A provision of the stimulus bill signed last month by President Barack Obama may give the growing ranks of unemployed workers some relief with their medical bills. Under the American Recovery and Reinvestment Act, those who were laid off since last fall may be eligible for a 65% subsidy to pay for COBRA.
Your hospital is losing millions. You can't purchase new equipment or update aging facilities. Your endowments have dried up, and you may have to cut services and lay off employees—if you haven't already. Welcome to the life of a hospital executive in 2009.
The news isn't all bad, however. This recession may be the perfect time to reinvent your health system. Your entire organization—nurses, physicians, security, housekeeping, administration, etc.—is on the same page because the economic crisis hasn't happened in isolation. It's not just the hospital's finances that have been affected. Employees' investment accounts—401(k), college funds, and retirement savings—have taken a huge hit, people can't sell their homes, and unemployment rates are above 8%. Everyone understands these are challenging times and some sacrifices will need to be made. For example, employees at a teaching hospital in Boston recently volunteered to give up raises and forfeit past accruals of earned time to avoid a massive layoff of 600 employees. Their efforts have spared 450 of the 600 jobs.
Senior executives have the rare opportunity to lead an organization that is joined by a spirit of commonality. No one wants their coworkers to be laid off or the hospital to cut mission-critical services. As a result, people are more receptive to change, says Tami Merryman, chief quality officer at the University of Pittsburgh Medical Center. It's not uncommon for healthcare workers to resist changing a process even if the end goal is to be more efficient and cost effective simply because that is the way they have always done it. People don't like change. The recession has changed that mindset, however. People are far more willing to change behavior and inefficient processes if it can reduce costs and help the organization avoid staff cuts or limiting services. "The emotional bar of change has moved as a result of the recession," says Merryman.
For example, physicians are more open to standardizing clinical processes that can help the organization be more efficient, she says. It's opened a door that otherwise may have been closed. That doesn't mean a consensus will automatically emerge. But hospitals aren't spinning their wheels trying to convince key stakeholders that action is needed, says Bill Hejna, a senior principal with the consulting firm Noblis Center for Health Innovation.
This is quite possibly the best time for healthcare organizations to be innovative. An article in Business Week says entrepreneurs view the recession as an opportunity to reinvent themselves versus a time to hunker down and ride it out. That is a message healthcare leaders should heed. Garnering support to transform the culture of the organization or change the care delivery process may be easier in today's environment than it has been in years. Staff members are likely to be more supportive and willing to sacrifice their own agendas to help strengthen the organization as a whole.
Before making such big changes, executives should consider two factors:
The grieving process. Employees may need time adjust to the new reality—especially if the organization is refocusing its strategic plan. Projects they held dear may now be off the table and they need to come to terms with that.
Take a broad view. Employees from various parts of the organization should be included in the decision-making process, so they understand why certain choices are being made. Then senior leadership can proceed swiftly without having to rehash why they made a specific decision.
Don't let this recession pass you by. Tapping into this spirit of commonality may help reduce costs, improve quality, and propel your organization into an elite class of innovative healthcare institutions.
Carrie Vaughan is leadership editor with HealthLeaders magazine. She can be reached at cvaughan@healthleadersmedia.com.
Note: You can sign up to receive HealthLeaders Media Corner Office, a free weekly e-newsletter that reports on key management trends and strategies that affect healthcare CEOs and senior leaders.
In 2007, Medicare expenditures reached $440 billion, or 16% of all federal spending. With healthcare reform a high priority for the new administration, any reform initiatives will certainly include approaches to manage the growth of this enormous program. The solution must start with where the majority of the Medicare budget is spent. The last 30 days of a beneficiary's life account for the highest portion of Medicare dollars per member. In fact, one-fourth of the entire Medicare budget is spent in the last year of a patient's life and of that amount, 40% is spent in the last 30 days.
There are also large variations in end-of-life care from one region to another. Researchers at Dartmouth Medical School discovered staggering variations in the number of services that patients with severe chronic disease receive at the end-of-life, depending on the hospital, region, or state. These variations were not dependent on the severity of patients' conditions. For example, an elderly person spent an average of 10.6 days in the hospital during the last two years of life in Bend, OR, but 34.9 days in Manhattan.
