This article appears in the February 2012 issue of HealthLeaders magazine.
Any story that attempts to discuss ways to improve the patient experience should attempt to define it, because there is ample confusion in healthcare, even among otherwise highly competent leaders, about what patient experience actually is.
HealthLeaders Media Industry Survey 2012 The priorities and concerns of nearly 1,000 of your colleagues in healthcare leadership are revealed in this year's comprehensive multi-part survey, our fourth annual HealthLeaders Media Industry Survey. Download the Free Reports
It isn't providing excellent quality healthcare—at least not totally. A basic assumption by patients is that when they receive a medical intervention, the actual medical care will be excellent. Rather, patient experience is much more comprehensive, even encompassing patients' feelings about the hospital brand and their "stickiness," that is, their loyalty.
Our own HealthLeaders Media survey on patient experience in 2009 showed how difficult it was for hospital and health system senior leaders to define the term: 34% chose "patient-centered care," 29% selected "an orchestrated set of activities that is meaningfully customized for each patient," and 23% said it involved "providing excellent customer service."
The rest agreed that the patient experience meant "creating a healing environment," was "consistent with what's measured by HCAHPS," or was something "other" than the aforementioned options.
Sounds like patient experience encompasses just about everything except, possibly, the clinical care itself.
That's just about right, says James Merlino, MD, Cleveland Clinic's chief experience officer. The wide-ranging view of what constitutes patient experience used to be perplexing, he says, but the correct answer for him and for many others who are looking to improve is that it's "all of the above."
"When I took over this role, we suffered from the same problem as everyone else. In order to fix it, you have to define it," he says. Rather than defining patient experience success as performing well on standardized measures such as HCAHPS or other metrics, Merlino and the Cleveland Clinic leadership team went the other way.
"We made it more abstract. The idea being, let's just tell our people that anything that affects the patient outside the delivery of medical care is patient experience."
Not that they don't strive to do well on metrics like HCAHPS and other patient experience measures, but Merlino says he wants to avoid a "teaching to the test" mentality that may result from an exclusive focus on how the hospital system performs on measures that might affect reimbursement.
Rather, a more holistic approach is needed to fully incorporate the core idea of patient experience—that one bad experience can ruin the whole effort. By focusing exclusively on measures that are on the HCAHPS survey, essentially, you're missing both the ethical obligation to do best for the patient at all times, as well as the potential long-term benefits of patient loyalty.
"One bad interaction can define the impression," he says. "This is well documented in retail and other service businesses."
So how does one begin to incorporate accountability and responsibility for a patient's experience throughout the institution?
In stages, he says.
HCAHPS' focusing role
At the beginning, despite his misgivings, Merlino did focus on HCAHPS scores. He explains: "We chose HCAHPS initially not because we're chasing numbers, but because it was the only thing that had leverage. If you don't do it well, you will be penalized financially. We had started on this journey for the right reason before HCAHPS, but needed something to focus on."
But more important was to get the message to everyone who works in the hospital that each of them is responsible for patient experience.
"You can talk to anyone at our main campus and ask them about patient experience. They will say it's important and they are part of it," Merlino says.
Merlino says Cleveland Clinic faced an interesting challenge culturally, because it had always been thought of as an organization founded by doctors, for doctors. Instead, it's for patients, Merlino says, and the rest of the employees, whether they regularly encounter patients or not, have at least as important a role to play in patient experience.
Cleveland Clinic took a big risk to deliver that message to the entire staff of 42,000 employees by taking them offline over a period of months in small group sessions that lasted a half day. Everyone spent valuable time, from neurosurgeons to housekeeping staff, discussing why it was important, how everyone is in this together, and service excellence standards and how to improve.
In tables of eight to 10 people, including a facilitator, Merlino and his staff talked to the randomly assigned groups about patient experience using theoretical situations and a visual learning map, encouraging them to develop a collegial atmosphere. It cost $11 million to do the project, says Merlino, but it was well worth it.
"It was a leveling experience that got everyone to realize that patient experience isn't the responsibility of one group," he says.
Rather, it is a team effort, and the organization succeeds or fails on patient experience as a team.
"A highly engaged workforce is a big driver of satisfaction," he says. "We needed a culture of engaged and satisfied caregivers. If we don't get that, we don't get to any other level. Any Fortune 100 company understands that."
And patient experience is a journey that never ends, he says.
While Merlino says Cleveland Clinic is "nowhere near where we want to be," its patient satisfaction scores, after 2009, when this intensive training was initiated, jumped 15% in one year, from 2010 to 2011.
"We attribute it to our work on this program," Merlino says.
Driving accountability
But a one-day retreat for employees wasn't going to get the job done in and of itself, Merlino realized. Sustainability was critical, so patient experience measurement and metrics needed to be implemented by the management staff, a group 2,200 strong, and they needed to know it was one of the most critical factors by which their performance would be judged going forward. And it had to have full support from Toby Cosgrove, MD, Cleveland Clinic's CEO.
"The top person has to say it's critical," Merlino says. "If you don't have that, you're not successful."
Those 2,200 managers underwent two sessions to discuss measurement protocols, accountability, engagement, and developing unity of purpose.
"These managers sustain it," says Merlino. "Managers must be razor-focused on the goals; you have to give them mechanisms to track them and you have to hold them accountable. They will then hold their employees accountable. Toby drives it to the executive leadership team, we drive it to our management, and management drives it to the employees. In a way, what we're doing is enforcing basic management techniques. It's not rocket science."
