The head of Texas Medical Center is concentrating on building out five institutes focused on areas of collaboration in innovation, health policy, clinical research, regenerative medicine, and genomics.
Since coming to Texas Medical Center from Stanford in 2012, Robert C. Robbins, MD, has staked his leadership on collaboration among the 56 independent member institutions in the Houston complex of healthcare facilities.
TMC faces challenges to collaboration, given that members also compete against each other fiercely in the Houston market, says Robbins, a renowned cardiac surgeon.
Robbins' top priority is harnessing the combined capabilities of all members. He's concentrating on building out five institutes focused on areas of collaboration—innovation, health policy, clinical research, regenerative medicine, and genomics.
Robbins spoke with HealthLeaders Media about his vision for TMC, how he plans to reach his collaboration goals, and his role in the process. The following conversation has been lightly edited.
HLM: TMC is governed by many independent institutions. How do you lead an organization like that?
Robbins: Most people don't understand how it works, and there's no good analog or comparable institution.
It's stated in the TMC bylaws is that if you accept the land, you must collaborate with the other institutions around the concept of improving the health of Houstonians, Texans, Americans, and the world. We're returning to that.
To use a sports analogy, the leaders from all the member institutions were asking for a general manager so they could focus on the coaching of their own institutions, and they were asking for a guy like me who could help lead them in the areas where they can work together.
HLM:Cross-institutional collaboration is one of your favorite initiatives. What forms does that take at TMC?
Robbins: I was brought in to focus on programmatic infrastructure. With all this activity, what we've lacked was translating fundamental discoveries into new drugs, devices and digital platforms.
The most important development at the medical center is our transitional research campus that we call TMC3, which consists of research buildings with an iconic double helix design, featuring cutting-edge research on imaging, genomic sequencing, and bioinformatics, among other initiatives.
The campus will have a hotel conference center and enough space so companies like IBM, Google, Johnson & Johnson, Medtronic, Amgen, and GlaxoSmithKline will build buildings beside our researchers and co-develop new drugs and devices.
HLM:How will TMC help move healthcare toward greater focus on value and safety?
Robbins: We've got the largest clinical operation of any site in the world, and we've got diversity not only in people but also in the type of institutions that make up our membership.
MD Anderson is totally focused on cancer, Texas Heart Institute is focused on the heart, LBJ (Harris Health System) is focused on safety net hospitals, and Memorial Hermann has the busiest trauma center [in the U.S.]. One thing they all collaborate on is patient safety and quality.
Memorial Hermann got way out in front with ACO initiatives—they created one of the first of those—and it's the largest single health system in the country that's located only in one city. They realized the game was going to change.
We host Bob Kaplan and Michael Porter in teaching their Executive Education Course on value here at TMC every spring. A lot of sharing goes on there.
HLM:How can organizations historically focused on acute care remain relevant as healthcare moves from acute-care-focused to the so-called nonacute realm?
Robbins: All are realizing that managing readmissions and chronic disease patients, even mental health patients, is critical. We'll double the size of the dedicated academic medical center psychiatric facilities in the next two years.
We've got this project with Apple and one of our startups [that] leverages technology to pull all our data together so we can learn from each other.
It will take our 10 million yearly patient encounters from EMRs and add genomic data, prescription, and buying data, as well as other patient data from wearables—and soon implantables. You get to a point where you realize we can manage these patients at home in many cases and don't need to [treat] them all [on an inpatient basis].
HLM: How should healthcare organizations make sure they're credited for the value they create?
Robbins: Nobody is going to pay for value unless you go at risk for it. No one will pay you for hitting benchmarks on mortality or heart surgery, but they will put in disincentives (penalties). To truly provide quality, you have to be at risk for the patient, and healthcare spending has to be capitated.
The opportunities are vast for healthcare providers to incorporate genetic medicine into their offerings, but so, too, are the challenges. Join the upcoming HealthLeaders Media webcast,Getting Involved in Genetic Medicine with Cleveland Clinic, on February 27 and learn how Cleveland Clinic addresses the logistical, medical, and ethical complexities of this expanding field.
Long populated by dedicated civic leaders, hospital and health system boards such as the one at the Nemours Foundation are reaching out to healthcare leaders with much-needed industry expertise.
A board's mission is to ensure that the organization thrives. What if the best way to achieve that goal requires the board to reconstitute itself?
That's no easy task, because the people who must make the changes could see their own roles diminished or eliminated.
More than ever, health system boards are seeking out members with broad healthcare expertise at the highest level. But recruiting and installing that talent often requires other board members to relinquish power and influence.
Many nonprofit healthcare boards, even at the biggest systems, are community-based, and peopled by dedicated civic leaders. Despite their good intentions, this type of board leadership may no longer work. There is a growing need for board members who bring expertise from other healthcare organizations with experience managing for value.
That's where the board of the Nemours Foundation, which oversees Nemours Children's Health System found itself in 2006 when David Bailey, MD, came aboard as CEO at the health system's Jacksonville, Fla., headquarters.
Wanted: Expertise
"We needed to bring on folks who have an intimate understanding not just of governance, fiduciary responsibility and compliance, and the strategic plan, but also folks who understood the real-world challenges of healthcare today with its evolving consumerism, the impact of technology, and the drive to take care of the health of a population," he says.
Bailey worked closely with his board and the health system has grown from a $500 million net revenue operation a decade ago to a $1.2 billion institution with two children's hospitals and 60 locations in six states today.
Last fall, the Nemours Foundation added four national health leaders to its board:
Linda Norman, dean of the Vanderbilt University School of Nursing and the board's first nurse leader
Valerie Montgomery Rice, MD, president of the Morehouse School of Medicine
Jim Hunt, retired executive vice president and CFO of The Walt Disney Co.
