Comparability doesn't matter

I was talking about public reporting the other day with an MD colleague.  He pointed out that hospitals often have different definitions for a variety of measures, like ventilator associated pneumonia (VAP).  Therefore, he pointed out, public reporting of such measures can be problematic.  I said, "No, it's not a problem."

Why not?

Let's look at what we are trying to accomplish.  Simply put, we want the hospitals, doctors, and nurses to engage in systemic process improvement in their institutions.  What are the elements of doing that?  Brent James lays them out quite clearly, based on the concept of shared baselines:

1 -- Select a high priority clinical process;
2 -- Create evidence-based best practice guidelines;
3 -- Build the guidelines into the flow of clinical work;
4 -- Use the guidelines as a shared baseline, with doctors free to vary them based on individual patient needs;
5 -- Meanwhile, learn from and (over time) eliminate variation arising from the professionals, while retain variation arising from patients.

That is the essence.  Now where does public reporting come in?  The impetus for transparency of clinical outcomes can be found in the writings of MIT's Peter Senge.  In The Fifth Discipline, he discusses creative tension.

[T]he gap between vision and current reality is . . . a source of energy. If there was no gap, there would be no need for any action to move toward the vision. Indeed, the gap is the source of creative energy. We call this gap creative tension.

Imagine a rubber band, stretched between your vision and current reality. When stretched, the rubber band creates tension, representing the tension between vision and current reality. What does tension seek? Resolution or release. There are only two possible ways for the tension to resolve itself: pull reality towards the vision or pull the vision towards reality. Which occurs will depend on whether we hold steady to the vision.

So the deal is this.  You establish an audacious goal for your organization, one that truly stretches everyone.  You publish that target for the world to see, and you also regularly publish your progress towards that target.  The gap between the current state and the future state helps to drive your organization towards the target.

As I have mentioned: 

Transparency's major societal and strategic imperative is to provide creative tension within hospitals so that they hold themselves accountable. This accountability is what will drive doctors, nurses, and administrators to seek constant improvements in the quality and safety of patient care.

There is nothing in this construct that requires one hospital to use the same metrics as another.  Indeed, I would suggest that having an external authority (e.g., a regulatory agency) establish a common metric will often undermine, rather than support, process improvement.  Why?  Because the internal constituencies who must buy off on the need for process improvement will question the applicability and accuracy of that metric.  Resentment will arise, and progress will slow down.

I can feel people getting antsy now.  "We need comparability in public reporting so consumers will know how to choose among hospitals."  Nonsense.  There is virtually no evidence that the public uses clinical information from websites to make choices as to where they get treatment.  Jeez, when Bill Clinton needed heart surgery in New York, where mortality rates of the hospitals are publicly available, he went to one that had among the highest figures.  (OTOH, maybe Hillary sent him there . . . but that's another story!)

I have addressed this point before, also.

There are often misconceptions as people talk about "transparency" in the health-care field. They say the main societal value is to provide information so patients can make decisions about which hospital to visit for a given diagnosis or treatment. As for hospitals, people believe the main strategic value of transparency is to create a competitive advantage vis-à-vis other hospitals in the same city or region. Both these impressions are misguided.

Seriously, are you really likely to decide on where to get ICU care based on the rate of VAP?  Even for elective surgery, you are most likely to go to the hospital or specialist recommended by your primary care doctor.  If you have cancer, you don't choose hospitals based on infection rates.  You do your research and make your choice based on many other factors (e.g., empathy of doctors, availability of clinical trials.)

I want to be clear that there is value in having a government requirement for transparency, but -- in most cases -- I would leave it up to the individual hospitals to use the definition of each metric that most suits them.  If we tell them what metric to use, we have taken away the self-accountability that we want.  Require them to post their goal and their progress.  Let them add editorial comments about why they chose the metric they did.  What we want to see is that they improve and that they maintain and sustain their improvement. Comparability with other hospitals simply does not matter.

Individual or systems error? Or, leadership lapse?

Was Baltimore Ravens Billy Cundiff at fault for that missed field goal attempt last week, or was he the victim of a systems error?  Or, was it the coach's fault?

This is not about Cundiff trying to pass off the blame. He took full responsibility for the miss.

Stefan Fatsis offered his view on Slate.  An error on the Gillette Stadium scoreboard caused Cundiff to think he had one more down to prepare for his kick.  Fatsis explains:

Because the sidelines of an NFL game are crowded—scores of players, coaches, staff, and game officials, a tangle of benches, equipment, and cables, all crammed between the two 30-yard lines—the best way to follow down and distance, and to watch the plays, is on the scoreboard, which is how Cundiff coordinates his pre-kick routine. On Sunday, during what would be the Ravens’ final set of downs, Cundiff completed his first-down prep and checked the scoreboard: second down. He ran through his routine and looked up at the scoreboard again: third down. 

Then, suddenly, chaos on the sidelines. Coaches were screaming—from the opposite end of the field to where Cundiff was thinking his third-down pre-kick kicker thoughts—for the field-goal unit. The play clock was ticking and Cundiff, as per normal, was back from the sideline and farther from the line of scrimmage than his teammates. As he was not expecting to go in yet, he had to run to get into position for a game-tying kick.

Then there was a quick snap to avoid exceeding the allowed time on the play clock.  Cundiff's kicking form was off, and the ball went wide.

And now look at this leadership decision:

The Ravens, of course, could have made all this confusion moot by calling a timeout. Instead, coach John Harbaugh decided to let Cundiff run on the field and kick.

What was the coach thinking?  We get it directly from him here:

With the play clock winding down, it appeared that Cundiff might have benefited from a timeout. But coach John Harbaugh said he didn’t think about calling the team’s final timeout to slow things down for Cundiff and the field-goal unit.