UCLA's reason for being
If Merlino sees patient experience as a critical part of the care process, David Feinberg, MD, sees it simply as the reason for being for Ronald Reagan UCLA Medical Center, for which he is the CEO.
Put simply, Feinberg is a believer that if patient experience is excellent, most everything else that's a priority for the hospital or health system will fall into place. Which is why he is self-deprecating about UCLA's achievement of 99th percentile in HCAHPS scores.
"Our HCAHPS scores are good, but we're not doing well in patient satisfaction," he says. "We've had a meteoric rise from 38% to 99th percentile. We perform at the very top regarding HCAHPS questions. That being said, we're terrible because to get to 99th percentile, you have to get 85 out of 100 people to give you that answer on their survey. That means we've failed even though we're the best, because we've failed with 15 people out of the last 100."
He says, with no hint of guile, that the scores need to be 100 out of 100 before he can boast that they've gotten anywhere.
Yet his hospital represents the top 1%, in a manner of speaking, meaning it must be doing something right.
His biggest challenge, he says, was instilling a team spirit about patient care throughout the organization.
One of the guiding philosophies is that it's not just about the people who touch patients. "Whether you're in IT, or billing and collections, or frontline nurses, docs—wherever you fit—you're part of a healing team."
That's fine for a major academic medical center in one of the nation's largest cities, which has far more resources than the average community hospital, but Feinberg takes care to mention that much of the work is commonsensical and that being attentive to the customer's needs doesn't cost much, if anything, and often leads to better, more coordinated care, and thus, a lower ultimate cost of care.
Anyone in a leadership position should be able to start with culture, anyway, says Steve Whitehurst, chief customer and strategy officer with BerylHealth, which consults with hospitals on patient experience.
"Of course, it all starts with the culture and leadership engagement," he says. "CEOs may talk about the patient experience, but if they don't drive this message down into the organization, it doesn't work."
He says that's a great way to begin a discussion about HCAHPS not being the final arbiter of patient experience or quality, "because it's a great measure of 'always.' If my mom was getting care, do I want her to say that someone ‘always' did this or that—whatever question is being asked—or that her nurse was compassionate and took good care of her?"
He says he sees a lot of working to the test and toward obtaining the "always" answer.
"When you put them to a test that requires an ‘always' answer, it doesn't give them any opportunity to impact the patient experience," he says. "I don't believe a lot of hospitals are going past HCAHPS scores. About 20% are doing it because there's a penalty associated with it, and most of the rest are lagging and not doing anything about it."
UCLA's Feinberg says, without a hint of hyperbole, that from a leadership standpoint, patient experience is his "singular focus."
He practices what he preaches by rounding on patients for a couple of hours each day, and he makes it clear that he expects his management team to do so as well, if not to his extent from a time standpoint. He insists that everything else should be subordinate to what he calls a "laser focus on making sure the next patient gets that best care."
When others, including patients, see examples of great care through actions or patient referral, he makes a point of celebrating it, making sure the individual who exceeded expectations gets the credit.
"When we fail, we share that broadly as well," he adds. He encourages the staff—anyone who comes in contact with a patient—to probe patients and their families to "see where we messed up," he says. "I give out meal coupons and Starbucks coupons. We're pretty service minded."
He says service recovery, in the form of responding when things go wrong, is key to retaining patients over the long term, and that's what he's most concerned about—test scores are only one way of measuring how well they are meeting that goal.
"We're clearly far from perfect, but when those things happen, we're aggressive in seeing if we can make amends," he says.
Every unit, every shift, huddles around metrics and reviews handwritten notes as well as current HCAHPS scores and core measures scores. That kind of daily reinforcement helps tie workers more closely not only to how to recover from mistakes, but also to the patient's needs, refocusing them on what's most important.
"The best thing we've ever done to improve employee satisfaction is not to focus on it. Rather, we've focused on patient satisfaction," says Feinberg. "People here want to take care of others. If we're doing that, they're more satisfied in their jobs. I don't care if we ever become an employer of choice. We want to be a place that patients choose. If you get it right for the patient, your employees are happy, because their job is easier and you've tapped into their purpose."
This article appears in the February 2012 issue of HealthLeaders magazine.
Business lines in healthcare have developed according to the old reimbursement rules. Now leaders must work hard to develop an entrepreneurial culture if they are to survive and thrive.
Here at HealthLeaders, we just released our 2012 Healthcare Industry Survey, and we're quite proud of it. This is our fourth annual survey, and more than 1,000 of your colleagues donated a decent amount of their valuable time to share their insights with us.
The result is reams of free data on a variety of important trends and issues in healthcare. Anyway, I was looking over the CEO breakout survey, and something caught my eye in the context of a recent conversation I had with a consultant. We were talking about cultivating an air of innovation and culture of entrepreneurship in healthcare, which is undergoing rapid, some would say chaotic, change.
For the healthcare CEO, the risks of trying new business constructs have never been bigger. Then again, neither have the rewards.
According to the CEO report from the survey, the biggest strategic challenge facing hospital, health system, and physician group practice chief executives is care coordination and the continuum of care. This was chosen by 30% of respondents, ranking behind such big priorities as improving patient flow and patient experience, performance metrics, or hiring quality staff. It blew away reducing avoidable readmissions and complications too, for perspective.
Developing a culture, and at least as importantly, a system, for managing care coordination is foreign to healthcare organizations simply because it's never been required of them. Business lines in healthcare have developed according to the old reimbursement rules, which, never mind coordination of care, discouraged even coordination of businesses.
