Friday, December 09, 2011

This is what dominance looks like

Sometimes, as they say, a picture is worth a thousand words.  This is a chart from a recent investor presentation showing the market share of the dominant provider group in Massachusetts. 

As I have said before, this represents excellent execution of a business strategy formulated in the mid-90s, when this system was founded by a corporate affiliation of Brigham and Women's Hospital and MGH.  It has resulted in a behemoth, and the state's largest insurer has said publicly that it does not have the ability to withstand the resultant market power -- and acts that way, too.

The chart shows only tertiary discharges, reflecting the 4,000 licensed beds and 6,560 physicians in this system, with operating revenues of $8.5 billion in fiscal year 2011.  So, when you read a story about this system being vulnerable to the poaching of a 90-doctor group by a cash-laden private equity firm, you really have to wonder.  Especially when the story notes:  "Compass doctors send many of their patients to the Brigham for advanced care, and doctors intend to continue that relationship."

How convenient, though, for the dominant player when such an event happens.  It can spin the story and assert that this shows how market forces are at work.

In other regions characterized by similar market dominance (e.g., Utah with Intermountain Health; parts of Wisconsin with Gundersen Lutheran, parts of Pennsylvania with Geisinger), the local provider systems have demonstrated an agenda of controlling the growth of health care costs by focusing on improving quality and safety and process improvement.  This Massachusetts system could have and still could exercise similar leadership, but not if it continues to execute the old growth model.


Anonymous said...

Given (1) well-documented (and under-reported) rates of patient harm in tertiary hospitals (even among the few with highly transparent and aggressive patient safety efforts - which do not exist in Boston, by the way) (e.g. Landrigan et al., N Engl J Med 2010; 363:2124-2134), and (2) successfully deployed tools for internal discovery of adverse events (e.g. IHI Global Triggers Tool) - what is the estimated number of patients harmed in this graph? How many preventable deaths occurred in Boston in 2010 because we do not hold this industry accountable?

e-Patient Dave said...

I wanna see an Edward-Tufte-style multi-variate graphic here - not just the height of the bar for market share, but let's add in the quality data and the prices they charge.

btw, I for one would be empowered by (and thus wouldn't mind) if you started using the names. Blue Cross, instead of "the state's largest insurer."

Heck, I'd like to know the name of the executive in charge of those pricing decisions, and what kind of car s/he drives, while the rest of us hear that Occupy Boston should get out of the streets and stop causing trouble.

Medstudent2014 said...

I'd really like to hear your opinions on the Kasier Permanente model, and how it compares and contrasts (in terms of cost, quality) with some of the other touted systems (Mayo, Geisinger, Intermountain) and top hospitals (e.g. BIDMC) out there.

Kaiser really did well on the new Leapfrog list:

Why does KP not seem to have the same visibility at the national level, as a potential model to replicate?

Thanks a lot,
-an interested med student

Paul Levy said...

Others may know better and may want to comment. I hear excellent things about KP's commitment to quality and safety, on the one hand, and a somewhat rigid process for how the company manages care within its system on the other. I have heard, too, that both it and Mayo have had problems replicating their success outside of their home territory. Does anybody want to pitch in?

Anonymous said...

Where is the medical school to provide them with appropriately skilled labor? The first Mayo Clinic grew more slowly than others. There was personal contact with the philosophy of leadership, day-to-day sculpting of a culture of quality, growth led by learning rather than the capital campaigns and NIH funding that followed.

How many quality and safety leaders does Harvard Medical School produce? We might be hard pressed to fill a lecture hall, let alone a hospital.

Anonymous said...

My personal experience with Kaiser is over 10 years old and on the east coast, but I believe Paul has characterized it well. During the time I dealt with them as a non-affiliated hospital-based physician, they struggled with continuity of care due to their staff model, although much of medicine has since moved in the same direction. A more recent vignette described below is disturbing - although not named in this post, the organization cited was confirmed to be Kaiser. I believe it illustrates their struggle with the rigidity Paul describes:

Not to say that the other organizations cited do not also have the same anecdotal experiences.

nonlocal MD

Anonymous said...

It would be interesting to see these numbers compared to several denominators - Academic medical center beds, total beds, total number of physicians / primary care physicians to see if the numbers are disproportionately high for any system or hospital.