Posts tagged ‘#healthcare reform’
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.
Market failure and rural health care
For decades, the theory of American health care reform has been to introduce market forces and make them effective enough to control pricing and utilization, ideally at rates no greater than general inflation. This has been true since before the failed Clinton era reform effort, and its core thesis of managed competition developed by Stanford economist Alain Einthoven.
But what happens in locales that are too sparsely populated to support at least two competitors for a given service? What if it can’t really support one competitor without outside subsidization? Much of Colorado’s geography fits this description. In the absence of market competition, what forces will match supply and demand?
The issue is more complicated than it seems. From a purely technical standpoint, one might advocate for the decommissioning of facilities in such areas. “Look, if the market can’t support them, then I certainly don’t want to use my tax dollars to do it,” some might say. “If people choose to live there, then they have to pay their own way. Many things are more expensive in rural areas, and health care is no exception.”
But health care services aren’t like others, in that people take “care” as a sign of “caring”. If we stand by while their hospital fails, some would interpret that as a sign of neglect at best, and hostility at worst. Recently in Boothbay Harbor, Maine, St. Andrew’s Hospital became St. Andrew’s HealthCenter, with no capacity to admit people overnight. Despite the economic realities, the hospital seeing few emergent patients, and losing money because of expensive but underutilized staff, local residents were appalled that there would be no local hospital beds.
Someone at a local Maine foundation explained this to me. She told me, “This isn’t just a matter of economics. Many have contributed to their local hospitals over the years. In some of our towns, it’s the largest remaining employer. People identify with their local hospital, and its loss is a blow to civic pride.”
What this tells me is a lesson I have learned over and over again: the hardest problems aren’t technical, they’re cultural. (This has to do with the American drive toward individual empowerment, but that’s a whole other post.) Assuring adequate service to rural communities in the information age can be achieved, more cheaply and in many cases with an improvement in patient experience outcomes. Sanjeev Arora in New Mexico is a pioneer in telemedicine through a program he started called Project Echo. He’s demonstrated outcomes in many specialties in rural areas of New Mexico that are as good as those he achieves in his own specialty clinics in Albuquerque. He does this by bringing nurse practitioners and other primary care providers on to his team remotely, through telemedicine. I think he’s demonstrating that a static body of knowledge isn’t the main determinant of good care; it’s local relationships and the ability to stay current in an area through ongoing discussion with a team focused on the same kind of patient. It tells me that the best repository of clinical knowledge isn’t single human brains last intensively programmed years ago, but a living human “cloud” intelligence supported by the actual computing cloud. Both should continually update themselves.
Important questions loom in Colorado and other states with rural regions: how do we maintain adequate services for sparsely populated areas, at a price that is sustainable? How do we need to start thinking about services differently in order to widen the possibilities to solve the set of equations that define this problem? How do we honor the contributions of those who built these rural facilities that were once relevant, even vital, but before travel and information transfer were so easily available? How do we keep up with residents’ expectations that rise as fast as those in urban areas, but whose infrastructure cannot?
Complexity theory says that for complex problems with multiple independent actors, it is impossible to master plan solutions. The independent actors respond unpredictably to attempts to change the system. What can be done, though, is to plan interventions, measure results, adjust the intervention, measure, adjust, measure, etc. Rural health care system redesign is likely one such complex problem. Solutions to such a problem may involve innovative systems like telemedicine, mobile apps, and the local Walgreens being the main health care facility in town. But as a cultural problem, surely anyone outside of communities suggesting any of these things for communities will fail. Complex solutions cannot emerge without the leadership of the people affected by the problem. The external pressures in communities are not under their control; their response to those pressures is.
Why medicine is changing
I just submitted this piece for the Colorado Medical Society magazine:
Dear Colorado Physician,
Hi. It’s Jay, the guy from down the hall. I am writing to you today to talk to you about how our world is changing, and why I think it is doing so.
First, none of this is going to make any sense until we face up to the fact that what we have viewed as “the normal course of business” in medicine is anything but normal. In the history of the world, never have so many spent so much of other people’s money with so little accountability for how it was spent. Never. It’s been the biggest bonanza of unsupervised money in the history of the planet. You and I, hospitals, drug companies, insurance companies, and many others have made incredible livings based on this lack of adult supervision of our spending patterns. While we like to excuse ourselves from that list, as Walt Kelly said in Pogo, “We have met the enemy, and they is us.” At least, partly us.