The goal was doing stuff, not measuring care outcomes. But I digress. Such big changes in incentives, financial or otherwise, require bold, often risky decisions about how to reorient your particular business structures.
That kind of culture does not come naturally to healthcare providers, says Ron Van Horssen, a senior vice president with The Camden Group, a Los Angeles-based healthcare business advisory firm. We had a long conversation about developing an entrepreneurial culture, and I've boiled it down to three priorities for healthcare senior executives seeking this kind of change:
1. Develop the ability to make informed change quickly (at least relatively)
Healthcare tends to need to take some pages out of other industries, Van Horssen says.
"The provider side has been inherently more methodical in terms of how it changes. In a new environment where the incentives are changing it's just critical to develop the ability to make change happen quickly."
Quickly can be a relative term, but Van Horssen says one key is setting up the ability to move more rapidly into areas that competitors may not have yet recognized, or acted upon.
Being the first mover is risky, he says, but if you do your homework and have faith that your team has calculated correctly that the risk/return probability leans toward the return side, give it a try. You will make mistakes, but as the first mover, you can course-correct with a little more leeway than competitors who are trying to catch up.
2. Realize you can't eliminate risk, but you can understand it
As providers face a new world of being more market-driven, Van Horssen says there's a tendency to almost get paralyzed from acting because you're always trying to reduce risk.
"In an entrepreneurial environment, you don't eliminate risk, you understand it," he says. "You can't completely avoid it when you're introducing new initiatives. You will miss market opportunities if you do."
He argues that inaction in this environment has real consequences.
"We've seen so many hospital and systems that are grappling with ACOs, core measures, different approaches to physician alignment, clinical integration, all tying into healthcare reform."
The problem, he says, is that these initiatives are so revolutionary that they are held up as almost reverential decisions that could represent life or death for the institution. It's true. They could, but that's no excuse for over-analysis or binding up decisions in layers and layers of bureaucracy, hoping to get everyone's ok before proceeding.
"Decisions on how to approach some of these challenges are often tied into existing planning processes that tend to take a long time," he says. "Using that process is inherently time-consuming and restricts the ability to move quickly, which is a characteristic of successful entrepreneurial environments."
3. Empower smaller groups to make decisions
The organizations that tend to be effective in all environments tend to be ones that decentralize some of the efforts at strategic change, says Van Horssen.
"What we've seen [that is] effective in some smaller innovations are those that recognize the need to create small teams and small governing boards," he says. "That's where the entrepreneurial environment thrives."
That means that if you're trying to take your board of 27 members through smaller decision-making processes such as how each service line should contact and keep up with patients' follow-up care, or even if that inpatient patient care group needs to coordinate with outside follow-up providers, there is inherent resistance to moving quickly and effectively.
"Give the execution team of 5-7 board members the ability to make decisions on how to operationalize it," he says.
That's taking a page out of what you would see in typical venture-backed or high-growth environments, where success is measured by how well the solution solves the problem, not whether all potential stakeholders have been satisfied that they've had their say.
"There's no question there's a political aspect to any organization, but the entrepreneurial organization is more focused on results and outcomes with smaller management teams. There, politics typically plays less of a role."
This article appears in the February 2012 issue of HealthLeaders magazine.
When it comes to clinical quality improvement, CEOs see care coordination as their greatest strategic challenge. In fact, with 10 possible answers, it was the choice of 30% of the CEOs who took the annual HealthLeaders Media Industry Survey. For perspective, improving patient experience, including patient flow, was the top strategic challenge for only 17%, the next most popular choice. How to overcome the care coordination challenge?
According to William Jacobsen, CEO of 37-bed Carilion Franklin Memorial Hospital in Rocky Mount, VA, and a vice president in the Carilion Clinic system based in Roanoke, VA, what's needed is "an army of care coordinators."
HealthLeaders Media Industry Survey 2012 The priorities and concerns of nearly 1,000 of your colleagues in healthcare leadership are revealed in this year's comprehensive multi-part survey, our fourth annual HealthLeaders Media Industry Survey. Download the Free Reports
"Carilion has taken a stance to work toward coordination of care in a system that has the primary care physician as captain of the ship," he says. "But you just can't take your typical primary care physician and ask them to coordinate these people."
Jacobsen sees care coordinators as the glue that binds physicians, nurses, hospitals, rehabilitation centers, skilled nursing centers, and nursing homes, among others, around the needs of single patients. Currently, most care is still episodic, and information gained or treatments given at one location may not be known by others who treat the patient. Patients with multiple diagnoses are unquestionably some of the most expensive, so it stands to reason that someone who can tie the disparate sources of care together can improve quality and reduce waste, the two top goals of health reform.
"At the Carilion Clinic, we're focusing on managing chronic care because that's where we see the greatest need and the opportunity to reduce costs," he says. "But there's a behavioral aspect to it. We see care coordinators not only coordinating the clinical work, but just helping patients manage their life."
Count Jacobsen among the CEOs who consider care coordination at their organization as a "work in progress." Some 59% of CEOs, however, say care coordination is strong or very strong in their organization.
"I'm really surprised at that figure," Jacobsen says. "For us, the infrastructure is there to make it strong, but we have more work to do because so much of this depends on labor supply in the case of physicians and care coordinators."
Of course, there is an acute shortage of both competencies in the healthcare marketplace.
