We spend a lot of time educating the board and ensuring that we have a board with the proper level of sophistication to understand how our business strategies support our mission. It's critical."
Mary Ann Freas, senior vice president and CFO of Southwest General Health Center in Middleburg Heights, Ohio, says the financial reality of operating a hospital "muddies the water" at nonprofit organizations.
"I'm the CFO. I'm always worried about making sure we have the resources available to stay viable, to make sure we have a steady workforce, to have the ability to reinvest, and to do all the things that are necessary to maintain ourselves in perpetuity. I know that means my revenues must exceed my expenses."
"It gets fuzzy and it gets confusing trying to explain this to caregivers if I'm asking to cut their budget, or to live with the same budget they had last year. Reimbursement is not growing; if anything, it's flat or declining from year to year, so we have to become more efficient. Sometimes, it's a hard equation to articulate," she says.
Depending on patient volume, which varies from year to year, Freas says Southwest General sets an operating margin target from 2.5% to 4.0%. Meeting those targets can lead to hard choices and pointed conversations.
"Sometimes, I challenge some of the resources that clinical leaders want to bring on board. We can't be everything to everybody. There's more clarity in the for-profit world. They can say, ‘This is our business, and this is how we're going to do it.'"
Three strategies have helped Southwest General generate positive operating margins, says Freas.
First, Southwest General has a large outpatient footprint, including ambulatory facilities in Middleburg and Strongsville, Ohio, that feature physician offices and outpatient services. "That strategy has allowed Southwest to grow its outpatient revenues to a level that is nearly two-thirds of the total," she says.
Second, Freas says Southwest General's employed physician group has contributed to the organization's financial success. Third, Southwest General has made steady investments in new services such as hyperbaric wound care and outpatient physical medicine, she says.
Banking on growth
Growth has always been important at for-profit health systems because investors demand it, but growth has become equally essential at nonprofit health systems in recent years, says Paul Keckley, managing editor of The Keckley Report in Washington, D.C., and former executive director of the Center for Health Solutions at New York–based Deloitte.
"Even in a community where you are the only game in town, the declining reimbursement rates for your core services require you to find new sources of revenue to create any kind of operating margin," Keckley says.
While nonprofit and for-profit hospitals are engaged in the same fundamental activity—patient care—tax status leads to divergent approaches to strategy and governance.
Tax status is one of the most significant defining characteristics of U.S. hospitals. There are more than 5,200 nonfederal, short-term general, and other special hospitals in the country, according to the American Hospital Association. Nearly 3,000 of these hospitals are nonprofits, more than 1,300 are for-profits, and almost 1,000 are state and local government organizations.
"With the caveat that there is a wide range of nonprofits and the investor-owned hospitals vary from company to company, I have been involved in strategic planning for both, and there are substantial differences. You can't overstate the significance of the difference," says Paul Keckley, PhD, managing editor of The Keckley Report in Washington, D.C., and former executive director of the Center for Health Solutions at New York-based Deloitte.
HealthLeaders talked to several executives and representatives of nonprofit and for-profit healthcare organizations to learn about the three primary differences in strategy and governance between nonprofit and for-profit hospitals: relationships with the communities they serve, the level of leanness in their operating models, and the time horizon of their strategic plans.
1. Community-driven approach
Southwest General Health Center, which features a 350-bed nonprofit hospital in Middleburg Heights, Ohio, is literally rooted in the local communities it serves.
Six communities founded Southwest General in 1920 after a post–World War I flu epidemic, says Mary Ann Freas, senior vice president and CFO. "The residents had seen many of their neighbors die while they were being transported to the nearest Cleveland hospital."
The six communities raised $100,000 in 10 days and built a 32-bed hospital.
"Ever since, we have been invested in serving our local communities. It is reflected in our governance, and it is reflected in our strategic plan as well. You can have for-profits that move in and out of communities on the perception of whether the communities need them or not. At Southwest General, there is a specific governance structure in place to make sure that's never going to happen," Freas says.
Southwest General has two governing boards—a 34-member health system board and a 24-member health center board that focuses on the organization's hospital. Four trustees drawn from each of the six taxing districts dominate the health system board, which also appoints half of the members on the health center board. In each of the six communities, local delegates appoint three out of four of the health system board trustees that represent their city or town.
In addition to the 24 health system board trustees drawn from the taxing districts, there are eight at-large board members drawn from the local communities, the past president of the medical staff, and one medical staff physician.
"These board members are truly local. They may be local business leaders, school district superintendents, the local college president, and people … who have been involved heavily in fundraising for their local school system," Freas says.