“Yeah, that never occurred to me,” Harbaugh said. “I didn’t think that. You know, looking back at it now, maybe there was something we could have done. But in the situation, it didn’t seem like we were that rushed on the field. [I] thought we were in pretty good shape.” 

He also put the blame right back on the kicker, saying:

Sometimes the kicker is in back, he’s on his own, he’s at the net, and they get themselves in that place to kick a field goal.  He might be looking at the scoreboard . . . but he’s also in communication with Randy [another coach]. Those guys knew, or should have known, what the down and distance was.

There is one thing we know from the world of hospitals:  You should always take a timeout.

Something we could learn from changes in referral rates

Michael Barnett and colleagues published an article in the Archives of Internal Medicine that documents a rather large change in the annual rate of referrals to other physicians from physician office visits in the United States. "Trends in Physician Referrals in the United States, 1999-2009" concludes that the probability that an ambulatory visit to a physician resulted in a referral to another physician increased by 94% (from 4.8% to 9.3%) during this period.

The authors are not sure why this happened.  One hypothesis they toss out for future study is that physicians are under pressure for time and therefore refer more. They note that "physicians are increasingly faced with more to do during the typical visit despite no meaningful change in appointment duration in 2 decades."

Whatever the reason, this change in behavior has a direct link to the rising cost of health care in the country.  Specialists who see patients generally charge more than primary care physicians for a visit.  Plus, a visit to a specialist is often likely to lead to a procedure or other intervention, again at an additional cost.  Those specialist visits, in turn, are characterized by a huge variation in practice, providing a prima facie case that the care delivered in those offices is not driven by evidence.

The article provides a hint of some additional research that might shed light on the efficacy of different rate structures in influencing referral patterns.  The authors say, "This trend was consistent across all subgroups examined, except for slower growth among physicians with ownership stakes in their practice . . . or those with the majority of income from managed care contracts." 

I'm not sure what the ownership connection might be, but the managed care connection is clear.  Even under a fee-for-service rate structure, insurance companies have enforced certain referral standards over the years, and doctors seeing those patients would probably be sensitized to the desires of those payers to avoid higher cost referrals.

Here's the hypothesis I'd like the authors to test:  Would we see a difference in referral rates if we were to look at patients who are covered by capitated, or global, contracts compared to those covered by fee-for-service contracts?  Given the dearth of information published so far about capitation -- and given the religious fervor evidenced by some proponents and their propensity to avoid transparency about results -- wouldn't it be good to see if it makes a difference?  Some kind of objective test would be valuable.

A dad who missed the point

Courtesy MA Futsal Association

Winter brings indoor soccer in the form of futsal, and I have been refereeing those games.  This is a fast sport -- a small-sized ball designed with very little bounce -- played 5v5 on a basketball court.  Often lots of goals are scored.  Since the game favors teams with good foot skills and passing, some matches are lopsided.  That was the case today, with some Under-10 boys on the gray team pummeling those on the black team, most of whom were a year younger.  At halftime, it was 9-2.  By the end, it was 20-5.  (For the official record, we only record a six-point spread.)

In our league, a parent volunteers to keep score, and in this case, the man was father of one of the black team players.  He was a clear Type A person, and you could watch his frustration mount as his son's team fell further and behind.  They just weren't playing well enough for him.

At one point, he said to me, "You're going to report this score, right?  So they can see how badly they did?"

I was busy officiating, so I didn't have time to reply beyond, "We only record a six-point differential."  But on the way home, I had a few thoughts.

Did he think that the boys on his son's team didn't notice that they were getting smoked?  Does he think it is developmentally appropriate to emphasize to nine year-olds that they played poorly?  Did he realize that the team they were playing was mainly boys a year older?  Did he notice his son's coach, who was quietly and persistently positive with the boys notwithstanding the score?  Did he notice that the boys were having fun, notwithstanding the score?  Did he notice that they never gave up and played hard the whole time?  Did he notice the "moral victory" celebration that occurred each of the five times they were able to score?

And what did he say during and after the next game, when they were playing a team of their own age?  They won 10-6 after briefly falling behind 0-3.

Spear (Part 2) at MIT Webinar

Creative Experimentation: Developing a Skill Critical for Managing Complex Operating Systems (Part 2)

MIT SDM Systems Thinking Webinar Series

Steven J. Spear

Senior Lecturer, MIT Sloan School of Management; Senior Lecturer, MIT Engineering Systems Division; Senior Fellow, Institute for Healthcare Improvement; and author, The High Velocity Edge

Date: January 30, 2012

Time: Noon - 1 p.m. EST

Open to all

Register

 

A broad-based capacity for experimentation is critical for organizations to succeed because the systems in which people are embedded are increasingly complex and fast. For instance, medical treatment used to be accomplished by "going to the doctor," a sole practitioner supported by a handful of other professionals, who mastered a body of scientific knowledge through steady practice. Now, thanks to the tremendous advances in medical science and technology, diagnosis and treatment span myriad disciplines and countless professionals. Doctors have to be masters in their own fields and masters in coordinating care delivery tailored to individual patients' needs. Experience can no longer be steadily accumulated over time. Rather, teams must experiment off-line so they are prepared for the variety of situations they'll face in real time. The same challenge of having to build knowledge in particular disciplines and learn quickly how to pull the pieces together into coherent efforts is characteristic of manufacturing design and production, services, information technology, and more.

 

Steven J. Spear's webinar will illustrate this migration from simple and stable to complex and fast, with examples of how organizations have learned to succeed by cultivating a capacity for high-speed, broad-based experimentation. A question and answer session will allow listeners to speculate about what would be involved in developing such a capability in their own organizations.

