Wednesday, October 21, 2009

Question for Glenn Steele and colleagues

Much has been rightfully made of the success of the Geisinger Health System in delivering high quality care at a lower cost. Here's an article from that discusses the issue.

A pertinent quote:

"Medical care is more fragmented in most hospitals, with many doctors self-employed or working for independent groups, and insurance provided by separate companies. That pits those groups against one another economically. In a fully integrated system, like Geisinger's, everyone benefits more easily from holding costs down and improving care, experts said."

Question: How much is due to the common bottom line between the MDs and the hospital, and how much is owning the insurance company? Also, how much of this is transferable to other settings that do not have the dominant market position enjoyed by Geisinger?

Glenn and colleagues, can you please reply?


Anonymous said...

Although it is absolutely true that models such as Mayo, Cleveland and Geisinger are not completely transferable to other settings, there is absolutely NO reason that other systems cannot study their models and abstract their best practices which might be applicable elsewhere. I am beginning to tire of the "but we're different" whiny tone of these constant objections. You and I agree, Paul, that the "but we're different" objection is used throughout health care to obstruct change as much as prevent poor reform efforts.
Of course it's because they have their own insurance company and because their docs are on salary!
As I have said many times before, the traditional insurance company mindset no longer belongs in health care; and docs and institutional providers have to have a shotgun marriage - among many other systematic reforms.
Will this be pretty or pleasant? No - just google Carillion Health in Roanoke, Va., which tried (is still trying?) to convert to the clinic model, to find out how nasty it gets.

ps why is my big mouth suddenly singlehandedly holding up your comment section? Where'd everybody go??!! ((:


Anonymous said...

Mr. Levy, I discovered your blog some time ago but have never contributed commentary.

Although this is not pertinent to the subject at hand, I'd like your advice/opinion -

Is it really much better for one possess a Medical Degree, if one would aspires to become a healthcare administrator?

I am currently a Sophomore Biology major within an Honors Program and I have gathered that at this point in my life, I am not at all focused on attempting entry into medical school.

Considering my current personal interests and aspirations, I feel pursuing a Masters degree in Public Health or Healthcare Administration would be more personally advantageous than would be, say, pursuing a Medical Degree at this point in time.

Please be honest- I'd like to know if I'm wasting my time/energy on a presumed attainable goal, that is not truly possible.

Advanced thanks and appreciation for your counsel and apologies if frustration arises from my "Anonymous" identity.

Bob said...

It is important that the goals of the organization are closely aligned with the goals of it's staff. Sounds simple but could lead to disaster if not followed.

For instance in our company (staffing) if we had our Sales team, Recruiting team, and Account Managers all earning commissions on different drivers (hours worked, number of placements, margin, length of assignment, etc) then everybody is striving for a different outcome. The recruiter won't care about the margin (or pay) for the fte, but that may be paramount to the Account Managers paycheck, which in turn leads to friction and conflict. Align those however and everybody pushes for the same outcome.

Even more important though is the staff's buy-in of the leader's vision for the organization. From the OR Doc to the Janitor; everybody needs to believe in that vision - is it providing unsurpassed customer service? building the best sproket on the market today? The challenge of course is the buy in. If employees feel that the company cares for them and their success, they in turn work harder to make the company a success.

Hey, these are my first attempts at bloggin and commenting - hope it's not too all over the place...

Barry Carol said...

While I personally would prefer it if doctors were paid on a salary plus bonus model as opposed to fee for service, I don’t think that’s a significant factor in Gesinger’s cost and quality performance vs. urban academic medical centers. Also, as I understand it, Kaiser achieves good results in the San Francisco Bay area, so I don’t think the urban / suburban vs. rural issue is very important either. I believe the most important factor is the culture and the belief in the culture among physicians who drive virtually all of the utilization of healthcare services. Electronic records are also important, especially with respect to reducing duplicate testing and adverse drug interactions.

It seems virtually impossible to get everyone on the same team (and page) if the doctors are not also employees of the hospital. At the same time, even if they are, if the bonus metrics are tied mainly to revenue generation, that’s not conducive to cost-effective care either. With respect to the insurer / payer also owning the hospitals and employing the doctors, that’s the HMO model taken to the next level and a large percentage of the population prefers PPO’s to HMO’s, so market acceptance is likely to be a problem.

Finally, even if the large academic medical centers wanted to be more like Mayo and Geisinger, and even assuming they employed all the doctors who practice at their hospitals, cost-effective care is likely to mean less revenue and the need for fewer people, at least in the short run, unless the organization can make it up on treating more patients. That’s not an easy sell to the staff or the Board of Directors.

If we are interested in bending the medical cost curve, we should embrace electronic records, tort reform, ferret out fraud much more aggressively, encourage more widespread use of living wills and advance directives, change from fee for service to bundled payments for expensive surgical procedures, and group doctors and hospitals into tiers based on quality and cost-effectiveness with different copayment levels like we do for drugs today. Good price and quality transparency tools would also be helpful. It’s a lot easier, I think, to attack the medical cost growth curve through changes in payment policy and the other reforms that I mentioned than to attempt to change the medical culture and the mindset of the majority of doctors.

Carl said...

I agree with Barry. The selling point for better care does not always result in lower capacity. The more aware the public is about hospital outcomes and quality of care, the more market share they are able to capture. This is going to be how hospitals will have to start thinking about how they market thier services to the community. You can see this being played out already with the globalization of healthcare. Cost to the patient isn't the only factor or many would travel to countries with poor outcomes. Cost combine with data that supports safe, quality care attracts more patients.