There are many reasons for the high proportion of dollars spent and variation in end-of-life care. Over the last several decades, new life-saving and life-prolonging technologies have become available to healthcare providers. These new technologies—such as sophisticated respirators, feeding devices, and pharmaceutical products—have the ability to keep patients alive longer, albeit sometimes in a vegetative state. Their impact on the patient's quality of life is still questionable, and it is widely accepted that many patients receive more services at the end-of-life than they need or want.
Further complicating this matter is that the reimbursement system provides incentives for healthcare professionals to impart more end-of-life care than necessary, even though the patient's health status and quality of care may not be improved. Variations in end-of-life care across different regions can be explained, to a great degree, by differing reimbursement rates across the country and the extent of—or lack of—end-of-life care planning. The major reason for high cost, unnecessary, and often-unwanted health services is that a patient's choice for types of treatment at the end-of-life are rarely clearly documented and respected.
Clearly documented advance directives can help ensure that patient choices for end-of-life treatment are honored and that unnecessary, unwanted healthcare services are avoided. Federal legislation was passed in 1990 to affirm patients' rights to document these end-of-life wishes and designate a healthcare decision maker, should they be unable to speak for themselves. This legislation, the Patient Self Determination Act of 1990, requires hospitals to ask all patients at time of admission about their advance directives.
Despite passage of this legislation, only 15% to 20% of patients have an advance directive, according to an article in the Archives of Internal Medicine. Further, even when patients have an advance directive, 65% to 76% of physicians were unaware of these patient choices. Consequently, people end up getting healthcare services in the last days of life that they would not have wanted.
Statistics show that 80% of people in the United States die in a hospital or nursing home bed, even though Gallup polls show that 90% of those surveyed would prefer to die at home. Why are patient's choices regarding their end-of-life care still not being met?
Regardless of the specifics of an end-of-life experience, there is often tremendous confusion around the episode. Family members do not know that an advance directive exists for their loved one. If the patient is incapacitated, the person or people named as the healthcare surrogate(s) may not understand their role in the decision making process. An example of the heartache that can ensue is the infamous Terry Schiavo case, in which the conflict about her care, between the husband and the parents of the patient, lasted for years and was only resolved by the courts.
Some patients may have advance directives, but fail to inform hospitals about them or don't bring them to the hospital. In these cases family members often don't know where the documents are located, or it may be stored in a safe deposit box to which no access is available. Most disturbing is that even when advance directives are given to healthcare providers, the clinicians are sometimes afraid to recognize them because of vocal and emotional disagreements among the patient's family or out of fear of lawsuits.
So what is the solution? New legislation is not likely to solve the problems. Legislation has already been passed affirming the government's recognition of the need for proper end-of-life documentation. Solutions to the current deficiencies will be found through better enforcement and execution under the existing legislation. The solutions may be simpler than we think. Here are four key elements:
Promote the value of the advance directive so that all patients, healthy or terminally ill, have a well documented, legally recognized advance directive.
Create a system that makes the advance directive readily available and accessible whenever and wherever the patient may be hospitalized.
Ensure that all people—friends, family, and caregivers—who are likely to be involved in a patient's care are informed about the patient's desires documented in their directive and understand the patient's choices.
Establish a process to ensure that healthcare providers recognize and respect the documented choices. This would include using strong legal interpretation and support services where necessary.
Fortunately, there are resources and organizations available to help provide some of these components. For example, Caring Connections, a nonprofit program of the National Hospice and Palliative Care Organization, provides educational resources to patients about end-of-life care and helps patients and families better plan for this situation.
But it is not enough to simply print out an advance directive from the Internet and keep it in a file cabinet until needed in the future. What is needed is a system that covers all the gaps that exist today, which have traditionally prevented a patient from documenting and receiving the end-of-life care they would desire. This system must:
Provide accurate, up-to-date resources to help patients express their wishes for end-of-life care and authenticate those wishes in legally appropriate documents. In addition, a central, secure repository for these documents should be created, accompanied by the means to inform patients of any changes in state laws that require them to update their directive so that it continues to be legally accurate.
Provide a variety of ways to ensure availability of documents when and where needed, 24/7. Processes should encourage providers to place documents in patient charts and check the central repository to see if a patient has an advance directive.
Provide an easy, yet structured way to help patients communicate and educate various people about their directive, including family, friends, and current caregivers—all of the people who would most likely be involved should their end-of-life episode occur.
