tag:blogger.com,1999:blog-32053362.post1418377088290780177..comments2024-03-26T00:25:34.026-04:00Comments on Not Running a Hospital: Share the savingsPaul Levyhttp://www.blogger.com/profile/17065446378970179507noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-32053362.post-70238490638392145172008-10-25T15:03:00.000-04:002008-10-25T15:03:00.000-04:00Ever since training in Six Sigma and Lean Kaizen, ...Ever since training in Six Sigma and Lean Kaizen, I've tried to make standardization my mantra. I've been impressed, however, at how variations in patient expectations profoundly influence provider behavior. We shouldn't be surprised- eating patturns, exercise habits, demand for consumer goods and political views all vary among people, even across regions, so why wouldn't demand for health care vary similarly? Because response to illness is influenced by cultural factors, a component of the variation and many of the "medical myths" represent physicians and patients dancing to the same beat. People are unlikely to accept changes that push up against their expectations.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-32053362.post-32234775083987624152008-10-24T10:47:00.000-04:002008-10-24T10:47:00.000-04:00Oh wait, actually this is his post, which he sent ...Oh wait, actually this is his post, which he sent me by email because the other one didn't get through.<BR/>Paul<BR/><BR/>Our current thinking -- and the current approach of the Medicare demonstration project -- is to use a target that does not penalize groups for exceeding it. There are several reasons to favor this approach. First, because there is no lock-in of patients, or even an incentive for them to remain within the network, the physicians within the group have little control over where they seek care (although the evidence suggests that most care is provided "within" the group). Second, physician groups or physician-hospital networks are not widely prepared to manage risk, which a firm target would require. We believe that a soft-target, voluntary approach is more likely to attract broad participation by physicians. <BR/><BR/>There are likely to be several keys to success: having all payers involved so that the provider organization has a strong incentive to actually save (rather than reducing utilization in the patients under shared savings while increasing utilization in others!); a multiyear commitment that encourages strategic moves (converting acute care beds to nursing beds and allowing a few high-cost physicians to retire without being replaced); and, perhaps, linking the shared savings program to other innovations -- the medical home model, for example. <BR/><BR/>But we have lots to learn about how best to do this. Experimentation and evaluation will be important. <BR/>Elliott FisherAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-32053362.post-67712155243184839402008-10-24T10:41:00.000-04:002008-10-24T10:41:00.000-04:00The above comment was from Elliott. The comment b...The above comment was from Elliott. The comment box closed before he could type his name!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-32053362.post-73372811117491511072008-10-24T07:55:00.000-04:002008-10-24T07:55:00.000-04:00The shared savings models currently in place do no...The shared savings models currently in place do not have a penalty for exceeding the target. There are two primary reasons for this "soft" approach. First, because patients are not required to lock-in to their primary provider (nor are they penalized by higher co-pays from seeking care outside the network), providers have limited tools to control out-of-system use. Second, a firm target or budget would require providers to take on financial risk. <BR/><BR/>We hope that a voluntary approach will encourage broader participation by providers. And because there is so much opportunity for savings we should be able to truly bend the curve. All that's needed is to close a few hospital beds!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-32053362.post-68679703709064153992008-10-24T06:00:00.000-04:002008-10-24T06:00:00.000-04:00I'll ask him to reply directly, as I do not recall...I'll ask him to reply directly, as I do not recall if he addressed that during his talk.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-32053362.post-37385387480853285492008-10-24T05:21:00.000-04:002008-10-24T05:21:00.000-04:00Thanks for the summary of the MMS meeting, Paul. ...Thanks for the summary of the MMS meeting, Paul. I like Fisher's idea of sharing savings if the growth of spending is below a target. But what does he think we should do if the actual growth rate in spending is greater than the target--just sigh or actually do something like cutting fees?Anonymousnoreply@blogger.com