Apparently, there's also a shortage of physicians who are interested in senior leadership, as 36% of CEOs who responded to the survey have zero physicians in their senior leadership structure. That number would likely be even higher if respondents from physician practices (26% of the CEOs) were excluded from the results. Jacobsen says organizations that fail to place physicians in the top level of the management hierarchy are missing a critical piece of their strategy to improve care and cut waste.
"So much of this work is based on clinical decision-making and evaluating evidence-based medicine protocols," he says. "The model we use where physician leaders, surrounded by administrators, are driving the process is a good model. It's not the only model, but physicians need to lead the clinical decision-making, supported by the administrators and financial people to ensure clinical decisions are sustainable."
Some 45% of CEOs, however, report between 1% and 20% of their senior leadership team is composed of physicians.
Some 54% of CEO respondents say they will fuel growth through outpatient strategies—the most popular answer, followed by starting or increasing promising business lines or facilities, at 49%. Jacobsen suggests that hospitals are beginning to realize that any one strategy is not the best way to fuel long-term growth.
"We are seeing some chipping away at profitability on the outpatient side, but the bigger point is that the future is in looking at the entire system holistically, not just the silos," he says. "We're looking at the entire experience for the patient as opposed to searching for short-term gain."
Another interesting response to the survey revealed that 60% of CEOs said healthcare can't solve its own problems because of "too much self-interest among the different stakeholders."
This response could mean that healthcare CEOs feel they are not in control of what they're being asked to do, and that other industry sectors, from payers to government, aren't really interested in working with them to improve care quality—they just want lower costs.
Jacobsen prefers to look at the challenge from a more positive perspective.
"Events happen which lead to an outcome. Your response is your only variable in that equation," he says. "We've got to be a part of the solution, and the government can't do that for us—they don't know enough."
Finally, among other interesting data, 60% of CEOs thought that quality would improve by increasing the scope of care of nurses within their organizations. Typically, physicians are seen as resisters to this type of change, but Jacobsen says that is going away as physician shortages bite into productivity.
"Advance practice nurses do an awesome job and we need more," he says. "The U.S. is opening new medical schools, but we still don't expect to produce enough physicians to meet our needs."
Jacobsen argues that much of the problems that bedevil senior executives hinge on better population health, which requires much more intensive work with the patient on variables that lie far outside clinical challenges. Hospitals aren't used to responsibility for such work, but they recognize the need to become more proficient.
"I had a Medicaid patient last year who used my ED 66 times," Jacobsen laments. "What we're dealing with here is that this person is disabled, and there's huge access issues around other sites of care. If they had access to the behavioral health they needed, transportation, and primary care, they would not do this."
This article appears in the February 2012 issue of HealthLeaders magazine.
If you're a regular reader of this column, presumably it's not only because you hope to glean some ideas about how to prepare your organization for the massive amount of change bearing down on you, but also because you've demonstrated a lot of leadership ability yourself.
It may also be presumed that you've made your climb the right way through hard work, calmness under fire, tough decision-making, and long-term vision.
Well, you won't find much of that here this week. Instead, I have a shining example of a few things you might not want to do if you're in charge.
You probably already know this, but if you're looking for a way to demonstrate vision and execution from your team to meet the challenges associated with healthcare reform, it's best not to do your business from the back of a limo.
News this week that the former chief executive of a debt-burdened Brooklyn hospital had the hospital buy him a $33,000 limo was one of the most titillating headlines of the week. Yes, the story leads with the fact that Wyckoff Heights Medical Center is seeking "whatever we can get for it," according to new CEO Ramon Rodriguez (it is the New York Daily News, after all), but if you read past the first few paragraphs, the story turns rotten and sad—and not at all funny.
The fact that former CEO Rajiv Garg rode around in a limo is by far the least troubling information. In fact, after checking out the various conflicts of interests revolving around the former CEO and several former board members, you're more amazed than amused. You wonder why it took a state advisory panel's recommendation that Wyckoff, part of a group of financially struggling Brooklyn hospitals, merge and restructure, for all of the scandalous news to start coming out.
As in many provocative stories that involve misdeeds at the highest level, the activity was pretty blatant. In fact, this episode is so conflict-riddled, and possibly criminal, that you start to wonder who wasn't involved. Let's hear a round of applause for a group of about 100 doctors at the hospital who worked to challenge Garg and the board's leadership last winter. Unfortunately, they were largely ignored until they paid a visit to the district attorney.
Nearly a year later, it turns out that not only was the former CEO riding around town in a stretch limo, but he was having the hospital pay outstanding bills for consulting services ordered by him, and now no one can figure out the projects that the consultants worked on. Also, several former trustees had cozy business relationships with the former CEO or hospital entities and are now under investigation from the local district attorney's office.
Amid all the jokes, let's not lose sight of what's serious and important about this sort of abdication of leadership at the top level of an organization. Fraud, by its nature, is difficult to discover. But wouldn't it have been better if the CEO had been ousted and the board culled a year ago?
Let's stipulate that for the record, a stretch limo isn't going to add to your leadership cachet. But you knew that already. A lot can be learned by the way the new CEO is being so open about cleaning up the culture at the hospital.
Rodriguez came to lead Wyckoff from the Brooklyn Work Group for Health Systems Redesign, which is charged with the aforementioned state directive to merge and restructure the group of hospitals. He's been an open book about what he knows about the past misdeeds and vows to make sure that going forward, there's not one set of rules for the connected and another set for everyone else. But it strikes me that those changes may be too late for the community to save what it sees as an important institution.