Provide provisions that the directive is respected, such as available legal counsel to assist families, should there be confusion or should a healthcare provider be uncertain of the member's documented wishes for end-of-life care.
These solutions would provide significant benefits to patients, their families, and their healthcare providers. Patients can feel confident that wishes for their own healthcare will be respected when they cannot speak for themselves. Families can feel empowered that proper supporting documentation exists to carry out a patient's healthcare wishes. Caregivers can provide care that is truly aligned with the patient's wishes. Not only can unnecessary healthcare services be avoided, but a patient's choices can be respected and honored.
People 75 years and older are the fastest growing segment of the U.S. population; this group is projected to more than quadruple over the next 50 years. A large percentage of this elderly population has chronic diseases that will necessitate appropriate planning for end-of-life care. This fact, combined with the ongoing growth in more expensive technologies, will continue to fuel the increase in healthcare costs. Medicare reform will need to consider comprehensive advance care planning. The benefits of doing so will be seen not only in judicial use of the healthcare dollar, but most importantly in respecting patients' end-of-life care wishes. What could be more important?
Barry Patel, Pharm.D., is president and co-founder of Total Therapeutic Management, based in Atlanta, GA. He can be reached at bpatel@rxttm.com.For information on how you can contribute to HealthLeaders Media online, please read our Editorial Guidelines.
David Blumenthal, a Harvard Medical professor and director of the Institute for Health Policy at Massachusetts General Hospital has been named national coordinator for health information technology by the Obama administration. Blumenthal will be in charge of nearly $20 billion in economic stimulus funds slated for building health IT. His post will also involve encouraging more doctors and hospitals to use computers.
House Democrats, in consultation with the White House, will give Republican lawmakers until September to reach a compromise on President Obama's signature healthcare initiative, or they will use a shortcut to move the measure through Congress without Republican votes. After meeting with senior White House officials, House Democratic leaders decided to include the shortcut in the budget proposal they will unveil next week, congressional sources said. Known as budget reconciliation, the shortcut would permit lawmakers to roll Obama's healthcare proposals into a bill that cannot be filibustered.
Pink slips would go out to more than 400 employees at the Cleveland Clinic if a franchise fee costing Ohio hospitals $410 million remains in Gov. Ted Strickland's two-year budget proposal, a top Clinic official told lawmakers. "If this fee goes through without any adjustment, we really don't see any recourse but to eliminate jobs, and based on the fee, the elimination of jobs would amount to somewhere in excess of 400," said Oliver Henkel, chief government relations officer. Henkel told lawmakers that the proposed franchise fee would cost the Clinic alone more than $40 million over the next two years.
New York City's public hospital system has announced that it was cutting 400 jobs and closing some children's mental-health programs, pharmacies, and community clinics that serve more than 11,000 patients. Alan D. Aviles, president of the city's Health and Hospitals Corporation, blamed reductions in state Medicaid reimbursement, a sharp increase in uninsured patients and the rising cost of labor, drugs, and medical supplies for the cuts. He warned that he would probably announce further job and service cuts in a month or two. The hospitals face a looming $316 million budget shortfall for the coming fiscal year, and the current plan would save $105 million.
The heads of 13 medical departments at Boston-based Beth Israel Deaconess Medical Center said they would collectively donate $350,000 to the Boston hospital in an effort to further reduce planned staff layoffs. They are also calling on hundreds of other doctors affiliated with Beth Israel Deaconess to donate money as a way to save colleagues' jobs. Beth Israel Deaconess said it is facing a $20 million loss in the current fiscal year, and would be looking at cost-cutting measures including layoffs.
University of California regents have expressed support and financial trepidation about a proposal that the university play a key role in reopening Martin Luther King Jr. Hospital near Watts in 2012. Several regents said they want ironclad assurances from Los Angeles County supervisors and state officials that UC would not be held responsible for any costs or liabilities for what is expected to be a 120-bed facility with an emergency room. The hospital, which once had 233 beds, was shut down in August 2007 after repeated failures in patient care.
David Blumenthal, MD, a former Harvard Medical School professor who has advised Sen. Edward Kennedy and one-time Democratic presidential candidate Michael Dukakis, will lead health information technology efforts for the Obama administration. The Health and Human Services Department announced the selection of Blumenthal as national coordinator for health information technology in a news release. Blumenthal was also a senior adviser to President Barack Obama's presidential campaign.