Marc Probst, CIO of Intermountain Healthcare
"It was the right time to bring in more expertise" that could help in guide Nemours "in this uncertain future," says Bailey.
Another way for healthcare organizations, especially non-profits, to find exactly the right expertise is to use a professional recruiter. To land its four newest members, Nemours used an RFP process to select a search firm.
"[The search firm's recruiter] understood what we were after, our corporate values, and seemed to have access to well-placed individuals who could fill our needs," Bailey says. "Within a short time, she had 30 individuals who were very interested and very qualified."
Nemours trustees interviewed the recruits and picked the four who were added in October. The new board members will be paid about $40,000 per year for their service, and are expected to provide a wealth of experience and knowledge from current and prior roles.
Top of Their Game
Bailey says Probst is "extraordinarily knowledgeable in using tech to advance quality, safety, and access," and says his expertise will be instrumental as Nemours relies more on digital technology and the security concerns that accompany that reliance.
"We looked for a specific person who is at top of his game, and Marc's that person," says Bailey. "Every health system faces challenges in how to improve access, cost, and improve the health of the entire population in the markets you're serving. And the folks we brought in each bring a piece of experience to that puzzle."
As legacy Nemours trustees who have served longer than 10 years roll off the board over the next three years, Bailey says new members with national experience and expertise will be brought on to replace them.
The board has about 10 members now, and can max out at 15 or 16 as it expands 'to fit the systems' growing need for expertise.
Giving Back
As for paying a stipend to both new and legacy board members, Bailey says that decision reflects the reality that these experts spend their spare time overseeing the health system.
He calls the price of that expertise' a bargain.
"Most of them go on to contribute at least [the amount of the stipend] back to Nemours through our fund for children's health," he says. "It's almost like a transfer to them and back to us but it is an amount that provides an acknowledgement that they are spending a lot of time with us. In terms of their value in the marketplace, it's a pittance."
Can a clinical standards-based infrastructure that pulls data from all participants finally get at the intersection of cost and quality?
This article first appeared in the January/February 2017 issue of HealthLeaders magazine.
Healthcare has always searched for the holy grail—the disruptive force, construct, or innovation that will make vast and necessary improvements in quality while simultaneously slowing healthcare's rapid cost growth. Yet such a solution has eluded everyone from policymakers to patient advocates to senior healthcare executives.
Big data might be a revolutionary advance in healthcare, but without the right tools and tactics, big data won't provide insights to help improve outcomes and value. It will just be a repository of information that doesn't live up to its potential. Many organizations see big data's possibilities and are betting that the right tools and strategies coupled with an organizational structure that gathers data from disparate parts of the healthcare service universe—otherwise known as clinically integrated networks—will yield big gains in both efficiency and quality.
Organizations certainly don't see big data/CIN arrangements as a panacea. It's a relatively untested strategy to weave together incentivized and symbiotic business relationships without the need for any entity to acquire those assets. So while healthcare's holy grail has not been found and may never be, executives believe CINs hold great promise.
CIN strategy
The intersection of cost and quality might be better called efficiency. And if any industry has ever needed a high dose of efficiency, healthcare is it.
CINs are designed to improve that metric in part by applying standards of care based on a patient's disease state for which clinicians are held accountable. Healthcare organizations are eagerly embracing CINs as a structure that allows efficiency to flourish without the huge cash outlays necessary to acquire healthcare business assets. The strategy is a timely one: Further stratospheric growth in healthcare spending is far from certain, with healthcare expenditures already accounting for 17.5% of U.S. economic activity and growing faster than GDP as a whole. Organizations that can manage efficiency well should be well positioned for slowing growth in the long term.
The CIN mindset is different than the hospital mindset because a CIN requires clinicians to think about the entire care experience, says Katherine Ziegler, a director at healthcare consultancy Navigant Healthcare, in Chicago. She says there are four areas of focus that have the most significant impact on successful CIN development: physician engagement, in-network care coordination, postacute care utilization, and management of pharmacy spending. Overall, Ziegler says organizations can achieve great success if there's agreement around clinical standards and effective incentives or disincentives for following them.
"It becomes a very collaborative effort when you bring clinicians together" around common goals designed around an organization's unique clinical capabilities and strategic goals, as well as the needs of its patient population, she says. Such goals can be as simple as setting up to help patients or their caregivers reconcile medicines or automated reminders for staff to double-check that patients are completing follow-up appointments with their primary care physician or rehab facilities following surgery.
Seth Glickman, MD, is the president and executive medical director at the UNC Health Alliance, a CIN developed by UNC Health Care in Chapel Hill, North Carolina. The UNC Health Alliance debuted in 2015 and now includes approximately 3,000 physicians.
As early as 2013 when Glickman joined UNC Health Care, "we recognized we needed a way to tie together all of the population health efforts across the healthcare system and integrate care among all our providers," he says. The health system soon began planning its CIN in order to integrate among UNC and affiliated community providers and participate in value-based contracts with payers.
"We employ a large number of providers as part of being an academic medical center, but we also work with a number of independent community physicians, so we needed a common approach to delivering care and a mechanism to work in a coordinated fashion with payers who were interested in developing relationships that were based on outcomes and value-based reimbursement," he says.
The process UNC used initially involved a lot of what Glickman calls "work on the ground." That included going to practices, engaging them, and educating them about how healthcare is changing in terms of the transition from fee-for service. Those visits were aimed not only at educating but also at enrolling leaders of those practices, both independent and employed, in the process of being part of the development of the network in a partnership that involved ongoing governance and operations.