So what's the key lesson to take from all of this? As a senior leader, you can be bold and visionary with quality improvement projects. You can work hard on changing culture from one of suspicion to one of collaboration. You can install the high-tech software and services to keep track of your billing and collections, you can make huge investments in your electronic medical records, you can hire all the physicians you want, and you can even remake your hospital as an accountable care organization.
But none of it will work if your colleagues don't trust you and your intentions, and certainly not if you're suspected of being on the take. The necessary but not sufficient tool you need to make any of this work is your good reputation. All the rest is window dressing—or, in a more appropriate metaphor, a stretch limousine.
The Department of Health and Human Services believes that best practices, techniques and solutions for obtaining higher levels of quality and safety among hospitals should spread, um, well…like a disease.
Those are my words, not theirs, but allow me to continue with my bad ironic similes and consider that the $218 million the agency is investing in so-called "Hospital Engagement Networks" as Typhoid Mary.
The money, distributed among 26 organizations, will help identify and teach other hospitals and healthcare providers the solutions that have been already proven to reduce healthcare acquired conditions.
As part of the public-private Partnership for Patients program, the agency will distribute that money among 26 state, regional, or nationwide hospital organizations to be invested in the infrastructure to help train their colleagues on best practices.
According to HHS, the recipients will "conduct intensive training programs to teach and support hospitals in making patient care safer, provide technical assistance to hospitals so that hospitals can achieve quality measurement goals, and establish and implement a system to track and monitor hospital progress in meeting quality improvement goals."
That's a mouthful, but it represents accountability for results.
Some of the recipients are actual hospitals and health systems, others are state, local and national hospital associations.
Ascension Health, the largest Catholic health system in the country with hospitals in 21 states, is getting $8.4 million of the total, to be spent over the three-year life of the program on staffing for meetings, providing the educational materials and remote meeting infrastructure, and providing follow-up care provider support, says Ann Hendrich, vice president of clinical excellence operations for Ascension in St. Louis. Hendrich is heading up the initiative at Ascension.
"A big role that we'll play is how we package and produce our material so that we can bring other hospitals and systems to the same level of performance," says Hendrich, a registered nurse by training.
Ascension will use the funds to update some of the content they've already produced for consumption within the health system for a broader audience in seven of the 10 focus areas identified by the scope of the project.
In the other three areas, Ascension's healthcare professionals and executives can be expected to be among the learners. In any case, they'll participate heavily in all of them.
Infrastructure will be another relatively big spending target for the funds.
"There's significant investment in expanding the technology that supports having this many calls online in a coordinated way," she says. "We'll use our network within Ascension but we could be inviting others into our clinical meetings and we're also packaging our material for the content provider."
Why Ascension? Well, compared to the national averages, it has achieved 25% lower mortality overall, 65% fewer birth traumas, 89% lower neonatal mortality rates, not to mention 94% lower in hospital-acquired pressure ulcers, 74% lower in ventilator-associated pneumonia and 43% lower in central-line blood stream infections.
But Hendrich is focusing not on Ascension's achievements, but rather on the program's offerings, which are rolling out pretty much immediately. Transferring the lessons has all her attention. When I spoke with her a couple of weeks ago, she was already putting the finishing touches on an in-depth program that Ascension will teach in partnership with Intermountain Healthcare on obstetrics—specifically ways to limit birth trauma.
"Part of the role we're being asked to play is to help other healthcare systems understand and adapt the transformation process we've already used in practice," she says.
That's a fancy way of saying that what they do is working, and they want to share it.
The money from the Hospital Engagement Network initiative does not start or stop the work on quality and safety at Ascension, Hendrich is careful to point out. But she's excited because of the quick wins and fast learning that can occur when systems see what has already worked for others in quality and safety improvement.
"This allows us to benefit from the learning of many but also to share our learning with other systems who may be struggling," she says. "One of the characteristics of high-reliability organizations is their deference to expertise. We're not too proud to say we can't always learn from someone else."
Not all the learning will come from big systems to small ones, as you might imagine, given the size of many organizations on the recipient list.
Within Ascension, she notes, sometimes the smaller organizations outperform the larger ones.
"It's not about the size of the organization, but about the processes and how people, processes and technologies react," she says. "I'm not going into this assuming it will always be the large system showing the way."
So what's keeping this exercise from being another wasteful government grant? After all, it's debatable whether a lot of this work would have to happen regardless, given the increasing link between quality of care and outcomes with payment for healthcare services.
"We are not adding any significant overhead to do this work," says Hendrich. "We must do it anyway. The funding supports the dissemination, production and measurement, which a key aspect of this project because what we'll be reporting and collecting requires some more effort."
So without the grant, such activities certainly wouldn't be shared widely or in any kind of formalized training program. At worst, without money to pay for infrastructure and time, some of these techniques for providing better patient care could even been seen as trade secrets—a way to maintain your competitive advantage. All right, maybe that's going too far. But allowing the lessons to percolate organically takes too much time, and in this situation, time lost equals lives lost.
While it's not a true ROI measure, and they're not taking the money back if it's not achieved, HHS goals for the program are bold: a 40% reduction in healthcare-acquired conditions and a 20% reduction in hospital readmissions for participants.
If they can achieve those kinds of results, nobody's going to be asking whether the grant was well spent. They'll want to expand it.
It costs a lot of money and effort to achieve meaningful use standards.