Anonymous said...

I do not think the dominant market position is much of a factor in the high quality/low cost position that organizations like Geisinger supposedly enjoy. I also think it does not have much to do with owning the insurance company (maybe a small portion). How much of Geisingers patient volume and revenue come from their own insurance plan?

IMO the main driver has to do with common, aligned goals. At most hospitals the medical staff is not impacted directly by initiatives to reduce cost or utlization at the hospital so they have no interest and no gain or loss from participating. The medical staff structure protects them. Even if a hospital owns a large multi-specialty group it is difficult. The Geisinger's have spent years creating a culture of teamwork. Hospitals that decide to integrate, buy MD practices and change MD economic incentives will not be be guaranteed that everyone will be on the same page.

It is the structure and culture of organizations like Geisinger that are the main resaons for their success. We can learn much from them and emulate many attributes like the first poster mentioned.

76 Degrees in San Diego said...

Anonymous #2 -

No, but...being a successful administrator in healthcare is not easy and there is no clearly proscribed course. You first need to be able to deal with people humanely. Having an analytical backround(math is good) is useful. Many decisions that we physicians make in healthcare seem to be by the "seat of the pants" - which is not the best. How do you deal with fiscal adversity? - you will find it in healthcare. How about when people are really mad at you personally - how do you react? You need to be able to understand issues from objective and visceral viewpoints and deal with people/situations that are seemingly intransient in a successful way. So, get a broad based education, enjoy people, keep up your math, have an open mind to not be locked into the past, and volunteer in a hospital. Good luck!

76 Degrees in San Diego said...

oops! forgot the "g" in intransigent - sorry!

Anonymous said...

Agree with 76 degrees, for anon #2.
When I was a college student we had a "Jan plan" (individual projects for month of January), and I arranged to follow around a hospital administrator for the month. It gives you a feel for whether you like the environment and for some of the issues that arise.
I would guess that most physician administrators started out to be physicians, and then discovered a flair for administration and/or got tired of practicing medicine. I would say that if your primary aim is not to practice medicine, then all the rigor and heartache of medical training would be overkill for training to be a hospital administrator. As 76 degrees notes - people skills, organizational skills and leadership skills seem to me to be more important.

nonlocal MD

Anonymous said...

Hi, enjoy our blog, I am a physician trained at Mayo and still have contacts there. I would like to point two things.
First these paragons of medical care (Mayo, Cleveland Clinic, Geisinger) were all started by physicians and are still physician run with MD CEOs.
Second the claim that employing salaried physicians makes them holier than others is a bit of a stretch. Their salaries are not fixed in stone and vary among doctors and from year to year based on their contributions to the company goals. One of these goals is financial success which then means the doctors do have an incentive to produce revenue pure and simple. You get what you incent for and without incentives you get little work from anybody.
Physicians are just as human as anyone else, not the sainted altruists everyone wants them to be.
Richard D. Sudmeier,MD

Anonymous said...

For Anon #2

I am a hospital CEO who is not an MD and has an MHA. My advice for someone who is interested in healthcare management is to pursue and MBA in terms of an educational degree. IMO the job requires systems thinking along with strong analytical, leadership and communication skills. You need to be able to quickly move from detail to "big picture" (like from one meeting to the next or even within a meeting)and also see the interelated nature of healthcare. Being able to "follow the money" is a key attribute to success in this business and is not as easy as it sounds. Finally, in healthcare you should always be the servant leader. I have seen too many hospital/healthcare CEOs who, over time, began to believe the success of the orgainzation was all due to them and they began to resent having to respond or report to the medical staff and board. Stay humble!

Anonymous said...

it seems to me there is a lot of blame directed at physicians (i am one). in my experience, physicians act as a check and balance system, protecting the patients from administrative cost cutting measures which may compromise care. i realize this may not always be true, but i think there will be some unfortunate changes in the way physicians are able to protest what they feel are unsafe decisions if they are employed by the hospital. instead of just being known as a troublemaker, they will be known as former employee.

"Anonymous #2" said...

Just wanted to thank everyone who provided advice on becoming a healthcare administrator.

Very late appreciation, but nonetheless grateful to those to provided advice.

Anonymous said...

Regarding Geisinger, asking self-serving questions invites self-serving answers. In any event, numbers contradict notions that Geisinger delivers quality care and at lower costs. Its wildly expensive expansion, its transformation from a caring, local hospital into a Big Business first and foremost, took its toll on locals for whom the hospital was founded.

Anonymous said...

I am a Physical Therapy Assistant (PTA) in PA. Geisinger appears to be taking over in our region of NEPA. Too bad their coverage stinks for people. As a PTA on home health, 1. I am not allowed to see some of their covered pts without special auth. Inturn, some patients end up NOT receiving PT due to coverage issues. The office you need to contact ONLY checks the fax 1x/day and if you send anything 1 min after, it doesn't get addressed until the following day. If it gets addressed then. I have had patients NOT be seen for over a WEEK because of this. Geisinger Gold was the insurance.
2. Geisinger pays the home health agency POORLY for PTAs to see their patients to the point where it is NOT worth the company's time to send a PTA to do a standard treatment.

I keep on hearing the comercial with Glenn Steele speaking so highly of Geisinger but to be honest, it makes me sick! If anyone from Geisinger would like to contact me, I can be reached at In the subject line put: Geisinger rep. I will be happy to speak to anyone about this issue.