Broken escalator leads to a crisis

A friend found this wonderful video in an article by Renskee Visscher at TEDx Maastricht, who notes:  "It’s an exaggeration of our dependency on modern technology… at least I hope it still is."

If you can't see the video, click here.

How do we feel about hospitalists?

I had missed this original MedPage Today column by George Lundberg back in November and so was pleased to catch it as a re-run over at Kevin, MD.  George asks the question, "Are Hospitalists a Boon or a Bane, and for Whom?"

A hospitalist, you will recall, is an internist who is the surrogate for your primary care doctor when you have been admitted to the hospital.  Before the hospitalist movement started in the mid-1990s-- thanks in great measure to Lee Goldman and Bob Wachter at University of California San Francisco -- your PCP would be in charge of your care at the hospital. S/he would visit early in the morning before taking office appointments and then again in the evening to check in on you.  If important issues came up during the day, someone at the hospital would call the PCP to determine the course of action.

The idea of hospital medicine is that these trained doctors are there full-time to check up on you and intervene as necessary in your care.  Being on staff, they would know the in's and out's of the hospital, the flows with radiology, physical therapy, laboratories, and the like.  They could also explain things to you and members of your family when it was convenient for you, rather than outside of normal business hours.

George notes, however:

I hear many anecdotes of problems such as:

1. Handoffs of patients from the community physicians to the hospitalist and back being fraught with communication gaps and flaws with increasing likelihood of resulting medical errors.

2. Hospitalists having to do the "hospital's bidding," usurping physician autonomy and judgment to the corporate advantage of the hospital.

3. Hospitalists refusing (or being unable) to provide competent and comprehensive care to patients under their responsibility.

4. Hospitalists serving as little more than triage persons, routing every little symptom or finding to this or that specialist (headache to neurologist; tummy ache to general surgeon; heartburn to gastroenterologist; cough to pulmonologist; chest twinge to cardiologist; anxiety to psychiatrist; skin blemish to dermatologist).

I was rally taken aback by this.  Maybe my sample is biased, but the experience I have leads me to have the highest regard for hospitalists and for their role in taking care of patients and families. Far from triage persons, they have the time to get to know patients and avoid the need for more costly specialty care. I have found them to be the leaders, too, in process improvement designed to reduce harm and ensure safety.  Here's an example from BIDMC, where hospitalist Melissa Mattison developed a  protocol for reducing the likelihood of falls among elder patients.  And here is hospitalist Julius Yang explaining the fundamentals of Lean process improvement. 

Indeed, primary care doctors can no longer carry out those tasks.  (The exception is concierge doctors who limit their panel of patients to just a few hundred people.)  PCPs are overwhelmed by the demands of their office practices.  Were they to try to visit their admitted patients, they would have little time for in-depth assessments.  Also, they would find themselves left behind on the latest clinical processes in the hospitals.  And they certainly would not be effective in implementing process improvement in the complex hospital environment if they could only be present for a few hours.

But let me pose the question to this audience.  The comments on George's initial article and on Kevin's reprint tended to be negative about hospitalists.  What has been your experience?  If it has been negative, please answer this:  How well do you think your PCP could have taken care of you in the absence of the hospitalists?  Do you think you would have had a better experience?

Jonathan Byrnes on inventory optimization

MIT's Jonathan Byrnes presented a terrific webinar last week.  His topic -- inventory management -- has a lot to do with all kinds of businesses, including hospitals.  I want to summarize some key points for you.  (For those who want learn more, Jonathan has his own blog, which I highly recommend.)

The major point of the webinar was that there is a huge difference between inventory optimization and inventory management.  Jonathan puts this in terms of a paradigm shift:

In the past, the job of the supply chain manager was to optimize the flow of goods into and out of the storeroom.  For example, reducing the inventory of a SKU that lost money was viewed as success.  But as Jonathan puts it, "If you optimize something that is stupid, the result is still stupid."

He urged us instead to consider the earning power of inventory, to change from minimizing inventory cost to maximizing its earning capacity.  Inventory represents a significant portion of a company's invested capital, and you want to put that investment to its most productive use.

If you look at your task as maximizing the return on invested capital that is represented by inventory, many other aspects come into play.  Look at this comparison of the factors which would be considered in the standard model and the one for which he advocates.

In the old model, all those factors in the right-hand column were "somebody else's job."  If, instead, you take a broader view, you realize that those factors must be considered, especially relationships with suppliers and customers.  Each stage of that value chain should be analyzed.

There is a historical context for this transition.  Markets have evolved over the years.

Before mass production, the "market" was how much you could deliver on your horse or in a cart.  With mass markets, full-scale and wide-ranging production and distribution became the norm.  Now, though, precision markets exist, with finely grained purchase and consumption decisions intimately tied to the needs of suppliers, intermediaries, and consumers.  This requires a new view of value creation, one that leads outside the boundaries of the corporation to include the real-time needs of customers.

Jonathan followed with a number of case studies that dramatically illustrated these points.

Autism in France

A friend, a doctor in the UK, wrote me this:

Just back from France where I was horrified to learn that autism is treated only by psychoanalysis there because it is believed to be caused by lack of maternal bonding in the first year of life.  I almost hit a senior pathologist as he held forth.  Medicine isn't always as international as we would like it to be.

Could it be, I thought?  So I did a little Google searching on the topic. The first item was an article from The Lancet in 2007.  Are you ready for this?

In France, autistic children who have psychiatric problems routinely undergo a treatment that has never been tested in a clinical trial and that many parents regard as cruel. Psychiatrists who use the technique claim that it produces positive results, but critics argue that it shows just how far France has fallen out of step with the international medical community in its understanding of the condition.