To that end, Glickman and his team formed a physician steering committee of 30 individuals, including two hospital executives, from a number of different markets in North Carolina. The committee included equal representation of both employed and independent physicians in both primary care and specialties. Over six months, that group made important strategic decisions about how the CIN would work, ranging from what the governing board should look like, operating agreements, branding, participation agreements, and explicit goals. Currently UNC has about 3,000 physicians who are part of its CIN, of which 2,000 are employed by UNC Health Care, which includes its 1,200-physician faculty as well as the employed UNC Physicians Network made up of mostly primary care clinicians, and 1,000 independent physicians.
John Brennan, MD, executive vice president and chief clinical integration officer at WellStar Health System, is excited about the possibilities of WellStar Clinical Partners, the Atlanta-based health system's CIN, in part because of how it standardizes transitions from one type of care to another, such as from hospital to home or to rehab.
"That's where the most mistakes can occur," he says. For example, during a transition, a needed medication can drop off a patient's prescription list, or one might stay on the list when it isn't needed.
Brennan welcomes the new construct because it makes intuitive sense from a patient perspective. It's also a stark contrast to his medical school experience in the 1980s, where training was focused on subspecialty care, not the big picture.
"At that time, the physician was the captain of the team," he says. "We're now in a place where the physician is an important part of the team, and a leader, but very important information and judgment comes from other people on the team. One of the biggest differences is that the CIN is really patient-centric versus physician-centric."
Savings from high utilizers
CINs are tailored to meet the needs of the broad patient community, and operational standards are developed from that base by clinicians who know the overriding goal is to coordinate effective and efficient care that meets the so-called quadruple aim—Donald Berwick's triple aim of improving the patient experience and the health of populations and reducing the per-capita cost of healthcare, plus improving the experience of providing care. That last element is critical to achieving ever-elusive clinician buy-in, says Brennan.
None of the other elements of the triple aim are achievable without improving the experience of providing care, and part of that involves freeing physicians to spend more time and effort on truly high-risk patients.
"We have to identify and spend resources with a focus on care management on a population in order for CINs to succeed in both the short and long term," says Navigant's Ziegler.
She says this population turns over frequently. In fact, she says, only about 25% of patients who are high cost will continue to be so in the following year, which provides opportunity to improve health if the CIN has the data and tools to identify the so-called pre-high-risk patients in the CIN's population.
"It's a real opportunity if you can get to the pre-high-risk patients, which takes the top off that intensity curve," Ziegler says.
Identifying and acting on that population means fewer patients in the high-risk category, which means less use of resources and less effort to keep people well.
"We start with each CIN by looking at their data," she says. "Just getting data and setting relatively simple goals can make a huge impact."
Glickman agrees that is where the most progress can be made. "We're focusing on the rising risk population and, more generally, earlier stratification of patients where intervention can impact the trajectory of the disease course and the ultimate outcome," he says.
The analytics produced by data collected through the CIN's common EMR allows its clinicians to be more predictive and deploy care management or clinical resources before a patient develops a more severe illness. A good example is UNC Health Alliance's wound care for patients with diabetes. "The earlier you can identify an issue and use effective clinical care, the better outcome that patient will have," says Glickman.
He suggests thinking of the risk pool as a triangle. At the top of the triangle are patients with the most significant, most severe disease. These represent 20% of the CIN's population but 70% of the costs. Just below the tip of the triangle are the rising-risk patients.
Using the diabetes example, patients with the disease but no complications occupy the middle of the triangle. Interventions can keep them from moving up.
"If you're working with patients and monitoring whether their A1C levels stay in a normal range, the rate of people who will experience a stroke significantly decreases, so you've prevented huge cost by preventing them from having that stroke," says WellStar's Brennan.
"To affect this in the long term, you have to take care of the rising risk and prevent them from becoming a high utilizer."
Those leading nascent CINs need to manage the initial engagement of physician practices, educating them about how healthcare is transitioning from fee-for-service to value-based reimbursement, Glickman says. Most important, CIN leadership must enlist these practices in the process of developing the network as a true partnership through governance and operations.
The UNC Health Alliance formed a 30-physician steering committee—two of whom were hospital executives—from a number of different markets in the state. Representation on the steering committee was balanced between employed and independent physicians, and primary care practitioners and specialists.
"Over six months, we made important strategic decisions about how we would form the CIN, from what the board would look like to operating agreements to explicit goals, developing participation agreements and even branding," he says.
A sister organization, the UNC Senior Alliance, includes UNC's Medicare ACO and provides similar representation from providers.
"Over six months, we made important strategic decisions about how we would form the CIN, from what the board would look like to operating agreements to explicit goals, developing participation agreements and even branding."
Pick your partners wisely
Organizations learning from others that have been successful with a CIN strategy are taking time to conduct capabilities assessments, says Donna Cameron, Navigant Healthcare's managing director.
For example, creating analytics functions with existing organizational data is important because doing so helps organizations get a head start on targeting where to provide resources. Those analytical constructs frequently point to high-potential ROI in developing preferred postacute partnership networks, Cameron says. Analytics around existing data helps identify postacute providers that are more effective than others in preventing readmissions—for example, pointing organizations to align better with partners that are effective at driving quality, patient engagement, and reducing cost of care.
Such analytical exercises help organizations determine what areas along the care continuum need to be further developed and integrated to build a stronger foundation for the CIN and its performance going forward.
Other analytics that are important, especially at an early stage, are measures of provider engagement, their level of activity on the governing board, and the five core committees that are the "engines that drive the work," says Glickman.