The delegates are community leaders who play a vital role in keeping Southwest General a locally focused organization, she says. "Fifty-one percent of them have to approve any change to the code of regulations, and they only meet once a year. So, for them to be educated in terms of why we would want to make a change would be a challenge. It has been attempted—some minor things have gone through. But to put forth a wholesale change to our governance structure would be a very big undertaking."
The community-based governance has had an impact on the kind of services that Southwest General provides, Freas says.
"This structure preserves the community's interest in having their care local. If we have patients who need quaternary care, they are transferred to University Hospitals in Cleveland, with whom we have a partnership. But we have two surgical robots, we do open heart surgery, and we have radiation therapy. We have the full gamut of services, and we can provide a high level of care here in the community," she says.
In contrast, for-profit health system boards tend to be a blend of investor representatives and community leaders.
At Nashville-based HCA Healthcare Inc., a for-profit health system with more than 180 hospitals, the chairman of the board is Thomas F. Frist III, founder and managing principal of Frist Capital LLC, a Nashville investment firm.
Other members of the HCA board include Nancy-Ann DeParle, a partner at New York-based Consonance Capital Partners, a private equity firm that invests in healthcare companies. Charles O. Holliday Jr., chairman of Royal Dutch Shell PLC, which is headquartered in The Hague, the Netherlands, is also on the board.
Truman Medical Centers, a safety-net healthcare organization based in Kansas City, Missouri, is firmly linked to the communities it serves, says CFO Allen Johnson, CPA.
"We are more community-driven than a for-profit model, which is more driven by the ability to derive financial benefits to shareholders. Because we are more community-driven, our strategic plan is more oriented to community-based programs," he says.
For example, Truman Medical Centers has been entering into community partnerships to expand its primary care footprint. "We opened a new clinic that is connected to a community-based YMCA, and we are going to invest in another clinic with the YMCA," Johnson says.
In addition to local imperatives to be community-oriented, the Internal Revenue Service requires nonprofits to have a local focus in their strategic planning, Freas says.
"We are required to develop a community needs assessment, and we reference that assessment in our strategic plan. We have a whole section in that strategic plan centered on partnerships. This is to develop partnerships with other community entities—schools, businesses, and the taxing-district communities. We work together to target needs that have been identified in the assessment," she says.
2. For-profits' lean advantage
In the current era of declining or flat-leveled reimbursement from major payers such as Medicare, lean operating models are a distinct strategic advantage at for-profit healthcare organizations, says the leader of the investor-owned hospitals' national trade association.
"There is no question that the financial and revenue cycle aspects of the investor-owned sector hospitals is their sweet spot. They do a wonderful job in a complex environment. The companies we represent have generally found the balance between centralizing much of the paperwork for groups of hospitals, as well as making sure that the right kind of collection information and other tools are used at their individual hospitals. It has been an advantage for us," says Charles N. "Chip" Kahn III, president and CEO of the Washington, D.C.–based Federation of American Hospitals.
Cost-consciousness is a hallmark of for-profit health systems, Keckley says. "If you have a lower cost structure in this environment, it's an advantage. Period. And that tends to be an advantage that the investor-owned health systems have. In most markets, they operate cheaper."
One cost-conscious strategy pursued at for-profits is to shy away from offering tertiary and quaternary care in many markets, Keckley says.
"In some markets, you will find that the investor-owned hospitals have clinical programs like neonatal intensive care units, organ transplants, and burn units, but it's rare. That's because those programs tend to have operating losses. So, the cost structure at the investor-owned hospitals is typically lower because they tend to operate efficiently, they tend to buy in bulk with group purchasing muscle, and they don't do everything that many of the not-for-profits of the same or bigger size do," he says.
For example, Dallas-based Steward Health Care has adopted a community hospital-focused strategy in Massachusetts, essentially ceding tertiary and quaternary care to nonprofit competitors such as Boston-based Partners HealthCare, which features Massachusetts General Hospital as well as Brigham & Women's Hospital.
"There are four big payers in Massachusetts, and you have five big academic medical centers that were fighting among themselves. So, Steward had an interesting strategy," Keckley says.
There are examples of for-profits that buck this trend, Kahn says.
"Every market is different. Tenet has the Detroit Medical Center. HCA Healthcare has hospitals in Dallas that provide tertiary care. Beyond those Dallas hospitals, HCA Healthcare has a strategy across its hospitals to become the largest provider of graduate medical education in the country. This year, HCA has 4,000 residents," he says.
3. Short-term vs. long-term outlook
Compared to nonprofit health systems, for-profit organizations tend to have less tolerance for member hospitals that struggle financially, Keckley says.