The therapy, called packing, involves wrapping a child tightly in wet sheets that have been placed in the refrigerator for up to an hour. When children are encased in this damp cocoon—with only their head left free—psychiatrically trained staff talk to them about their feelings. Typically, the treatment is repeated several times a week, and depending on the results and the severity of the child's condition, it can continue for months or even years.

Oh, yes, let's talk about your feelings.

Another report comes from Chantal Sicile-Kira  in 2010: 

When [my son] Jeremy showed autistic tendencies [in the early 1990s], I was told by the powers that be to take him to see a psychoanalyst. The psychoanalyst concluded that Jeremy was autistic because he suffered separation issues from breast-feeding. This the analyst gleaned from watching him spin round objects (which reminded him of his mother's breasts) and chase after one that he had "lost" when it fell and rolled under a piece of furniture.

Well maybe things have improved? I guess not.  A recent movie on the topic, entitled The Wall, begins:

For more than thirty years, the international scientific community has acknowledged that autism is a neurologic disorder that is the cause of a handicap in social interaction. All autists have the same anomaly in one area of the brain, the upper temporal line identified in 2000 by Dr. Monica Zilbovicius. In France, psychiatry, being very largely dominated by psychoanalysis, ignores these discoveries. To psychoanalysis, autism is a psychosis. In other words, a major psychic disorder resulting from a bad maternal relationship.

This confirms the impression received by my UK friend from her French physician colleague.

Now, though, the film's producer is being sued.  According to the New York Times,  

Three of the psychoanalysts whom Ms. Robert interviewed for the film have sued her, claiming she misrepresented them in the 52-minute documentary, which has not yet been screened in cinemas or on television. 

[I]n court filings, Mr. Charrière-Bournazel said the film had been edited to make his clients look absurd. Ms. Robert, he said, presented the project to the analysts as a documentary, though “it was in reality a polemical enterprise meant to ridicule psychoanalysis in favor of the behavioral treatments that are so fashionable in the United States.” 

The film makes no pretense of objectivity, juxtaposing interviews with psychoanalysts with scathing criticism of the field’s precepts. Ms. Robert, 44, describes herself as an anthropologist and said she once wanted to be a psychoanalyst herself. 

“I would have never imagined what I discovered,” she said of her first few interviews for the film. “Then I thought, wow, what I hear is just crazy.

 Yes, it is.

End-of-life preferences on WIHI

Have You Had The Conversation? Helping Loved Ones
Discuss End-of-Life Preferences
January 26, 2012, 2:00 PM – 3:00 PM Eastern Time

Guests:
Ellen Goodman, Columnist, Author, founding member of The Conversation Project

Ira Byock, MD, Professor, Dartmouth Medical School; Director of Palliative Medicine, Dartmouth-Hitchcock Medical Center

Bernard “Bud” Hammes, PhD, Director, Medical Humanities and Respecting Choices®, Gundersen Health System

Martha Hayward, Lead for Public and Patient Engagement, Institute for Healthcare Improvement


Most of us, if asked, say we care a great deal about will happen to us when we’re at the end of our lives. And yet, because we’d also rather focus on just about anything but death and dying, especially if we’re young and healthy or aging well, we’re all vulnerable to what can transpire by default: spending our last few days in an ICU, even if that’s at odds with our needs and preferences. The reasons for this disconnect are complex but often stem from the fact that individual and family decisions come late, are hashed out during a crisis, and in the very setting – a hospital – that promises high-tech and high-intervention cures for just about everything.

This scenario is slowly starting to change. There are now numerous efforts, some medically-based and many more that are grassroots, successfully promoting alternative perspectives and practices so that people who’d prefer to die at home can do so, and benefit from pain management and comfort over costly and heroic measures. But when you get right down to it, “dying well” is quite personal and, as such, needs to start in a personal place: by having a conversation with the people you’re closest to about how you want to die and how they, surviving friends and family members, can feel okay carrying out your wishes. Equally important: initiating or being open to that conversation, perhaps several conversations, when the circumstances aren’t so fraught and there’s time to digest and reflect and integrate the information.

All of this and more are what’s behind a new initiative getting underway in 2012 called The Conversation Project (TCP), which you’re invited to learn more about on the January 26 WIHI. In collaboration with IHI, award-winning columnist and founding member Ellen Goodman and the project’s team members seek to create a cultural movement with one basic goal: to help every American say what they want at the end of life so that family members and medical providers have the guidance they need to respect those preferences. To get there, TCP wants to normalize discussions that can at times feel “too big to broach” by encouraging loved ones to talk to one another when circumstances aren’t so charged – when everyone is healthy – and the environment is more conducive to a good exchange.  Around the kitchen table, for instance, rather than the hospital bed.

To launch a national campaign to bring about this change, Ellen Goodman and members of TCP have turned to many, many experts on death and dying, palliative care, and successful partnerships with patients and families, including two outspoken champions of change on the clinical and community side: Dartmouth’s Ira Byock and Gundersen Health System’s Bud Hammes. With IHI’s Martha Hayward also on board, WIHI host Madge Kaplan invites you to get an early look at a unique initiative in the making from the architects themselves. Increasingly, that’s going to become all of us – ­having “The Conversation” and telling others how it went and what we learned in the process. It’s hoped that many will benefit, including health professionals who often find themselves at a loss for words, brought up short by their training, and caught in the cross hairs of their own and others’ conflicting emotions and wishes. Spread the word and please join us on the January 26 WIHI. 

To enroll, please click here.

Zeno's paradox of hospital prices

I apologize to my non-Massachusetts readers for having yet another column about the insurance company payment situation here in the Boston area, but I know there is a lot of interest around the country about the first state that put in place the kind of health care reform that was modeled at the national level.  Many things are local in the health care world, but the issue of market power is one that is of interest everywhere.  Indeed, there is substantial concern about whether the movement to accountable care organizations will lead to abuses of market power by providers and payers.  The market structure issues that exist in this state, therefore, are of broader interest.