At UNC Health Alliance, those committees are quality, care transformation, information technology, professional standards, and payer contracting. Some 50 physicians staff those committees, and their attendance and involvement in the ongoing work is an important metric at this stage.
"As we move toward defining the specific quality and outcome measures we are setting as standards for the network, our success will be around our ability to meet targets on quality outcomes, utilization, and managing the total cost of care," says Glickman. "We have different ways of doing that across different payers."
Keep it simple
Leaders are cautioned that development of intricate and elaborate scorecards to track metrics is possible, but initially, it's important to keep it relatively simple as clinicians get used to providing care in a different way—that is with the continuum in mind instead of providing care in an uncoordinated and episodic manner.
"Sometimes organizations begin to gain traction with fewer high-impact metrics that align multiple stakeholders, so that as success begins to build, it allows you to build additional momentum," says Cameron.
In postacute care, for example, there is a lot of fragmentation and spending, and myriad metrics to choose to emphasize. However, if a CIN can evaluate providers based on different venues of care, reduced skilled nursing lengths of stay, and reduced readmissions, they can begin to develop criteria for where the most appropriate clinical placement is for one type of patient versus another, that may be enough to start.
"Take the broad view," she says about the process of setting up care pathways based on disease state and demonstrated capabilities of partners. "Route patients to aligned partners and focus on delivering care at the right place at the right time, not just passing the baton."
Innovative technologies can be an important part of this work and should not be ignored—especially in their ability to manage relationships with postacute partners to ensure optimal care for patients and address total cost of care, says Glickman.
"We're early in a lot of our postacute work, but we have done some successful demonstrations and pilots around using innovative technologies to monitor or manage patients who are homebound or in a postacute facility," Glickman says, referencing various telemedicine and/or remote-monitoring capabilities. "We have started to form a narrower network of relationships with high-value postacute providers, where our goals are transparency around quality and outcomes for the members we manage with those facilities."
Some of the most important metrics around postacute evaluation are not surprising: service utilization, average number of bed days, the number of times a patient is readmitted, average length of stay, and costs associated with certain disease conditions or bundles. These metrics are important because by measuring them, "we can understand where opportunities are to work together," Glickman says. "Part of that is developing clear care management pathways and protocols for transitions."
Risk critical mass
At UNC Health Alliance, between 10% and 20% of payment is associated with some type of incentive, and those are usually quality incentives. To really change the underlying behavior of physicians and get the CIN to work in a more integrated way, that number will need to increase to at least 20%–30% and be tied to quality and cost as well, Glickman says.
The alliance anticipates that between the health system's ACO and state Medicaid—thanks to Medicaid reform in the state—value-based incentives will soon make up as much as 50% of reimbursement within the next three years, he says, so critical mass is coming soon.
"We already are experiencing a real shift in our market" toward value-based care, Glickman predicts. "It's a real opportunity for us to align those payments with the types of care models and behaviors we want our providers and patients to exhibit."
After a tough 2016, market analysts say that this year they expect a better investment climate in many healthcare sectors.
Wayne T. Smith's company had a terrible, horrible, no good, very bad 2016.
That's the main reason that Smith, the CEO of embattled hospital operator Community Health Systems, was glad to see the calendar reach 2017.
"I've had a number of inquiries about whether I'm alive and well," he told a capacity crowd last week as moderator of the Nashville Health Care Council's annual event featuring Wall Street analysts last week. "You wouldn't know it from our stock price, but I am," he joked.
Last year, healthcare as a whole didn't do too much better than CHS. In 2017, market analysts say they expect a better investment climate in many healthcare sectors.
The Dow broke the 20,000 milestone on Wednesday, and overall, the healthcare sector has recovered somewhat after the surprising election results that swept Donald Trump to the White House. But the narrower hospital sector has continued its 2016 decline since the election.
The four Wall Street analysts who joined Smith on stage at the Health Care Council event see the industry, especially the hospital sector, as "oversold."
So said panelist Whit Mayo, managing director at Robert W. Baird, a Milwaukee-based investment and private equity firm. "The election threw a curve ball into acute care hospital valuations…. I do think the group is oversold and there are pockets of opportunity," he said.
On repealing and replacing the Affordable Care Act, a key promise of Trump and the Republicans who control both houses of Congress, Mayo expressed doubt that here will be drastic changes in any immediate timeframe.
'Valuations Have Contracted'
"We're in for a much softer landing," he said. "We'll see something [legislative] because the Republicans made a commitment to their voting base, but the chassis around the ACA today may look a helluva lot similar" to what Republicans ultimately replace it with.
His firm is also positive on behavioral health and physician practice management sectors.
When it comes to investing in healthcare overall, Paula Torch, senior research analyst with Nashville-based investment bank Avondale Partners, expressed cautious optimism, but said she expects some sectors will perform better than others.
"Valuations have contracted. My coverage list was down about 31% for 2016," she said.
Torch expects pockets of outperformance in some sectors that would likely be "immune" from any tinkering with Obamacare, such as behavioral healthcare and outpatient services. She says the fragmented industry could experience high single-digit to low double-digit growth over the next several years.
A.J. Rice, managing director at UBS in New York, expects to continue to see nontraditional partnerships between acute care operators and other healthcare sectors, from home health to imaging to other post-acute care services, to proliferate.
Some of those vertical integrations may eventually take the form of innovative mergers, such as the recently announced deal between United Healthcare and Surgical Care Affiliates that would unite a payer and provider of healthcare services. It's not the first such unusual merger, and it certainly won't be the last, according to Rice.
'More Nontraditional Partnerships'
"We're watching people do things with partners they would not traditionally do things with," he said, mentioning revenue cycle management outsourcing as an example of how companies are leveraging niche operators to eke out incremental efficiency gains.