Learning team-based medical practice is difficult.
Young physicians don't want the hassle and long hours of running a business in addition to seeing patients.
I could go on and on. It's true that challenges like these aren't going away. Indeed, they're a necessary part of the transformation of healthcare into a more predictable, more high-quality endeavor.
That doesn't mean they don't cause a lot of upheaval. Some of this upheaval means lots of formerly independent physicians are giving up the business side and joining as employees with hospitals, health systems, and health plans. Some physicians equate that outcome as "giving up."
The challenges of adaptation are real and seismic for every healthcare organization, and they're exceedingly more difficult to deal with for small independent physician groups.
As a result, many independent physicians are throwing up their hands about their ability to remain so in an environment that appears to actively discourage physician independence. These are the practices that are acquired on a daily basis by the nation's hospitals and health systems, whose leadership seems to often equate physician acquisition with physician alignment.
From the physician's point of view, the bottom line is, well, the bottom line. Businesswise, it's difficult, and arguably more stressful, to maintain your independence. There's a degree of safety in employment.
As an employed physician, your job and standard of living isn't quite as dependent on the whims of the federal government or the difficulties of contracting with commercial insurers. Then again, you can't make your own decisions.
So says Russell Libby, MD, the president-elect of the Virginia Medical Society and a frequent commentator on what I write in this space each week. He says giving up your independence as a physician is just that: giving up.
"I'm not sure what employment achieves other than consolidation" he says, arguing that consolidation doesn't necessarily achieve benefit to the community. "That doesn't mean there aren't examples of that, but in a partnership, community benefit is a consideration as it evolves. When you look to be acquired, it's because you're giving up."
I'm not sure that the majority of his professional peers agree, but it's nice, as a healthcare consumer, to know that there still is a choice. For now, even Libby agrees that independence appears to be the tougher road in the future, albeit a more rewarding one.
As an independent physician, you can't afford to sit on the sidelines as the industry changes, he adds. And he concedes that while employment could be the right choice for some physicians, there are big downsides.
"If you're employed you're much more a cog in the wheel," he says. "You don't have to worry about how the machine works, and you are insulated. But you're going to be scrutinized in ways you haven't been scrutinized before, which will directly impact your compensation."
Libby, a pediatrician in a 16-clinician multispecialty practice in Fairfax, is, with his partners, in the process of evaluating a potential business partnership with a local hospital. But the deal would stop far short of employment.
"You have to face the fact that you have to develop an approach to team care and understand how to evolve systems that don't necessarily stratify and create questions of authority and that are geared toward solutions," he says of the effort.
He cautions health systems to be wary of envisioning large-scale physician employment as a panacea—something we write about frequently at HealthLeaders.
"[Employed] docs will come in and out of their jobs, and won't be fixtures in the community," he says. "Hospitals trying to 'own' their community will find their strategy will not necessarily pay off if they can't trust some of the care to those outside of the hospital. That will be necessary to do ACOs."
As the massive shakeup in healthcare continues, Libby envisions a point at which independents and employed docs will reach a new equilibrium, but he's not necessarily optimistic that independence will win out. He's sanguine about the prospects, but isn't convinced that employing a greater percentage of physicians will lead to higher quality healthcare.
"There will be a saturation point, but you disenfranchise the medical community when you remove the incentives for them to be responsible business owners," he says. "Medicine is a business. [Hospitals and health systems] will stop being so enamored of hiring physician groups and will realize that they are better off partnering with us.
Depending upon whom you ask, it's either a time-honored tradition or a dirty little secret. If you have commercial health insurance coverage, at some point or another, you've been paying for the shortfall in reimbursement from state and federal governments, whose Medicare and Medicaid programs, and thus the people they represent, pay less than you do for the same services and goods. Most of us continue to do so.
Actually, I don't think it's either a time-honored tradition or a dirty little secret. It's neither. It's politics and its little brother, economic distortion, at work.
Whether or not you are actually worse off for the practice is debatable. Assuming most of the beneficiaries of commercial insurance coverage are employed (other than dependents), you are also a taxpayer—so in theory, you're getting a break on one side and paying for it on the other.
But there's a big debate going on about how long these general subsidies can continue, given that healthcare costs continue to rise faster than the rate of inflation, and more importantly, that employers have gotten wise to the game.
None of this is any news to you if you're on the senior leadership team at a hospital, health system, or physician practice. In fact, it's a fact of life, and you're darn lucky it still continues, in a way.
But there's a big debate going on about how long these general subsidies can continue, given that healthcare costs continue to rise faster than the rate of inflation, and more importantly, that employers have gotten wise to the game.
Recently, I wrote as part of a column on the Medicare Payment Advisory Commission's recommended cuts in inpatient and outpatient payments to hospitals that while I once thought that such cost-shifting behavior would die a quick death as employers developed more sophisticated ways to value healthcare quality, I'm no longer so sure.
After all, healthcare is a growth industry for a reason, and I outlined my reasons, with research to back it up, that cost-shifting is far from dead.
Predictably, I got a lot of responses from readers who disagreed. One of the best was from a reader who pointed out, correctly, that large companies are increasingly splitting their healthcare contracting among dozens of high-quality, high-volume hospital partners.
By doing so, they guarantee a certain volume for the hospital or health system and get an excellent price per service for such guarantees, but also, they can assume excellent outcomes from such providers and if they don't get it, there are remedies.