"What's clear about the investor-owned world is they are in the asset management business, and when they can no longer generate a return on an asset, they will change. They will dispose of the asset, they will sell the company, or they will find another line of business. In the not-for-profit world, making bold changes is harder," he says.
Nonprofit health systems have more of a long-term strategic approach to struggling hospitals, says CFO Rob McMurray, MBA, CPA, at Wilmington, Delaware-based Christiana Care Health System.
"In a for-profit business, there is a greater focus on shorter- or nearer-term profitability. Whereas, in a not-for-profit organization, there is a greater focus on the long-term organizational vitality of the health system that is serving the community. As a result, the not-for-profit organizations are going to be more likely to accept short-term losses, with the understanding that there are going to be long-term positive benefits to the community," he says.
The long-term view prevalent at nonprofit health systems also applies to investment strategies, McMurray says.
"The nonprofit healthcare organizations are more likely to invest into the community that they serve, with a longer-term and more nontraditional view of return on investment," he says. "A nonprofit healthcare organization is more likely to invest money into programs that may not provide a return in the near term and, in the long term, ultimately provide a return that is aligned with the mission of the organization."
For example, Christiana Care recently made a $1 million commitment to the REACH Riverside Development Corporation, which is working to invigorate a struggling neighborhood in the health system's core service area.
"It's a local, nonprofit, community-based organization in one of the most impoverished neighborhoods of Wilmington, Delaware, which is the primary community that we serve. This group is supported by a combination of nonprofit, government, and community organizations. It is designed to address the needs of the local neighborhood, and it is led through a high level of community engagement. Our contribution will help provide REACH with the resources necessary to meet the needs of this neighborhood," McMurray says.
The investment in REACH reflects Christiana Care's commitment to the communities that the health system serves, he says. "Nonprofits have a different focus. We are focused on our community. A for-profit organization can address a community-based mission, but there's just a different focus involved."
Physicians in primary care specialties experienced a relatively high 4.91% increase in median compensation, survey data shows.
In 2018, physician compensation increased significantly and physician productivity rose slightly, according to an American Medical Group Association survey.
The AMGA has been conducting the compensation and productivity survey since 1986. The survey is designed to help medical groups evaluate and compare physician compensation and productivity levels as well as gauge trends. The compensation data can help medical groups make compensation-related decisions.
Median overall physician compensation in 2018 increased 2.92%, compared to a 0.89% increase in 2017. Physician productivity increased 0.29%, compared to a 1.63% decrease in 2017.
“The 2019 survey shows that physician compensation in 2018 rebounded from a stagnant 2017. While productivity also increased, it did not increase enough to surpass the decline we saw in last year's survey, meaning productivity still has not risen since 2016," AMGA Consulting President Fred Horton, MHA, said in a prepared statement.
The survey data, which was collected from 272 medical groups that employ more than 117,000 providers, includes several key data points:
Median compensation for primary care specialties rose 4.91% in 2018, compared to a 0.76% increase in 2017.
Compensation for primary care physician assistants rose 2.50%.
Compensation for primary care nurse practitioners rose 2.92%.
Overall median compensation for other medical specialties increased 3.39%.
Five of the highest specialties for mean compensation were orthopedic surgery, $591,245; gastroenterology, $527,998; general cardiology, $519,964; diagnostic radiology (MD non-interventional) $482,599; and urology, $469,755.
Five of the lowest specialties for mean compensation were urgent care, 283,787; internal medicine hospitalists, $293,252; neurology, $310,518; general obstetrics/gynecology, $340,388; and emergency medicine, $363,201.
To set physician base salaries, 93% of survey respondents said they relied on market salary data.
The use of work RVUs remained the dominant measure of productivity determining pay, at 79% of survey respondents. A work relative value unit is a non-monetary unit of measure that indicates the professional value of services provided by a clinician.
Other than productivity, the top five components of determining compensation were patient satisfaction, clinical quality and outcomes, citizenship, patient access measures, and care coordination.
Interpreting the data
The increase in overall compensation could have been an effort to offset the low compensation increase in 2017, Horton told HealthLeaders.
"Yearly compensation increases are approximate to standard 'cost of living' adjustments for physicians, so we expect to see them occur every year. In 2017, providers only saw an increase of 0.89%, which is well below the 2% to 3% we had seen in years prior. The 2.9% increase in 2018 is within the 'normal' range, albeit at the upper end. It may be that organizations in 2018 were attempting to compensate providers for a stagnant compensation increase in 2017," he said.
Supply-and-demand economics drove 2018 compensation higher for primary care specialties, Horton said. "The healthcare industry is currently experiencing a shortage of primary care physicians, so the demand for primary care is driving higher compensation."