"We'll see more nontraditional partnerships," he said.
Chris Rigg, senior managed care and healthcare facilities analyst with Deutsche Bank, expects consolidation to continue to accelerate in the specialist physician practice arena, especially in anesthesiology and radiology. Other areas of consolidation might take place in medical management or back office functions that wouldn't be recognizable to consumers, he said.
Smith asked all what their best picks were for 2017, suggesting that a certain Franklin, Tenn.-based hospital company might be poised for a comeback.
"We had a challenging 2016—we were ill with a serious case of HMA-itis," he joked, referencing his company's 2013 acquisition of a competitor that saddled the combination with high debt and operating problems in HMA legacy hospitals. "Don't worry, it's not contagious."
Other names dominated the analysts' recommendations, however, including hospital operator HCA, payer United Healthcare, addiction treatment provider Acadia Healthcare and healthcare services company Envision Healthcare.
With a little help from about 10,000 of her friends and colleagues, the head of Indiana University Health's office of transformation leaned in to cut waste and encourage value, one project at a time.
By 2012, Indiana University Health's board could see the writing on the wall: Its healthcare costs were too much.
In fact, the board sensed a day coming soon where the high cost of care would have a negative effect on the health system's competitiveness.
It felt an urgency to prepare the Indianapolis, IN-based health system for a future in which the buyers of healthcare, whether they be health plans, the government, or individuals, would be price-conscious.
IU Health had already tried some performance improvement projects, but they were scattershot and not based on a unified philosophy. In order to improve results and scale the improvement process, the board challenged then-CEO Dan Evans to deploy a system-wide value-improvement tool that could enlist all employees.
Lean, Not Six Sigma
Evans commissioned a study group that ultimately chose Lean because of its ability to engage large swaths of employees and because it "transforms culture," says Alicia Schulhof, the former HCA chief operating officer whom Evans hired to direct the effort, and whom he eventually put in charge of IU Health's Office of Transformation.
"Six Sigma can be intimidating," she says, referencing another popular process improvement technique. "[Lean] allows every one of our 35,000 team members to be a problem-solver."
That may be a slight exaggeration. Slightly fewer than 10,000 employees have participated in the project so far, but the transformation effort has reached wide—it's been installed at all 12 regions and 15 hospitals—and deep, as Lean performance improvement projects can be extremely specialized.
Schulhof does not prescribe efficiency projects. Her office and the consulting company IU Health hired to help with the process rollout train local offices in the statewide health system to find promising projects.
It's working. Over the past three years, efficiency efforts that Schulhof has overseen have yielded more than $50 million in savings.
Skepticism and Pushback
The consultancy hired to help implement Lean is called Simpler, and has experience implementing Lean at Fortune 500 companies.
But initially, even Schulhof was a skeptic of Lean, as were many at IU Health who were asked to lead the system's first Lean projects. Ultimately, she decided she had to trust the process, as she was asking others in the organization to do.
"It sells itself internally," she now says. "Leaders have to have deep personal experience with Lean to get it because once they go through it, they understand."
Office of Transformation
The Office of Transformation was created concurrently, but unrelated to, a reduction in force.
Schulhof had to convince the first of 12 local offices of transformation she would open during 2013 of the fact that Lean was not brought in to cut jobs. Indeed, she says, it was intended instead to remove redundancies in processes and reduce expenses to avoid the need to cut further jobs.
Employee surveys have shown that employees' perceptions of engagement with IU Health are higher if they have been involved in the Lean program, which now reaches all 15 hospitals and has been introduced through 1,150 "events" and 345 "projects" to 9,411 of its employees.
"Physicians are the best example of this," says Schulhof. "Their time is precious. They'll always say they can't commit two to three days for an event. I would always ask if they could just come in for first hour or two hours. Time after time they would come in and never leave."
Deployment Flexibility
As the first to lead the transformation office, Schulhof crafted the rollout the way she wanted to, deploying one site per month for the first 12 months.
"We chunked it by region," she says. "We went one-by-one and in a systematic fashion worked with local executive teams to determine what their biggest opportunities were. But [we] were not prescriptive."
The biggest opportunities to make headway on performance indicators were most often found in the perioperative or emergency departments.
One project began in 2013 in the digestive and liver disease clinic, involving extremely sick patients, some with end-stage renal failure. The problem: a patient cycle time of almost 210 minutes.
"I'm almost embarrassed to say that when we walked in, they were ordering additional office furniture because we were at capacity," says Schulhof. "These patients were spending some of the little precious time they had left on this earth just waiting. Talk about waste."
Since then, cycle time has been cut in half, while patient-doctor time stayed constant, and, in some cases, increased.
Each IU Health region tracks its Lean projects using about 15 metrics that are the same across the system, and are based on quality, people (employees), service (patients), finance, and growth. On Schulhof's dashboard and those of people who are managing the projects locally, those metrics for each project appear either red or green based on progress against goals.
While many companies use industrial engineers, such as those with IU Health's partner Simpler, as project managers at IU Health, those engineers are ordered not to solve problems themselves, but to instead act as coaches.
"That's how we can save $54 million," says Schulhof. "If you add in efficiency, we're over $130 million now."
While the federal government's star ratings may be a reliable measure of patient experience, that's about all they can be relied upon to provide, says a provider of healthcare quality and outcomes data.
Ever since CMS debuted its hospital quality star rating system at the end of July , studies highlighting the system's shortcomings have proliferated.
Criticism from healthcare executives, who along with members of Congress called for delay of the release, has continued.