They can also cut out the middleman, the insurer itself, if they like. All of this is true. But for every Pepsi that sends its cardiac and orthopedic cases to Johns Hopkins and every Lowe's that brings its heart patients exclusively to the Cleveland Clinic in return for low rates and high volume, there are hundreds of smaller companies that are far behind that curve and could never hope to have the infrastructure necessary to do such things.
I pointed out to her that most Americans are not employed by a Fortune 500 company with the infrastructure to do things like this, and that I remain unconvinced that cost shifting is dead or even nearly so.
Why? Because increasingly, it's not just large, organized entities like Lowe's or Pepsi that have discovered the problem. Small employers have too. And rather than take the paternalistic route, they've elected to let their employees feel some of the pain.
Largely, that group doesn't understand that the gobs of cash departing their bank accounts whenever they darken a hospital's front door go toward such an inefficient and unfair system. I can tell you this is true from recent personal experience.
Cost shifting over the long term doesn't work in any industry. But as I learned in economics 101, the short term can still last a very long time. I think we're far from the end of the cost shift in general, even if employers have largely gotten wise to the game.
As we chatted over email, my critic and I came to agreement on that score, at least. She conceded that her payroll deduction for healthcare costs has tripled over the past four years and her out-of-pocket costs have increased dramatically as well.
Whether you love or hate healthcare reform, you should rest assured that the investments you're making on quality and care coordination are worthy ones, because when Republicans tell you the reform law be repealed, don't fall for it. I don't think they really believe it.
Like many of you, I try to tune out the political gasbags during most seasons in my life. Of course, primary season when most of the gas is expelled, ad nauseum. I reluctantly pay attention when it comes to election season, but I start with the presumption that a politician is lying to me, at least in some way, and I make my decisions from there.
As we watch the Republican primaries to determine which candidate will oppose President Obama this fall, I have paid attention, at least as far as the conversation concerns healthcare. Hopefully the rest of you are not quite as cynical about our democratic process as I am, but here's why I think that, as a group, they're lying about repeal.
Healthcare, and repeal of the Patient Protection and Affordable Care Act of 2010 specifically, is playing a huge role in the primaries so far. That's not surprising. The vast majority of Republican voters hate "Obamacare," and each candidate pledges that if you'll elect him president, they'll repeal it.
Never mind that Congress is the only authority that can do this. Secondly, though Congress can cause problems in its implementation in other ways, it would be tough to repeal entirely, because 60 Senate votes would be required.
Many say this could be circumvented by using budget reconciliation, because the bill was enacted that way. The bottom line is that though a plan has been outlined by which a repeal could be done, what are the odds?
Vegas is pretty good at this and could probably do better than me, but since they don't release gambling odds on political promises, I'd put the likelihood of repeal through reconciliation at 10% or less. Speaking of which, if you like to gamble on political outcomes, there are much easier ways of doing so, as many of our Congressional leaders have so recently and pathetically demonstrated.
But back to the subject at hand.
So I'm predicting they'll try to repeal, but they won't try very hard. What's easier? Repealing and replacing the ACA with something else, or making a halfhearted attempt at repeal so that you can still blame Democrats wherever the law screws up? I think you know the answer.
We already know how the majority of you feel through our surveys, in which only 41% of you said you wanted the law repealed. Because its provisions so drastically affect the way you run your business, you've likely been up to your ears in leadership—and financial—issues that stem from both the Act and a few other government regulations you have to comply with in a very short time, such as ICD-10 and the HITECH Act.
As a result, those who want repeal from your ranks are likely even smaller now because of the uncertainty it would create surrounding long-range planning and investments.
As I mentioned, I'm not a political expert, nor do I play one on TV. I also slept in my own bed last night, not at a Holiday Inn Express. So take this prediction with a grain of salt, but I don't think healthcare is really a core issue in this election, especially, as looks increasingly likely that former Massachusetts Governor Mitt Romney will win the GOP nomination.
Republicans are clearly playing to their base when they talk about repeal, but history shows that anything that gives something to voters is very infrequently repealed. Never mind that Romney's the guy whose lasting political legacy is the creation of "Romneycare" in Massachusetts, a universal coverage law that it very similar to "Obamacare" in that it's largely intended to provide "coverage" to the uninsured.
In that regard, it has succeeded. But in large part, coverage is in the eye of the beholder. For hospitals and health systems, it means largely playing games with the same pot of money. Revenue is largely the same, but the number of patients for which they get some payment is increased. Some deal.
Never mind that Romney's legacy has been plagued by cost overruns since it started. Other surveys show that the majority of people like the provisions in the ACA that, for example, eliminate screening for pre-existing conditions by insurers, and that force businesses with more than 50 employees to either provide insurance or pay a penalty.
The one part the majority consistently opposes: the individual mandate, the constitutionality of which the Supreme Court has yet to rule on. Once you give something to people, especially when it absolves them of some responsibility, it's hard to take it back.
Finally, to stay in power, Republicans would likely have to replace the ACA with something else. After all, with apologies to Ernest Hemingway, the existing "system" was first slowly, then quickly, bankrupting us as a nation. If we do go back, where does that leave hospitals and health systems that have invested copious amounts of time, money and talent into readying and reinventing themselves for the changes? I'm not sure, but I can guarantee it would be a very bad place.
So for all these reasons, and despite all the bloviating about healthcare from your national candidates for the office of president, don't believe it. I don't think they do.
