The most commonly heard comment in healthcare these days is that we have to move from paying for volume to paying for value. While it may sound trite, it also turns out to be pretty true. Right now, most healthcare services are paid for on a fee-for-service basis – with little regard for the quality of that service. We clearly need to move towards value-based payments (sometimes referred to as pay-for-performance or P4P).
Although a few folks remain skeptical about whether VBP/P4P can work (as though our pay for volume strategy is working out so well), asking whether we should pay for volume versus pay for quality no longer seems like a particularly interesting question.
The far more compelling and difficult question is how best to pay-for-performance? As I have written before, we need bold experiments with new payment models that employ three key principles: putting real money on the table, focusing on outcomes, and keeping the reward system simple (i.e. the better you do, the more you should get).
One such new payment model is the value-based purchasing (VBP) program from CMS, the largest payer of hospital care in America. It’s a modest program but an immensely important one. It is modeled after the Premier Hospital Quality Incentives Demonstration (HQID), which ran for 6 years and had modest effects on hospital performance on process measures and no effect on patient outcomes.
Despite these disappointing findings, the U.S. Congress, in crafting the Affordable Care Act, modeled VBP closely on HQID. The incentives in the program are small (currently at 1.25% of total Medicare payments) and still more heavily weighted towards process measures than outcomes.
The key question for VBP is whether it will work – whether patients will be better off because of it. We don’t know and realistically, we won’t for another year or so.
But what we do know is that two years into the program, certain hospitals seem to be doing well and others, not so much. Yes, the incentives are small and my guess is that any impact will be very modest as well. But, it’s still worth taking a look at how different types of hospitals are faring under VBP.
So we ran some numbers.
Continue reading “Finding the Value in Value-Based Purchasing”
Filed Under: Hospitals, THCB
Tagged: Ashish Jha, Costs, Hospitals, Pay for Performance, Value-based Purchasing
Nov 20, 2013
Recently I was asked to intervene on behalf of a patient who, trapped by circumstance, was paying off an enormous bill for a lithotripsy procedure. What I uncovered wasn’t news, but it drove home how egregious the current system can be, why it so badly needs to be fixed, and how the Affordable Care Act (ACA) helps move us in the right direction.
The patient had health insurance through her husband’s job. But it was cancelled just after the hospital validated it, because the employer failed to pay the premium. The procedure was performed, and the patient was charged as “self-pay.”
If Medicare had been the payor in this case, the hospital’s total reimbursement would have been a little less than $2,000. But the lithotripsy and associated costs were billed at $33,160, or just under 17 times the Medicare rate. After the patient applied for financial assistance, a 30% contractual adjustment was applied, reducing her bill to just under 12 times the Medicare rate.
If the health system had asked her to pay 190 percent of Medicare – typically the upper end of commercial insurance rates – her bill would have been about $3,800. By the time I was contacted, the patient and her husband – responsible people trying to make good on their debt – had already paid the health system $5,700 or 285 percent of Medicare. The hospital insisted they owed an additional $16,000.
I laid this out in a letter to the CEO and, probably because he wanted to avoid a detailed description of this unpleasantness in the local paper, he relented, zeroing out the patient’s balance. No hospital executive wants to be publicly profiled as a financial predator.
But while that resolved that patient’s problem, it did nothing to change the broader practice. Most US health systems, both for-profit and not-for-profit, exploit self-pay patients in this way. Worse, not-for-profit health systems legally pillage their communities’ most financially vulnerable patients while getting millions of dollars in tax breaks each year for providing charity care.
Aggressive collections procedures, including home liens, are widespread.
Some states have strictly limited what hospitals can charge low income patients. In California, uninsured patients with incomes below 350 percent of the federal poverty level (FPL) – $82,425 in 2013 for a family of 4 – can be charged no more than Medicare rates. In New Jersey, patients within 500 percent of the FPL cannot be charged more than 115 percent of Medicare.
Section 9007 of the ACA took effect last year and prohibits excessive pricing for self-pay patients, and would revoke a charitable hospital’s tax-exempt status if it charges them more than it charges for insured patients. The language is ambiguous, conceivably allowing health systems to circumvent the law’s intent. But the spirit is clear. To keep their not-for-profit tax status and perks, health systems must stop taking advantage of self-pay patients.
Continue reading “And Yes, The Affordable Care Act Really Does Make Care More Affordable. Here’s One Example ….”