The clamor is well-founded. Hospitals contend that the ratings unfairly disparage some hospitals by boiling down multifaceted, complex organizations to a single grade.
While the star ratings may be a reliable measure of patient experience, that's about all they can be relied upon to provide, says Frank Mazza, MD, chief medical officer of Quantros, a provider of quality and outcomes data to employers choosing healthcare options for their employees.
When the CMS ratings came out, Mazza, an intensive care specialist by training, noticed the lack of five-star rated organizations that offer complex services such as intensive care.
"We, like everyone else, thought this didn't really sound right because we had a lot of skepticism that [HCAHPS] surveys, [which] basically measured whether docs were nice to you, could somehow translate to better clinical outcomes."
Howard Kern, the president and CEO of Norfolk, Virginia-based Sentara Healthcare, which is not a Quantros customer, largely agrees.
Though he doesn't believe many patients will base their choice of where to have an important surgery or other treatment on the star ratings, he says the system's shortcomings muddy the waters for patients who want to choose among their healthcare options based on data and analysis.
Following, according to Kern and others, are three reasons the system needs big improvements.
1. Ratings are Oversimplified
The biggest challenge to the data is that CMS is trying to roll up a diversity of data metrics and reference points into a single rating, says Kern. "That's extraordinarily hard to do."
Even Consumer Reports, the evidence-based testing and rating organization, has a better system, he says.
CR rates everything from washing machines to new cars by compiling a weighted overall rating that also shows critical subcategory ratings and allows the consumer to scan overall quality. This allows consumers to pinpoint the items that are important to them.
"A mother looking for a place to have her baby is looking for different things than someone who's having a hip replacement," Kern says.
"For most community hospitals and big academics, breaking out data from the overall score by service line or by category of clinical quality, safety, and customer experience, gives them a look on that level so they can weigh for themselves what's important to them."
Another factor: the data CMS relies upon for the ratings comes only from Medicare patients.
"There are not too many mothers having babies through Medicare," Kern quips.
"CMS may not have the ability to drag data from other payers—they may need legislative action for that—but other states have done it, most notably in Pennsylvania with heart surgeries."
2. Size Shouldn't Matter
Some 87.5% of hospitals that earned five stars under CMS's ratings scheme have fewer than 100 beds, says Quantros' Mazza. Some are critical access hospitals, which by definition have less than 25 beds, and 68% of five-star hospitals don't have an ICU, he says.
"Anyone who has clinical knowledge knows that when people are very sick with pneumonia, for example, they wind up in the ICU with special medicines," Mazza says.
Heart attack patients will be in the ICU with lines and drips, while congestive heart failure patients may be on artificial hearts.
"These are not things that are offered in very small critical access hospitals—they're offered in big medical centers with sophisticated capabilities," he says.
"We have a lot of critical access hospitals here in Texas. Many are wonderful places with wonderful people who do the best they can, but it is hard to believe they offer the highest quality of care with these three conditions."
For his part, Kern says the methodology will have to be greatly improved for the CMS system to be considered a viable measure of quality and outcomes, upon which patients and doctors should make treatment choices.
"I don't pretend to be an expert on the methodology, but the truth is that it's an issue," he says.
Under the current CMS methodology, rural hospitals, and for that matter, specialty hospitals, can benefit in that they don't have the volume to generate the results that would drive them statistically off the five-star list.
They also benefit by being able to be highly selective of the patients they do treat, he says.
"They can be pretty selective and for high-risk patients, they refer elsewhere," Kern says. "Larger academic medical centers and general community hospitals take all comers and manage as best they can."
3. Patients' Perceptions Aren't a Proxy for Quality
In the Quantros study, CMS one-star hospitals made up a large percentage of the top 10%.
More telling, Mazza says, the Quantros study found no correlation at all between CMS star ratings and clinical outcomes, even when it broke down the data to look separately at mortality and complication rates.
And there was no correlation with an organization's CMS star rating except in patient safety.
"CMS is essentially saying you can use patient experience scores as a proxy for outcomes and clinical quality, but you really can't," says Mazza.
"If you were to use the star rating system as a proxy for this, not only might you not wind up at a high-quality institution, you might end up at substandard institution. Experience is in some respects a measure of quality but not a measure of health outcomes."
Ratings System Should be Refined
Kern is hopeful that CMS will, over time, broaden the data that generate the star ratings and improve upon it. Even in its current format, he says, Sentara pays attention to it and is working toward improving its hospitals that scored relatively poorly on patient experience.
"We give pats on the back to high performers and try to improve the ones that could do better. At the same time, it's not just about getting a score."
Costs for episodes of care for three common surgeries may vary threefold based on post-surgical physician orders. Better guidance on care standards may help.
Whether to inpatient rehab, a skilled nursing facility, or home with some help for outpatient rehab, where post-surgical patients are sent to recover has a lot to do with healthcare spending.
That finding makes intuitive sense, but a study by University of Michigan researchers published in Health Affairs details huge variations in where patients with similar severities are sent based on geography and standards of practice, among other variables.
And those variables don't come cheap. Episodes of care resulting from a similar surgery on a similar patient at one hospital can cost as much as three times as much at another.
The researchers looked at the impact of sending patients home with some in-house or outpatient help versus sending them to a skilled nursing or inpatient rehabilitation center.
They examined hundreds of thousands of patients covered by traditional Medicare between 2009 and 2012 in the 90 days following one of three common surgeries: hip replacement, heart bypass surgery, and colectomy.
Part of the reason for the wide variation is that physicians have little official guidance or objective measurements to help them decide which patients will do best in each setting, says Lena Chen, MD, the study's lead author and an assistant professor at the University of Michigan Medical School.