Most of the provisions of the much-discussed, and much feared, Patient Protection and Affordable Care Act, won't take place until 2017. But making the changes necessary to compete in a drastically altered reimbursement and service environment is far from as simple as flipping a switch in 2017.
In fact, here in the first week of 2012, if hospitals and health systems have not yet begun the work of making significant changes to just about everything they do—including patient care protocols—they are already significantly behind the change curve.
Indeed, this is true for just about any entity that provides healthcare services and depends at least partially on government reimbursement. But as you know, government is not the only entity pushing change.
As I discovered during my reporting for our most recent intelligence report, despite widespread opposition to some of the provisions in the PPACA, the majority of respondents to our survey suggested that it will improve healthcare quality.
Why? Put simply, because revenue and survival are at stake. Certainly some healthcare entities see their death warrants in the signed legislation. Staff and service cuts are sure to be a big part of it as well, and those are well under way.
So no matter which way the political winds blow—they're at hurricane force now and gathering strength—there's no going back. Even in the unlikely event that the PPACA is repealed or otherwise weakened by Republicans after the 2012 elections, private market forces have also recognized the problems with value and quality. And that's a significant factor forcing change.
So never mind the government, says Peter Brumleve, chief strategy officer at Scott & White Healthcare in Temple, TX, and an advisor for the intelligence report.
"Regardless of whether [the PPACA] gets repealed or funded, private market forces will still act in trying to fix the fundamental issues in healthcare," he says. "So we look at the act as a stalking horse for what we eventually have to do as a system."
So despite the uncertainty and even fear about the future, healthcare leaders are getting on with the process of transformation.
Interestingly, at least for me, is the belief held by a majority of our respondents that the new landscape will offer better access for the majority of people to healthcare services. Before it was passed, the key attribute of the PPACA, at least from supporters' viewpoints, was that it would provide health coverage to the majority of the uninsured. Healthcare leaders remain unconvinced.
In fact, only 40% of our respondents believe that PPACA will lead to better access to healthcare services. That's because they anticipate that a bitter irony of the law's legacy will be that many healthcare organizations simply won't be able to cope with what they see as the law's draconian effect on their bottom lines.
That means such entities, without the financial resources to reinvent themselves, eventually will go away. And they assume that no other entity will find it profitable to enter where those who went before them failed.
I've written about this funky possible outcome before. Such an outcome would indeed be disastrous, but it's far from certain. After all, what does coverage mean if you can't get access because the reimbursement for your coverage is so poor?
Of course, I'm just skimming the surface of the enlightening information we uncovered in the report. Take a look and see if it helps you determine the best strategic options for your organization, whether you lead a multi-site hospital system, a small physician practice, or even a home health agency.
Finally, the silos are breaking down, and healthcare is becoming more integrated. That's something to cheer about—at least for patient care. For healthcare leaders, how to get there without becoming a statistic is the real challenge.
The Medicare Payment Advisory Commission, which makes recommendations on Medicare inpatient and outpatient payment rates, will likely recommend to Congress an increase in inpatient and outpatient payments to hospitals of only 1% in fiscal year 2013, a draft recommendation reveals.
As revelations go, the recommendation is not much of a shocker. For at least the past three years, MEDPAC has made that 1% recommendation.
No matter how you slice it, that rate is below the rate of inflation. Even the most conservative inflation calculations show that it has hovered around 3% for more than the past decade. So in real terms, MEDPAC's likely recommendation represents a cut.
The clear message is that whether or not hospitals are overpaid on Medicare rates, though Congress has a history of playing good cop to MEDPAC's bad cop, both are acting as though hospitals are overpaid.
In fact, plenty of evidence exists that hospitals are losing money on Medicare patients. How much or how little can range from 10% to 30%. They make it up in volume.
Just kidding. They make it up, largely, through cross-subsidization, and many hospitals have been able to make up some of the cuts by doing much-needed process engineering work, among other efficiency initiatives.
But much of hospitals' ability to maintain a small margin still results from cross-subsidization. Indirect subsidies from commercial insurers ultimately pay for inadequate government payment rates by overpaying for their members' care. That's the idea, anyway.
I once thought that cross-subsidization wasn't going to be able to continue to carry that weight for much longer. That was in 2008. Now, as we rapidly close in on 2012, I'm not so sure.
I don't see hospitals padlocking their doors in depressed areas of the country. It happens, but very infrequently. I don't see former hospital CEOs standing in bread lines or wearing sandwich boards. In fact, I see a healthcare system in the US that is still quite healthy overall—at least financially.
In fact, as I wrote a couple of months ago in this space, there is a valid argument out there that cross-subsidization is a waxing, not a waning, force in healthcare today. So maybe a 1% increase is about right, considering the level of disappointment (largely muted) emanating from the usual hospital lobbying groups.
Hospital investment is seen as a golden opportunity, in fact, for several for-profit hospital companies, and even strong nonprofits are on the acquisition trail. Ultimately, I believe that national policymakers have decided that small hospitals are whirlpools of inefficiency in a vast sea of waste, and that this kind of weak updating of payment rates, combined with the tools of ICD-10 compliance, meaningful use standards, and several other national initiatives will serve as a blunt tool to encourage consolidation and efficiency.
Whether a 1% increase next year will make hospital leaders' lives incrementally more difficult is really beside the point.
The question is whether years of 1% increases will ultimately result in some hard decisions on consolidation over the long term. When the breaking point is reached is different for every organization, but many CEOs should have an idea of what that level is.
Too many, in my estimation, don't. At least not until it's too late.