A few days ago, I wrote about the falsity of so-called "rate reductions" negotiated between insurers and the state's dominant provider group.  (How dominant?  See here.)

Today WBUR's always thoughtful Martha Bebinger writes a story with unsubstantiated assertions by insurers that they are acting to reduce the disparity in rates between the provider "have's" and "have-not's."  Notes one, "[I]t will begin to narrow the gap."  Left unstated is how long it would take to end the gap.

Martha gives a potent example of how long it would take to narrow the gap for a particular procedure, based on some existing prices.  Answer:  Never.

Let me generalize this.  Let's assume that one system's overall hospital rates are 15% above another system's.  Let's assume that the higher paid one gets annual rate increases of 2.5%.  How long does it take for the other to catch up under three scenarios:  a 3% annual increase, a 4% annual increase, and a 5% annual increase?

Now, this is not the extreme example posited by Zeno, put this way by Aristotle:  In a race, the quickest runner can never overtake the slowest, since the pursuer must first reach the point whence the pursued started, so that the slower must always hold a lead.  Here, it takes virtually forever in the first case, eleven years in the second case, and "merely" seven years in the third case.

I know it is really difficult for insurance company folks to just fess up to the fact that they blinked.  But why should they admit that when even the Governor doesn't acknowledge the problem?  What's his analysis?  He falls back again on changing the rate structure, when it is clear that a changed rate structure based on existing differentials will perpetuate those differentials.  Here's an excerpt from his state of the state address a few days ago.

The market is moving in the right direction and that's very good news. But it is not enough.

. . . We need to put an end to the "fee-for-service" model. We need to stop paying for the amount of care, and start paying instead for the quality of care. We need to empower doctors to coordinate patient care and to focus on wellness rather than sickness. And we need medical malpractice reform.  .  .  .

I believe that with these tools and the right oversight, we can slow the growth in health care costs significantly. 

  
Martha ends her story:

I wonder if the insurers' efforts to close the gap between higher and lower paid hospitals is one more attempt to show legislators that the market is working without their intervention.  Just wondering.

I amend that slightly:

I wonder if the insurers' efforts at pretending to close the gap between higher and lower paid hospitals is one more attempt to show legislators that the market is working without their intervention.  Just wondering.

Building Bundling Business

An intermediate rate design between fee-for-service pricing of medical services and capitated, or global, payments is the concept of bundled payments.  Under this scheme, the health care organization gets a fixed fee for a given medical condition. A recent article from Medscape Business of Medicine by Kenneth J. Terry addresses some of this issues arising from this kind of payment scheme.  It notes:

There are 3 main types of bundled payment structures:

• Bundling of hospital and physician payments for inpatient procedures;
• Bundling of inpatient and post-acute care for a time-limited episode; and
• Bundling of chronic disease care for a specific condition, usually for a year.

In all cases, if the provider organization can deliver the care for less than the bundled payment, the surplus is available to be shared in some manner between the facilities involved and the doctors.  If it can not deliver the care for the budgeted amount, the loss must then be allocated.

I am going to skip the clinical protocols and other aspects of actual care delivery and focus instead a big business issue regarding this kind of scheme.  I have mentioned it before, with regard to global payments, but it also applies to bundled payments. 

Underneath the global budget, there is still a fee-for-service arrangement establishing the transfer prices among the providers in a network. That GI specialist will still get paid for each colonoscopy. The big thing to work out in this system is the allocation of any surplus or deficit in the annual budget among the various specialists.

This topic is addressed directly in the financial section of the article, "Dividing the Pie."  Here it is:

If healthcare organizations can provide care at a cost that's less than the bundled payments, the resultant savings may be divided between hospitals and physicians in a variety of ways. The most common approach is to pay doctors 100% of their Medicare or private insurance fees and add a gain-sharing bonus if they meet quality and efficiency targets or prevent complications.

Eventually, hospitals may ask physicians to share in downside risk as well. But right now, they're reluctant to do that. They fear that community doctors might not participate in such a program because of their bad experiences with HMO capitation.

Simon Prince, MD, a nephrologist in Manhasset, New York . . . dislikes the idea of hospitals being in charge. Hospitals and physicians both support quality improvement, evidence-based-medicine protocols. and care coordination, he says, but the real problem with bundling is that the hospitals get to decide how the payments will be divided. "At the end of the day, they hold the cards. They have all the leverage in the relationship."

Robert Berenson, MD, a senior fellow at the Urban Institute, concurs with that view and says he wouldn't be surprised if hospitals took the bulk of savings because Medicare's hospital payments represent about 85% of the cost for an inpatient episode of care. But [Michael Zucker, Senior Vice President and Chief Development Officer at San Antonio's Baptist Health System] disagrees, noting that bundling would be impossible without physician cooperation.

[At] Baptist Health. . . the physicians and the hospital had equal voices in the organization, and they decided to split the bundling proceeds 50/50 . . . . Baptist saved $2.2 million in the first year of the pilot, mainly due to lower costs for implants, and 78% of the physicians received bonuses.

Reporter's ABM helps shoot down medical armament in Utah

In this world of medical arms races, it is refreshing to find a reporter who isn't taken in by the latest hype.  It is brave when the story is about a hospital or doctors in one's own town.  It is also refreshing to see a reporter who doesn't just parrot the press release, but -- like the journalists of a previous era -- finds alternate viewpoints.

Kirsten Stewart at the Salt Lake Tribune wrote this piece.  Excerpts:

An independent group of radiation oncologists affiliated with hospitals throughout Utah is hyping the arrival of “the world’s most advanced radiation therapy.”

