Archive for January, 2015

The Institute for Healthcare Quality, Safety, and Efficiency at the University of Colorado Hospitals

I recently attended a graduation of sorts, from something called the Institute for Healthcare Quality, Safety, and Efficiency at the University of Colorado Hospitals. What I saw was dozens of people organized into several teams. Each team was from a different hospital unit, and each team had a project to improve quality, safety, and efficiency for its respective unit. They had used Lean and other methodologies to identify root causes, implement changes, and measuring the effect of those changes. If you’re from another industry, none of this sounds at all unusual. If you are from health care, you recognize that this is terribly unusual. In fact, this was only the second graduating class for the Institute.
Such training is old hat in many other industries, especially manufacturing. A friend who runs a health care systems engineering school tells me that one of the reasons he’d shifted into health care is that traditional industry is saturated with process improvement engineers, and there are no new opportunities for his graduates there. However, the use of industrial engineering methods in health care is relatively recent, particularly on the scale to which IHQSE aspires for its institution.
There are many possible reasons for this slow adoption, but some would argue that one of them is that process improvement hasn’t been profitable in health care under current payment systems. It simply doesn’t fit with the business model. If one is paid for activity, reducing activity through improved efficiency reduces revenue. So why would a very successful business like UCH engage in revenue reduction on any significant scale?
It’s a critically important question. A basic tenet of Clayton Christiansen’s work at Harvard Business School is that only rarely do institutions that succeed under one business model participate in the development of the one that disrupts and replaces that model. The temptation to resist change and perpetuate the last successful revenue model is just too great in most instances. And yet, that’s essentially what a hospital accustomed to being paid fee for service does when it engages in process improvement.
Likely several things are going on. It’s hard to argue with reducing harm the system does to patients. But that’s always been true, and it doesn’t explain why we did so little before, and why programs like IHQSE are now proliferating around the country. The number of financial penalties for system failures is also increasing steadily, like nonpayment for readmissions and obvious errors, like wrong side surgery (e.g., operating on the left leg when it’s the right that needs fixing).
But I hope a larger shift in thinking is happening, and that it’s good for the system and its patients. I think it may finally becoming orthodoxy in American health care that the seemingly endless stream of dollars that financed its expansion over the past couple of decades, is coming to an end. In a restricted top line growth environment, profitability increasingly depends on efficiency. And so I hope what we are watching is health care adapting to an emerging environment where efficiency and efficacy isn’t just the right moral thing to do for patients, it’s the best business model. Payers and purchasers are starting to change from paying for activity to paying for outcomes at a set price and a set quality standard. In that environment, it makes all kinds of business sense to do things effectively and efficiently, because it reduces waste, waste that the seller of the service pays for, not the buyer.
I dearly hope this is true. One of the nice things about this shift, even though it puts financial pressure on providers, is that it creates a financial benefit by improving care for patients. Suddenly making care safer, more satisfying for patients, and less expensive is good business. It was very heartening to see how proud the teams were of making their care safer, better, and more efficient. They were truly excited that they could improve the way they do things, and not simply accept that some error, even some harm, was an acceptable standard. To put it more simply, it seems to feel good to do better for the people they are entrusted to serve and the institution for whom they work, simultaneously.


January 14, 2015 at 3:50 PM Leave a comment

Lessons from Aligning Forces for Quality: Five Emerging Trends

I recently attended one of the last meetings of the Aligning Forces for Quality (AF4Q) communities, sixteen communities around the country that have been doing payment and delivery system reform for almost a decade, sponsored by the Robert Wood Johnson Foundation. I’m sure when the whole program wraps up next April, there will be a formal report on the findings and learnings. For now, here‘s a sampling of what I’ve learned.
• Payment reform is hard, and is greatly propelled by a dominant entity demanding change. When I worked in Albuquerque, reform efforts really took off when New Mexico Medicaid included participation in a payment reform pilot as a requirement for health plans doing business with them. In Michigan, Blue Cross Blue Shield of Michigan reorganized their delivery system into a series of Physician Organizations that are tasked with improving quality and controlling cost. In Cincinnati the ongoing scrutiny of large employers drives their provider community to compete on cost and quality. The theme is that both health plans and providers pay attention when a large source of their revenue demands that they do business differently.
• Providers do best when the incentives are harmonized between payers. Over and over again we heard from providers that paying attention to multiple bonus schemes and/or quality metrics from different payment sources is very difficult. If we can harmonize these incentives, there is a greater chance we can drive change at the practice level. The current Comprehensive Primary Care Initiative (CPCI) is a product of this thinking, testing whether having the same metrics and incentives across public and private payers results in greater practice level change. The whole idea is to increase the signal to noise ratio.
• Meaningful consumer engagement remains elusive. We continue to struggle with what reporting and metrics will be meaningful enough for consumers to use to choose providers and plans. Are we simply producing measures that are relevant to policy wonks but not average people? Or are the things that average people care about so diverse that we can’t create standards across the board? Is it just that most of us use the product very occasionally, and therefore don’t have an opinion until we are embroiled in a major illness or injury? These questions remain unanswered.
• Data can be very powerful, but it takes substantial work to make it relevant and useful. A number of AF4Q communities now have access to All Payer Claims Databases (APCDs), and even with that advantage, it takes a long time to get meaningful reports out of them. Fundamentally claims were intended for one purpose: to notify a payer that services have been rendered and payment was due. But pragmatically it is often still the most accessible evidence of a clinical encounter, and so we are using these data for lots of purposes for which they were never intended. This creates problems with attribution, episode definition, analysis and interpretation of the data.
• Despite the above, almost all of the hardest challenges in payment and delivery system reform are cultural and social, not technical. As much as data analysis is still in the working-out-the-bugs phase, all of it is technically possible now. The remaining barriers are very frequently political and cultural. Some entities feel these data are key to their business advantage, and are loathe to share with others, even those who consume and pay for the services in question. There is a growing awareness that such a stance is indefensible; after all, who has a greater right to the data than those who pay for the services and those who receive them? It further takes a concerted effort by those who pay and those who use to get access to what they should have anyway. Much of the push for this access is from organizations like the AF4Q communities, entities called Regional Healthcare Improvement Collaboratives (RHICs).
Has a decade of effort to reform payment and delivery been worth it? Undoubtedly there are those who wish for more progress than has been made. I am surely one of those. But nevertheless I think it has been a success—not because all the problems have been solved, but because of the kinds of problems we are working on now vs. ten years ago. Ten years ago, almost no one had an APCD. Ten years ago, no one could conceive of how bundled payments would actually work. And ten years ago, we couldn’t even hear the voices crying for true patient partnerships, not token engagement. There is plenty left to do; for a moment, though, we should pause to celebrate what we’ve done, and how much closer we are to the system we want.

January 7, 2015 at 10:34 AM Leave a comment


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