How did this happen? Well, remember that in 1950, the sum total of the data about our practice patterns could fit into a cocktail party conversation. With loud music on. In the absence of the ability to judge who was doing better and who was doing worse at our gig, society did a number of things to try to help itself sleep at night.
First, they invented the malpractice suit. By more or less randomly punishing anecdotally bad behavior, they sent the message, “We can’t tell if you’re doing a good job, but we’ll rely on your fear and guilt to regulate your behavior. Sorry to resort to that, but it’s the best we can do right now.” We learned to fear and loath trial attorneys.
To try to regulate our spending, the spending with no natural brake on it, they invented prospective review in insurance companies. This was to send the message, “We can’t tell if you’re doing a good job, but we’ll rely on you giving in to hassle factor for things you don’t really want all that much, to distinguish what’s medically necessary from what’s not. Sorry to resort to that, but it’s the best we can do right now.” We learned to fear and loath insurance companies.
To try to regulate our quality, the quality no one could define with any specificity, they created hospital peer review and credentialing. Good, we thought, because we control those, and so while we do punish egregious error, for the most part we go through the motions and excuse anything we can imagine having done ourselves on a bad day. We do no root cause analysis, no systems improvement, and we wait for the same thing to happen again. We shake our heads when it does, and wonder why so many of our peers are having bad days.
But in 2013, we are learning to tell who does a good job.
In 1965, Gordon Moore working at Fairchild Semiconductor, observed that the number of transistors on a chip was doubling every 18 months, and the cost was halving at the same time. This meant that computing power, and therefore information, was getting cheaper at an exponential rate. Today in 2013, Moore’s Law is still true, and information is cheaper than zero.
The cheapness of information fundamentally changes the properties of modern society. It means that everybody’s performance can be measured, including yours, with increasing precision and accuracy. It means data will be increasingly available to do systems analysis, and improve the safety, reliability, and efficacy of treatments and procedures. It means that very complicated things will be modeled predictively, including things that are way more complicated than a hip replacement. So the chances this computing power isn’t being applied to your performance as a doc? Zero. All the major health plans have already invested a lot of money to do exactly that.
So we have a couple of options here. We could try to ignore this trend, and hope everyone who pays for our stuff will, too. We can spend our time and effort trying to discredit the data that’s being used, even though similar techniques are being used to send coupons to women who are pregnant before they’ve told anyone, through their buying patterns. Big Data is here, and it cannot be lobbied or wished away.
Or, we can use the information that health plans and others can provide to get better, and to accelerate our quest for error-free, high value care. We can humbly accept that the smartest doc alone has no chance to do her best work without the data and analysis enabled by Moore’s Law. And we can begin to use these data to get better at what we do at a rate unimaginable in the days before powerful computing.
I’m not here to make that choice for you, even if that were possible. I’m here to tell you that whether you voted for this or not, it’s where we are. The profession will never be the same, and like all loss, that is sad. But we should recognize that the old system and its imperfect quid pro quo were driven by society’s inability to judge what it was buying from us; its need to feel safe through fear and guilt-based mechanisms; and comforting delusions about our infallibility that we secretly wanted to believe ourselves. Today in 2013, I am confident that none of those things produced what is best for us, our patients, and our society at large.
What will you choose? You won’t have to tell anyone. They’ll know from the data.
Warren Buffett, ketchup, airlines, and health care consolidation
Berkshire Hathaway is acquiring Heinz. US Air is merging with American Airlines. Anthem is hiring a hospital system veteran to become its next CEO. What do the first two have to do with the last? How are mergers and acquisitions in other industries related to those in health care?
What the press is saying is that the first two acquisitions have come now because some stability has been restored to the markets, and people feel freer to put capital on the sidelines to work. Throughout the Great Recession, companies have been stockpiling cash because it increased their flexibility and therefore survivability in an uncertain environment. The public did the same, paying down debt, holding cash, getting out of stocks and bonds and into safer investments like money markets. Now, with volatility down, some sense that Europe will not go to hell in a handcart in the short run, companies are buying future capacity.