But it isn’t new technology, nor is it new to the Salt Lake area. And whether the TomoTherapy brand is “a step above” other systems, as described by Gamma West’s founder and chief medical officer, John K. Hayes, is open for debate.

The trick for patients, of course, is finding which treatments, if any, are right for them — a decision complicated by the soaring cost of cancer care in America.

The rise of high-tech medicine has coincided with a decrease in death rates from cancer. But scientists differ on whether it’s directly responsible for prolonging lives.

“We are very medicalized in this country. We think that every predicament in life is a medical predicament and there’s some miraculous solution,” said Nortin Hadler, an immunologist and microbiologist at the University of North Carolina, Chapel Hill and author of Rethinking Aging and Worried Sick.

[A]bout 80 percent of our increase in longevity is tied to our socioeconomic status — “something about the way we live together, whether that’s job security or education levels,” Hadler said.

Biomedical advances, on the other hand, are responsible for about 20 percent, which Hadler says he’s proud of. But he rails against the overtreatment of patients by an industry that he says has “lost its moral compass.”

 

Thanks to HealthNewsReview.org for the heads up on this story.  As noted by Gary Schwitzer, "Hype. Medicalization. Costs. Informed patient decision-making. She fit a lot into this story and deserves a shout-out for the effort."

Rhode Island Quality Institute seeks help

Laura Adams, President and CEO of the Rhode Island Quality Institute writes:

The Rhode Island Quality Institute in Providence, RI is seeking its first Chief Medical Officer (CMO) and its first Director, Strategy and Development. Both of these positions report to Laura.

Founded in 2001, the Rhode Island Quality Institute’s (RIQI) mission is to significantly improve the quality, safety, and value of health care in Rhode Island.  RIQI is a non-profit and a collaboration of leaders in the Rhode Island community including CEOs of hospitals, health insurers, and businesses, along with leaders of consumer groups, academia, and government.  This group is determined to significantly improve the healthcare system in the state by building on the availability and advantages of health information technology.

Chief Medical Officer (CMO) Position (PDF Link).

Director, Strategy & Development Position (PDF Link).

If you know of qualified applicants who may be interested in exploring either of these opportunities, please forward this notice. Resumes should be sent to Michelle Dexter, RIQI Human Resources department at mdexter [at] riqi [dot] org.

The shamans knew

Thanks to Kevin, MD for reprinting an excellent column by Joe Kosterich entitled, "There is scope for harm when ordering tests."  Dr. Kosterich notes:

1. Most symptoms that we experience are not due to disease. A cough may be a symptom of lung cancer but hardly anyone who coughs has lung cancer. Likewise with a headache and brain tumors.
2. Most conditions we see today are not acute emergencies and hence can be given time to resolve themselves. You do not always have to run to the doctor at the first sign of any symptom. Listen to your body.
3. Tests and treatments have an important role but are never free from potential harm. We must always balance the benefits against the risks.
4. We need to get back to treating people and not numbers so as to please governments and academics.
5. The process of setting guidelines needs to be cleaned up.

All of this reminds me of some advice I received from an internist a few years ago.  He said that the main job of a primary care doctors is to decide not to treat someone's symptoms.  I may get the numbers wrong, but I recall him saying that 85% of symptoms just go away after a short time; another 10% can be treated, either simply or in a more complicated manner; and the remaining 5% will not go away even with treatment.

I conclude from this that the shamans and medicine men of olden days had things figured out pretty well.  A person shows up with symptoms.  In most cases, if you just talk to them, sing some songs, beat a drum or jiggle a rattle, and burn some incense, 85% will get over their symptoms.  In other cases, if you administer some herbal remedies -- purgatives, muscle relaxants, anti-anxiety drugs, or anti-emetics -- another 10% will get better.  And for the final 5%, you blame a lack of progress on the "evil spirits" or other supernatural forces.

With a 95% success rate, your career and livelihood is assured!

For more on this and related topics, check a new website called The Naked Doctor.  An excerpt:

Naked Doctor aims to encourage discussion and awareness of the opportunities to do more for health by doing less. It is a compilation of articles, books and other works that highlight overdiagnosis and overtreatment. 

It is a project of Dr Justin Coleman, a GP who works in Aboriginal and Torres Strait Islander health in Brisbane. He holds a Masters in Public Health, and is President of the Australasian Medical Writers Association.

The Joint Commission tries to lead hospital leaders

I was intrigued to read of a new standard, effective July 1, 2012, adopted by The Joint Commission regarding the need for hospital leaders to create and maintain a culture of safety and quality throughout a hospital.  Here it is:

I do not know how to find the previous standard for this topic, so I don't know how different it is.  But this one seems to reflect comments made in the past by JC president Mark Chassin that the industry needs to get better creating and maintaining a true culture of process improvement.  For example, an article by him and Jerod Loeb in Health Affairs centers on this topic.  In a town hall meeting back on April 13, 2011, Mark also noted:

The first premise for taking on this new topic is that I believe we need to do something different in quality improvement. . .  . Our public stakeholders are clamoring for much more rapid improvement that extends over more aspects of the way care is provided . . . . So, the fact that we've made some progress is important, but it's not enough. 

[W]e can learn from organizations that are outside of health care that have managed to deal with very serious hazards much more successfully than health care has. . . . When we're talking about organizations known in this literature as High Reliability organizations—commercial air travel, aircraft carrier, flight decks, even nuclear power—have much better safety records than health care does. [W]hat they actually have in common is that they have very effective process improvement tools that allow them to create nearly perfect processes and a safety culture that wraps around those very highly performing processes and keeps them working at high levels of safety over long periods of time.