The aging physician population is a major contributing factor to low productivity in recent years, he said. "In 2018, our survey showed there were more physicians over the age of 55 and nearing retirement than ever before in the history of this survey. Physicians at the beginning of their careers tend not to produce as much as those at the end of their career."
Three other factors likely contributed to low productivity in 2018, Horton said. "Employers are placing more of an emphasis on addressing burnout and lifestyle issues, which contributes to lower production. Physician assistants, nurse practitioners, and some other non-physician providers are starting to take on their own panel of patients, lessening the need for physician involvement. Burdensome electronic health record use is another factor contributing to productivity inhibition."
The 2018 data and information collected this year indicate trends for 2019 compensation and productivity, he said. "Thus far, we have seen no signs that indicate compensation will go above or below the 2% to 3% increase we typically see. We also do not expect to see significant increases in productivity, given ongoing retirements."
Residents report that the impacts of being bullied include feeling depressed and burned out.
Bullying of medical residents is a significant concern, new research shows.
Widespread burnout among clinicians and other medical staff has raised alarm about the mental health of healthcare professionals. Recent research indicates that nearly half of physicians are experiencing burnout symptoms, and a study published last October found that burnout increases the odds of physician involvement in patient safety incidents, unprofessionalism, and lower patient satisfaction.
New research published by the Journal of the American Medical Association includes a dire warning from the article's authors: "Bullying during medical education can have negative consequences that range from the well-being of the trainees to compromised patient care."
The JAMA research is based on data collected from the Internal Medicine In-Training Examination, a self-assessment exam administered annually to internal medicine residents by the American College of Physicians. In 2016, the examination included a brief survey on bullying during residency training, and the JAMA researchers analyzed data from more than 21,000 trainees who participated in the survey.
In the survey, bullying was defined as harassment on more than one occasion by someone in a position of greater power.
The JAMA research features several key data points:
13.6% of the survey respondents reported being subjected to bullying since the beginning of their residency training
Verbal harassment was the most common form of bullying reported (80%), followed by the "other" category (25%), physical harassment (5.3%), and sexual harassment (3.6%)
The most common impacts of bullying were feeling burned out (57%), diminished professional performance (39%), and depression (27%)
Four resident characteristics were associated with those trainees who reported being bullied: having a native language other than English, high postgraduate year level, being an international medical graduate, and posting a relatively low rating for the Internal Medicine In-Training Examination
A broader definition of bullying would have resulted in higher levels of reported bullying, the researchers wrote. "The bullying estimates in this study most likely represent an underestimate of mistreatment because less consequential hassling or microaggressions by superiors and harassment by those of equal or less power would not have been counted."
Interpreting the findings
Discrimination is a likely factor in the bullying of medical residents, the lead author of the research told HealthLeaders.
"Our research supports previous studies that note that international medical graduates are more likely to be bullied than those graduating from U.S. medical schools. A perhaps related observation is the independent association between reported native language and perceived bullying, which may in part be due to bias and stereotyping," said Manasa Ayyala, MD, an assistant professor of medicine in the Department of Medicine at Rutgers New Jersey Medical School in Newark.
It is unclear whether bullying during residency sets the stage for burnout and depression later in physicians' careers, she said. "Additional research is needed regarding longer-term sequelae experienced by residents who perceived bullying and reported burnout and depression as consequences. However, it is definitely concerning that such significant consequences starting in residency could affect one's future career."
Although further research is necessary, medical educators should step up efforts to curb bullying of medical residents, Ayyala said.
"To start addressing bullying, educational leaders and training program directors need to be aware that bullying is a significant problem in medical education and work toward creating effective reporting structures where trainees feel empowered to report bullying. Further research is also needed to effectively inform strategies and programs that will aim to reduce bullying of medical trainees."
The CMO of Cardinal Analytx shares the keys to addressing chronic illnesses, investing in social determinants of health, and reducing healthcare costs.
Chris DeRienzo, MD, wants to bend the trajectory of human diseases in a positive direction to improve lives and contain the country's unsustainable increasing healthcare costs.
As the American population ages with the maturation of the baby boomer generation, the prevalence of chronic conditions is expected to swell and exert upward pressure on healthcare spending, which is already approaching a burdensome one-fifth of the country's gross domestic product.
DeRienzo is the chief medical officer at Cardinal Analytx Solutions in Palo Alto, California, and an adjunct professor at the Stanford Medicine Clinical Excellence Research Center in Stanford, California. Cardinal Analytx is applying artificial intelligence to improve healthcare outcomes while containing costs.