"Based on these findings and others, we can see that it's going to be really important to find out which type of care setting will have value to which patients, and when," she said in a media statement.
The need for such tools is evident because hospitals are increasingly being penalized or rewarded financially by Medicare and other payers for the total cost of their surgical patients' care. Algorithms and better guidance on care standards may be able to help this process in the future. One example is CMS's tool called the Continuity Assessment Record and Evaluation (CARE) Item Set.
Other findings by the University of Michigan researchers:
Even though skilled nursing facilities charge for every day that a patient is there, the length of stay in such facilities didn't matter as much as the decision to send a patient to such a facility or to a rehab facility, compared with the lower-cost home-based or outpatient care.
High-cost hospitals and their patients were more likely than other hospitals and patients to choose skilled nursing and inpatient rehabilitation settings. After a particular post-acute care setting was chosen, the intensity of utilization did not explain meaningful differences in spending.
Compared to hospitals in the lowest spending quintile, those in the highest spending quintile for total hip replacement were also more likely to be teaching hospitals and for-profit hospitals and to be located in the Northeast.
Variation in price-standardized, risk-adjusted payments for post-acute care was due more to choice of care settings than to the intensity of the care.
Chen is calling for more research on which patients get the most benefit from what post-acute care settings in part because the potential return on investment is so high.
"Once providers better understand what setting has value and when, the payment system can better incentivize appropriate decisions," she said. "Right now, we know so little about what is the best, and who gets the most benefit from the highest-cost options."
30 million additional uninsured patients would drive up the 10-year cost if the law's main components are repealed, an Urban Institute study shows.
As Republican lawmakers who control Congress gird themselves to repeal and replace Obamacare as a "first order of business," new research shows that doing away with the law will be costly to providers of healthcare services in the form of uncompensated care.
In fact, researchers from the Urban Institute—with funding from the Robert Wood Johnson Foundation—say that repeal will raise the nation's uncompensated care bill from $656 billion to $1.7 trillion over a 10-year period.
Republican lawmakers and the president-elect have promised to replace the Affordable Care Act with another healthcare law, and the research only considers what would happen if the ACA were repealed and nothing else changed.
The new research attributes much of the projected increase in uncompensated care costs to the loss of healthcare coverage for as many as 30 million people who would be newly uninsured with the law's repeal.
Much of the increase in the uninsured population would result from eliminating the Medicaid expansion that came with the ACA, the premium tax credits for the purchase of marketplace coverage, and the individual mandate.
Republican lawmakers have said Obamacare repeal is the first priority of the new administration, through executive orders and legislative action, but a gradual transition to a new law and a winding down of Obamacare would lessen the impact of the law's repeal at the patient level.
That could be problematic if the law is repealed and no replacement is passed.
If the law is repealed but no other legislative action is taken, 2019 healthcare spending by Medicaid, private insurers, and households would fall by $145.8 billion and an additional 30 million uninsured people would seek $88 billion in uncompensated care, the researchers say.
The Urban Institute research used the 2016 budget reconciliation package repealing the ACA—which passed Congress last January but was vetoed by President Obama—as the baseline for its analysis.
Hospitals Would Be Hit Hard
Under that scenario, hospitals would bear a big part of the burden because insurer and household spending on hospitals alone would fall by $59.1 billion.
Newly uninsured patients would seek an additional $24.6 billion in uncompensated care from hospitals during the 2019 fiscal year.
"The partial repeal of the ACA through a reconciliation bill being considered by Congress would create more uninsured people than would have been the case had the ACA never been passed," said Matthew Buettgens, senior research associate in the Urban Institute's Health Policy Center, in a press release.
"The increase in uncompensated care sought by the newly uninsured would be more than state and local governments and health care providers could internalize, undoubtedly leading to substantially more unmet medical need."
The changes will not be immediate or drastic, observers say. But they are coming.
The old saying, "May you live in interesting times," may sound like a blessing.
U.S. healthcare leaders know it is a curse.
All they've been working toward and preparing for since the Patient Protection and Affordable Care Act was enacted almost seven years ago has been turned upside down in the wake of the Republican election sweep.
Yet, for all their campaign promises to repeal the ACA, most congressional Republicans and President-elect Donald Trump must know that healthcare costs are too much for many Americans, and abolishing Obamacare with no replacement could be politically dangerous.
A report from consulting firm KPMG and an opinion piece published on LinkedIn by a Navigant executive predict that the Republican Congress and the executive branch will change the healthcare reform efforts initiated through the ACA, but the concept of value-based care will stay.
Changes Will Be Gradual
The report and the LinkedIn piece also agree that changes to the ACA itself could come more slowly than recent election-season rhetoric would suggest.
Republicans in Congress won't want to unravel the law in a chaotic fashion, given the possible problems in coverage that could result from a blanket repeal—and possible political consequences during the 2018 elections.
That means drastic, immediate changes are likely off the table.
It's likely the executive branch will weigh in most quickly, with Congress looking for areas of bipartisanship, says S. Lawrence Kocot, who leads KPMG's Center for Healthcare Regulatory Insight and was an advisor to the CMS administrator during the George W. Bush administration.
The Trump administration may quickly move to relax certain regulatory requirements of the ACA through Executive Order or regulatory guidance (non-enforcement).
Kocot expects, however, that value-based reform efforts, in the form of alternative payment models, will continue to proliferate, driven by the Medicare Access and CHIP Reauthorization Act and its Medicare Quality Payment Program.
Whither the CMMI?