But why do companies merge in the first place? There are good reasons not to: the clash of cultures in the airline mergers is legendary, and some mergers fail because of that. Companies merge because they cannot compete at the level at which they are currently organized. American Airlines is a good case in point, where even at their size, they are still in receivership in the tough competitive environment that is the airline industry. They needed economies of scale, and synergies in their route structure to hit the price points of their competitors.
The airline merger is an example of horizontal integration, the merger of companies in the same business. But increasingly in health care, we are watching vertical integration, the merger of companies in related businesses, but who do not do exactly the same thing. Hospitals are acquiring physician practices at an increasing rate. They are also entering related businesses. There was a recent announcement here in Denver that the University Hospital system is contemplating building its own health plan. Rumor is other systems are thinking the same thing. Now running hospitals is hard enough, as anyone who has tried can tell you. Why would they want to acquire practices and health plans?
I think it’s because of the same reasons other companies in other industries do: because they can’t compete at the level of their current organization. If your competitor has an integrated enterprise of hospitals, docs, and health plan functions, you might need the same in order to compete in the marketplace, say, a health benefit exchange.
This brings me back the beginning of this post, and Joe Swedish taking the wheel at Anthem. Mr. Swedish is a long-time hospital executive; but Anthem may have recognized that its future disproportionately depends on the integration and efficiency of its provider networks. And Joe Swedish knows all about those.
Now that everyone is feeling safer, the cash that has been stockpiled in health care companies will likely be mobilized in the same way it is in other industries. I will be watching for more integration of assets, both vertically and horizontally.
Disaster and disease vs. social cohesion
What do death rates during a summer heat wave in Chicago have to do with health care reform?
In the January 7 issue of the New Yorker, Eric Klinenberg has a fascinating article about the resilience of communities to disaster. This was especially timely in the wake of Hurricane Sandy, and in fact part of his article visits people trying to recover from its damage on Long Island. Dr. Klinenberg has been studying community responses to disaster for a couple of decades, most notably the heat wave during the summer of 1995 in Chicago. During that disaster, 739 people died. Analysis of the patterns by neighborhood found things you might expect. The poor died disproportionately to the better off. But there were some poor neighborhoods that had death rates that were lower than in the more affluent neighborhoods on Chicago’s North Side. Two neighborhoods on the poor and predominantly African-American South Side had mortality rates an order of magnitude different from each other. What does he make of this latter finding?
In response to disaster, communities have at least two categories of response: physical infrastructure and social infrastructure, he explains. Many communities around the world have gotten good at dealing with the kind of flooding we saw from storm surge during Sandy. They have installed dikes and seawalls, waterproofed utility lines, etc. A mass effort to install air conditioning in every apartment in Chicago would have been such a response. (Having air conditioning apparently reduced one’s odds of dying by 80%.)
Instead because Chicago now knows about neighborhood specific mortalities under these conditions, in hot periods they escalate welfare checks to the people they know are vulnerable there. Klinenberg thinks these high mortality rates are reflective of low social cohesion, and that the low mortality neighborhoods (the ones that don’t differ much in geography, income, or race from the higher mortality ones) have high social cohesion. There, people know who their vulnerable neighbors are on their block, and in their apartment building. They know this because they have lived there for years, and know when their neighbors usually shop for groceries, or visit the hair salon. The differences are not related to physical infrastructure; they are related to social infrastructure.
Put simply, lack of social cohesion kills.
So what if disaster response (or lack thereof) isn’t the only way poor social cohesion kills? What if the same factors also predict medical mortality? Re-admission rates to the hospital? Medication adherence?
What if building more hospitals, ambulances, and emergency rooms amounts to a physical infrastructure response to problems that are much more amenable to social infrastructure improvement? As hospital beds continue to proliferate while demand is falling, are we just building more seawalls behind seawalls because we only know how to finance building seawalls, and have no clue how to finance building sustainable neighborhood associations?
These questions I believe will become more and more prominent in our dialogue on progressing our American system for health optimization. The health care delivery system seems to be mostly a physical infrastructure solution, and an unsustainably expensive one. Developing a health optimization system seems to me to lead inevitably to a social infrastructure development system. No matter how good they are, it seems unlikely that professional repairmen will ever substitute for a neighbor knowing the signs you’re not well, and being willing to do something about it.
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