This is an excellent diagnosis of the problem, and the contrast between those industries and most hospitals is dramatic. How, then, to draw the nexus between where hospitals need to be and this newly adopted JC standard?  Face it.  If this standard were enforced today, most hospitals would not be accredited.

Sure, a hospital could create pro forma policies that would appear to represent compliance with the standard, but that is quite different from establishing a true culture of process improvement.  In my former hospital, with a full-fledged effort, it took five years to get to the point that we understood pretty well how to accomplish process improvement.  I think if you talked with other leaders like Gary Kaplan at Virgina Mason and Jeff Thompson at Gundersen Lutheran, they would say the same.  And look here for the exposition by Jack Billi at the University of Michigan Health System, who modestly explains that, after years of dedicated work, they still have a long way to go.

As I have stated, The Joint Commission has the unenviable task of enforcing the CMS Conditions of Participation, a hugely bureaucratic set of standards.  Its surveyors' manual relating to these regulations goes into excruciating detail.  Given those requirements, I always found the Joint Commission surveyors to be thoughtful, helpful, and highly experienced people; but to evaluate the new standard copied above will require an entirely different set of assessment skills and personal experience from the surveyors.  How will they be trained to be fair and accurate judges of this standard, to know the difference between real progress in a hospital and window dressing?  Given that they drop in for just a few days every three years, how will they judge progress over an extended period of time?

Finally, this kind of standard is quite different from, for example, the one requiring 16 inches clearance above shelves in a storeroom.  With those detailed standards, when you "fail" enough of them, you need to have improvement plans and you risk loss of accreditation.  If a hospital is found not to comply with this new standard, what will be the remediation process?

So, good for the JC in setting for this standard.  The jury is out as to how it will be enforced and how meaningful it will be.

Let's move to real-time philanthropy

I want to present here a somewhat radical view of how large non-profit organizations like hospitals might more appropriately use the financial reserves they have accumulated through philanthropy.  In short, I want to suggest that virtually all gifts received by a non-profit of this scale should be considered spendable, to be used -- and used up -- for the strategic priorities for the organization over a short period of time, say five to ten years.*

I offer this thought not in any attempt to be critical of the current policies of hospitals, but in the hope of stimulating some discussion.  If this approach were to be adopted, it would require a different viewpoint by boards of trustees and a different approach with many prospective donors. 

Some background.  Virtually all large non-profit hospitals must engage in fundraising to support their clinical, research, and teaching activities because payments from the government and private insurers are inadequate to cover a portion of those costs.  The preponderance of funds received are from individuals and family foundations, from people who believe in the mission of the organization and want to contribute to its success.  Some gifts are offered for current use, but that is a small portion of those received.  A greater percentage of funds donated are placed in endowment-type accounts, against which the institution applies a payout policy.  That policy is usually very conservative, designed to support the perpetual existence and availability of the gift.

It is the word perpetual that concerns me.  In treating donated funds in this manner, the institution has decided that there is an overly important inter-generational aspect of its fiduciary responsibilities.  I want to question that, both as a matter of philanthropy and as a matter of sound business planning.

Let me first acknowledge that it is a good idea to have some "money in the bank" for untoward circumstances, dips in the economy, and such.  Also, of course, there is a need to accumulate some amounts before committing to specific large capital investments.  But let me suggest that the amount of money reserved by most places greatly exceeds the need to cover those contingencies and those projects.

As noted, I'd like us to think instead of a policy that directs virtually all gifts received by a non-profit to be considered spendable.  Instead of constituting a long-term holding account, the funds would be used -- and used up -- for the strategic priorities for the organization over a short period of time, say five to ten years.

Why?  First of all, I do not believe that most donors, were the question put to them in this way, would want their donations put in a decades-long holding account.  I think that most donors want to see their gifts put to use today and in the near future, to improve patient care now, to expand research now, and to enhance teaching now.

Second -- and this is the controversial part -- the establishment of large, slow-payout endowment funds reduces the accountability of a non-profit to the society it serves.  Non-profits are different in many ways from for-profits, which have to answer regularly to investors and thereby prove their strategic and tactical decisions.  The "shareholders" of non-profits are more diffuse, the citizens of the region served.  The success of the non-profit, too, is not measurable by a simple profit-and-loss calculation.  I think we can all agree that an important measure of the effectiveness and relevance of a non-profit is the degree to which it can persuade people to donate money.

A powerful test of an organization's relevance, therefore, is whether it is able to raise money from each generation.  In contrast, the kind of inter-generational transfer of funds represented by a slow-payout endowment accounts weakens the ability of an institution to assess its relevance to the current generation.

I realize that this approach would put non-profits at greater risk.  I am suggesting that this is a good thing.  It is too easy for the management and board of a hospital to get complacent and comfortable when they have a big bank account and use only a small portion for current expenditures and capital budgets.  It is also too easy for them to respond to a turn-down in revenue in a manner designed to preserve those financial assets rather than, for example, to preserve the jobs of people working in the facility.  How many times have we seen hospitals conduct major personnel lay-offs while their endowment accounts remains strong?  To be blunt, these are often instances of valuing money over people.  These kind of decisions can result from overly conservative boards being more focused on the long-run preservation of assets than on an equally important assertion in support of the organization's human capital.

So, let's cut through all that and decide that each generation should be responsible for the financial health of the hospitals in the community.  Sure, have a bit of money squirreled away for contingencies, but test the proposition of each non-profit's value to society by expecting those living today to provide support for today's programs and services.  If an organization cannot meet that test of relevance, let's not plan to keep it on life-support by using money from previous generations of donors.

---

* This could apply to large colleges and universities, too.