The author of the book Tiny Medicine: One Doctor's Biggest Lessons From His Smallest Patients, DeRienzo specialized in neonatology after graduating from Duke University School of Medicine. Prior to joining Cardinal Analytx, he served in two roles at Asheville, North Carolina–based Mission Health: system chief quality officer, and chief patient safety officer and vice president.
HealthLeaders spoke with DeRienzo recently to get his perspectives on treating chronic illness, cost containment, and healthcare reform. Following is a lightly edited transcript of that conversation.
HL: Why did you pick neonatology as your specialty?
DeRienzo:NICU was at first a hard choice but ultimately an easy choice. I started med school thinking I was going into adult cardiology. But as med school evolved and I went through different rotations, I struggled with caring for adult patients, especially those with preventable conditions. I looked for an area where I could work with patients who were as early in their condition as possible, so I went into pediatrics.
NICU stood out to me because you basically own anything that happens to the child. All of the harm that can occur in the NICU is potentially preventable.
HL: How can healthcare organizations improve the treatment and management of chronic illnesses?
DeRienzo: There are two parts to the equation.
The first is to identify the trajectory of disease as early as possible and try to arrest its downward spiral. For example, with someone showing early signs of kidney disease, the No. 1 area of focus is getting the healthcare system to do a better job of servicing them and connecting the person with a matched intervention that gives the best possible chance at fundamentally changing their trajectory.
You also have to acknowledge that there are many folks who have already progressed in their disease states—whether it's COPD, heart failure, or another condition. Sometimes, their progression is not reversible. For those patients, we need to focus at the minimum on maintaining the condition as it is for as long as possible.
In my current role, I look across health plan claims, and I have seen folks with a variety of COPD. Despite having significant chronic obstructive pulmonary disease, there are some folks who are consistent with their medication regimen, they have stopped smoking, they are seeing a pulmonologist once per year, they are engaged with primary care, and they are doing spirometry testing—that kind of care coordination with someone who has a chronic condition can maximally help them live their best possible life.
HL: Give an example of an area where there can be a relatively quick ROI for social determinants of health initiatives?
DeRienzo: Transportation is really important, especially for the Medicaid population, which often relies on public transportation. When I ran my own clinic as a resident, transportation was one of the primary drivers of patients and their parents not being able to come to appointments. Certainly, there is an ROI for transportation.
Once you get into things like housing, it gets to be more challenging. It has to be under the right risk-sharing or revenue model that allows those investments to drive improvements in health, reduce healthcare utilization, and be sustainable for everyone involved.
HL: At this summer's HealthLeaders Innovation Exchange, you discussed the concept of "newly high-cost patients." Why is it important to effectively manage those kinds of patients?
DeRienzo: One of the reasons why I joined Cardinal Analytx is that when I looked at the universe of managing cost in healthcare, it had previously been divided in half. There were many people who were generally well and generally low-cost. There were other people who were generally not well and generally high-cost. The thought process was that the people who were generally well did not need much engagement, and that the people who were already high-acuity and high-cost required the most interventions that we could give them.
The problem with conceptualizing people in those two halves is that some people rise in cost, then revert to the mean. And some people who look well are about to fall off a health cliff.
The concept of the rising risk of the newly high-cost patient is new, but it is just as real as the patients who rise in cost then revert to the mean.
With an AI-enabled solution to find those newly high-cost folks, we can try to understand why they are going to fall off a health cliff and why their health costs are going to rise. Then we need to connect them with an intervention that can change their trajectory. If we can do that, we are not only changing people's lives but also dramatically changing the financial sustainability of managing population health.
For example, you can have someone with COPD who has generated $4,000 worth of healthcare costs this year, then rises to more than $30,000 in costs next year. If we can connect with that person, understand what is going on in his or her life, and see that they have had COPD and have been to the urgent care twice, we can intervene. We can get them on a consistent medication regimen. We can engage them with primary care. And we can connect the person with interventions that we know work.
Instead of rising to $30,000 in costs next year, maybe the patient will only go up to $5,000, or even go down to $2,000. If we can replicate that process over and over across our country's population, we would have a huge bend in the healthcare cost curve in the short-term that would compound year over year.
The Innovation Exchange is one of six healthcare thought-leadership and networking events that HealthLeaders holds annually. While the events are invitation-only, qualified healthcare executives, director-level and above, will be considered. To inquire about the HealthLeaders Exchange program, email us at exchange@healthleadersmedia.com.
Photo credit: Pictured above: Chris DeRienzo, MD, CMO at Palo Alto, California–based Cardinal Analytx Solutions and an adjunct professor at Stanford University, makes a point at this summer's HealthLeaders Innovation Exchange. (Photo: David Hartig)