The Navigant and KPMG analyses differ on the fate of the Center for Medicare and Medicaid Innovation, an incubator for Medicare demonstration programs such as the Comprehensive Joint Replacement Model and the Part B Drugs Payment Model, which Medicare officially dropped just before Christmas.
CMMI's other mandatory demonstrations are still active—at least for now. Kocot speculates that Republicans might defund the CMMI to kill it without legislation, but they could leave other payment reform initiatives alone.
"The vehicles for payment reform may change, but the demand for greater innovation in payment and delivery is not likely to decrease as a result of changes in leadership," he says.
On the other hand, Navigant's 2017 Healthcare Outlook analysis argues that CMMI might have a purposes in the new administration.
Instead of killing the CMMI, Republicans may instead use it to drive reforms, says Rulon Stacey, the author of the LinkedIn article. Such value-based models as bundling and MACRA, which have bipartisan support, aren't tied directly to the fate of the CMMI.
The results from such programs may be difficult to resist. One Medicare bundling participant showed a 20% reduction in Medicare payments, while also reducing patient length of stay and readmissions.
Besides that, Navigant's analysis of Medicare data shows that close to half of the nation's hospitals already participate in a Medicare-based ACO or bundled payment program.
Focus on the Certain
Regardless of the mechanism for reducing healthcare costs, hospitals and health systems should "stay the course" in pushing toward value, Stacey says. Targeting variation and increasing standardization by more closely following evidence-based protocols will pay off.
Hospitals and health systems should also seek efficiency through medication reconciliation and adherence initiatives. Use of medical data to engage surgeons on clinically equivalent, but cheaper, implants and medical devices will also yield results, Stacey adds.
Focusing on value is worthwhile under any regime, says KPMG's Kocot. He suggests hospitals and health systems adopt more consumer-facing business models because of the unrelenting trend toward increasing patient cost-sharing.
That trend, which also does not depend wholly on government action or inaction, will drive largely cost-based decisions about where and how both healthcare services and insurance coverage are procured and delivered.
Other area execs are mum on Tom Price, MD, who has been an outspoken opponent of specific portions of the PPACA that appear to benefit hospitals.
This is part of a series covering the Shaping of Healthcare's Future in the Trump era.
Despite his career as a physician and six-term 6th-district Georgia Congressional representative, some hospital and health system executives are wary about what to expect from Tom Price, MD, President-elect Trump's nominee for Secretary of Health and Human Services.
Beyond his congressional reputation as a staunch opponent of Obamacare, many don't seem to know much about him or what to expect from Tom Price as HHS Secretary.
The associations in healthcare have been predictably supportive of his nomination, perhaps in hopes that the new HHS secretary will work with them to retool the last administration's signature healthcare accomplishment without hurting their interests too badly.
But individual healthcare organization leaders in his home district of Atlanta—even those who know him personally—don't seem particularly eager to discuss him.
Jonathan Lewin, MD, the president, CEO, and chair of the board of Emory Healthcare, agreed to discuss the nominee. Four other high-profile Atlanta-area health system leaders declined on-the-record interviews.
Perhaps that's at least in part because during his Congressional tenure, Price has been particularly critical of part of the law that requires insurers to offer a government-mandated basic level of coverage as well as a provision that extends federal aid to states in return for their expansion of Medicaid to cover more people.
Those provisions help hospitals financially, although Georgia, notably, is not one of the states that has expanded Medicaid under the PPACA.
Lewin, who has met with Price only once, has been at the helm of Emory Healthcare for less than a year, but over the holidays, he shared his views with HealthLeaders Media on his fellow physician and controversial HHS nominee. Following is a lightly edited transcript of his answers to those questions.
HLM: In your one meeting with Dr. Price, what did you discuss with him?
Lewin: We talked about the importance of research. He expressed support for strong federal funding of scientific and biomedical research. This is an issue of significant importance across Emory, and we really appreciate his support.
The issue of economic modeling for research funding impact was discussed at length. Congressman Price expressed an interest in driving the message that research is good for the economy with his colleagues on Capitol Hill.
He asked for us to help him better communicate the research and data around this issue. As we often do for our elected officials, we completed a research memo on the topic. Further, we promised to share our own economic impact report that will be completed in spring 2017.
HLM: What was your impression of him regarding his attitude toward helping hospitals in his district?
Lewin: My impression is that Tom Price understands the importance of access to care. With his medical background, he understands how hospitals work, he recognizes the challenges facing our healthcare workforce, and he wants to do what is best for patients.
HLM: This is a president, and presumably an HHS nominee, who promises to cut red tape. What regulations would you like to see done away with or modified?
Lewin: We are deeply appreciative of the progress made in the 21st Century Cures Act, which just passed Congress, to address the regulatory burden on our researchers. Studies show that 42% of a researcher's time is spent on administrative work, much of which is redundant.
We look forward to continuing to tackle this problem by streamlining administrative requirements, like effort reporting, for scientists and recipients of research grants.
HLM: Dr. Price has an actual plan to replace Obamacare, which he and the administration have pledged is among their first priorities. Given that, what would you like to see maintained from the PPACA?
Lewin: We believe that avoiding discrimination against patients for preexisting conditions, allowing young adults to stay on their parent's policies up to age 26, and maintaining coverage for the previously uninsured should be foremost on everyone's mind.
The costs to society in both human suffering and the long-term financial impact of the health of our population warrant careful consideration of how those recently-insured people can retain a sufficient degree of coverage.
Texas Health Resources has developed a strategy to both recruit and retain top physicians by remaining competitive in an ever-changing marketplace. Learn THR's top tips for physician recruitment and engagement by watching this live HealthLeaders Media webcast, Key Physician Recruitment Strategies from Texas Health Resources, on January 11.