Samsung's Smart Window

A really neat invention.  Thanks to Bertalan Meskó, MD (@Berci on Twitter), who notes, "Such windows would look great in hospitals as well.

Thanks for nothing

I have been reading and listening to media reports about recent deals between Partners Healthcare System and insurers in Massachusetts and experiencing a case of cognitive dissonance.  From the reports, you would think that PHS is reducing the rates it gets from the payers.

Well, that just shows the power of PR spinmeisters.  Let's start by recalling that PHS has used its market power for well over a decade to extract payments from insurers that are dramatically above those received by other hospitals and physicians.  Those out-of-market rates were built into the contracts that were to extend a year or two into the future, and the annual increases included in those contracts were likewise out-of-market. 

So, what has happened is that PHS has agreed to lower the rate increase for the last year or two of those contracts and for the succeeding years to something in the 2-3 percent range.  It then claims to produce "savings" of $45 million over two years for Tufts Health Plan and $80 million annually for Blue Cross Blue Shield.

These "savings" mask two phenomena.  First, the base upon which those 2-3% rate increases will occur remains substantially above the rates paid to other hospitals and doctors.  Second, the rate increases that PHS has received are no lower, and sometimes higher, than those granted to other systems whose base rates were already lower.

In short, the disparity between the PHS rates and those of other providers will not drop an iota as a result of these deals, and is likely to increase.

The only good thing about these announcements is that they provide, for the first time, a sense of the tax imposed by PHS on the region's health care budget.  We now see that it can forgo what it has characterized as $345 million in future revenues and still maintain its financial health.  Looking back over the past decade, it is not unreasonable to posit that this system has added in the range of two billion dollars to the health care costs paid by the state's businesses and individuals.  The newly announced deals change little in that regard, extending that hidden tax for years to come.

Thanks for nothing.

Carrying a lot of baggage

In contrast to the story below about treating airline priority customers well, let's turn to baggage handling.  I recently traveled on American Airlines through Miami en route to Boston.  The luggage from my first flight was to be shifted from that airplane to the Boston flight.  I had used some mileage credit to get a first-class upgrade so my bags were tagged with a special red marker indicating "priority handling."  According to AA, this would ensure special and expedited treatment: 

Immediately available system-wide, select American Airlines customers will experience Priority Baggage Delivery. Upon check in, your luggage will be tagged with branded Priority bag tags. And when you arrive at your destination, those bags will be the first ones delivered to the baggage claim area, allowing a swift, convenient exit from the airport.

I got to Logan Airport and waited at baggage claim for 45 minutes until all the luggage had been unloaded.  Mine was missing, so I went to the baggage service desk.  A very nice person looked up my record and said, "Oh yes, your bag missed the connection and is on the next flight."  So the company's baggage tracking information system had worked.  They knew where my bag was and had known for several hours.

Query:  Why hadn't they notified me upon arrival -- or even before arrival when I was aboard the plane?  They knew what plane I was on.  Why have me go through a long fruitless wait at the airport?  If you have such a powerful information system, why not use it to the benefit of your patrons?  Especially your so-called "priority" customers.

Indeed, why can't all customers gain access to the baggage information system on their computers or iPhones?  Sounds like that would be better service and possibly save money for those companies, too.

Airline priorities

First impressions about service issues can sometimes be misleading, especially if you don't understand aspects of traffic flow.  Here was my first impression, and then something I learned afterward.

We start with this scene of a Delta airlines gate area.  It happens to be at the Atlanta airport, but the same configuration is used elsewhere.  (See the Memphis set-up below.) Note the sign indicating two lanes of traffic, "general boarding" and "Sky Priority."  Note, too, the special carpet with "Sky Priority" printed on it.  As you can see, the two lanes go to exactly the same door.

Here's what happens.  When a plane is being boarded, passengers who have the "Sky Priority" status are boarded first and directed to use the right-hand lane.  Indeed, a ribbon is stretched across to prohibit entry through the other lane.  When those passengers have finished entering the plane, the ribbon is moved over to block the priority lane, and the general boarders use the other lane.

I asked my gate attendant why this was done.  She giggled and said, "It is kind of silly, but it makes the Priority passengers feel important."

Priority route

General route

I know this is not a big deal in the scheme of things, but let's calculate how much money Delta spent on those signs, the fancy rugs, the barricades, and so on.  I wondered, "Have they really done research to show that passengers care about having a special lane?"  Early boarding, sure.  But in an industry that never makes a profit, why spend money on something silly like this?

But then I talked to a friend who is on the board of an airline company.  He said, "It is all about traffic control at the gate.  If you don't have a physical separation for those classes of customers who are entitled to early boarding, everybody else just piles up at the gate.  It slows things down, plus the passengers who have paid for or otherwise earned priority status get shoved aside.  Those loyal (and mainly full-fare business) passengers are very important to an airline, and they value unfettered early boarding.  So, we incur a little extra expense to give them higher quality service."

Inventory Productivity Webinar from MIT

Inventory Productivity: Missing Link Between Supply Chain Management and Sales

MIT SDM Systems Thinking Webinar Series

Jonathan L.S. Byrnes

Senior Lecturer, MIT

Date: January 23, 2012

Time: Noon - 1 p.m. EST

Open to all

Register

 

Traditionally, supply chain and sales have been managed relatively independently, despite the critical impact that each has on the other. Systems thinking provides the key to linking these two critical business functions.

 

Inventory productivity, the return on invested capital in your inventory, is the single systems measure that links these two cornerstone functions. This webinar will: 1) explain the central importance of this critical metric; 2) describe how to measure inventory productivity in a practical way; 3) outline the levers that both sales and supply chain managers can use to radically improve inventory productivity; and 4) describe how leading companies have created core processes for sales and supply chain managers to work together to achieve stunning results.