Filed Under: Hospitals, THCB, The Business of Health Care
Tagged: Brian Klepper, Costs, Hospitals, Medicare, Patients, Premiums, self-pay patients, The Affordable Care Act
Nov 18, 2013
In my previous blog, I made the argument that whatever strategy we use to improve care in hospitals will not be implemented and executed well without proper focus by hospital leadership. So, it is in this context, that we recently published some pretty disappointing findings that are worth reflecting on.
We examined the pay of CEOs across U.S. hospitals and found that some CEOs got paid a lot more than others. This was not surprising. CEOs of larger, urban, teaching hospitals get paid a lot more than CEOs of small, rural, non-teaching institutions. But the disappointment was around quality: we found no relationship between a hospital’s quality performance and the pay of the CEO. Holding size, teaching, and other factors constant, what was the pay of CEOs of hospitals with high mortality rates?
About the same as CEOs of hospitals with low mortality rates. What about other quality measures? Most of them didn’t really seem to matter, with the exception of patient experience, which correlated nicely with CEO compensation. It seems that when setting CEO compensation, patient outcomes are not a big part of the discussion. How could this be, and why does it matter?
How you set incentives for senior managers says a lot about your priorities. Boards generally set the salary for their CEOs and they clearly reward patient satisfaction scores. That’s good. They also seem to reward the things that build hospital reputations: having the latest technology such as a PET scanner or academic status. But are boards rewarding CEOs based on mortality rates or adherence to basic quality metrics? Not so much. Why not? I’ve spoken to a lot of board chairpersons over the years and the answer is not that they don’t care. Most boards want to reward quality and believe that they do.
The problem is that most board members lack sufficient expertise on quality metrics and can’t decipher, from the large number of quality metrics, which ones are important (like mortality rates) and which ones are not. Hamstrung, they focus on satisfaction but also end up rewarding things that feel like proxies for quality, such as having the latest technology. And here’s the part that’s frustrating – our national efforts on quality measurement and improvement are not helping. We seem to have done very little to prioritize what’s really important, and shine a light on them.
So what do we do to move forward? Some states have started requiring that boards undergo training in quality. Medicare, as a condition of participation, could certainly require that boards (or at least some members thereof) show a degree of expertise with quality. I like these ideas but worry that training programs would themselves be of variable quality, and for some boards it would become an onerous requirement without achieving real gains in expertise.
Of course, if we really want to help boards be more effective and engage healthcare leaders, the biggest thing that we could do is actually reward hospitals, in a meaningful way, based on quality. Yes, we have the value-based purchasing program, and it is well-intentioned. But, as I’ve written before, it has several big problems. First and foremost: the incentives are very weak and there is little reason to believe it will have a meaningful impact on patient outcomes. Second, the measures are diffuse – we have too many of them, some of which matter (mortality) and many which don’t in the absence of the appropriate clinical context (checking the ejection fraction on a heart failure patient). It’s hard for hospital boards to really get a clear signal on what matters if they aren’t seeing it clearly and consistently from national leaders on quality.
Continue reading “Hospital Exec Pay: If P4P is Good Enough for Doctors, Why Not the CEO?”
Filed Under: Hospitals, THCB
Tagged: Ashish Jha, Hospitals, Quality
Nov 8, 2013
I was recently chastised by a colleague for being too negative in one of my pieces on hospital care. His is a remarkable story of what happens when things go well, and it has made me think a lot about why, in some places, things seem to work while in others, not so much.
He told me how a few months ago, soon after returning to Boston from a trip to China, he had started feeling short of breath. When his cardiologist convinced him to be evaluated, he found himself at the Beth Israel Deaconess Medical Center (BIDMC), arriving in the ER late one evening. He was triaged within minutes, had an EKG within 15 minutes, at which time comparisons were made to previous EKGs. After ruling out a heart attack, his ER physicians quickly ordered a CT Angiogram.
That test, completed within an hour of his initial arrival to the ER, revealed the reason for his shortness of breath: he had a large saddle pulmonary embolus. He was started immediately on IV heparin and sent quickly to the ICU, experiencing essentially no delay in care. He spent three days there and reports receiving care that was attentive, expert, and consistently of the highest quality. Even after discharge, he received two nursing visits at home to ensure he was doing OK. In discussing his experience, he repeatedly emphasized the fantastic communication and teamwork that he witnessed. Weeks after discharge, he continues to get better and feels the benefits of the excellent care he received.
This is the story we all hope for. And when I heard it, I have to say that I wasn’t surprised. There’s something about the BIDMC that’s unusual. Of the 4,500 hospitals that report their mortality rates to Medicare’s Hospital Compare website, only 22 (less than 0.5%) have better than predicted mortality rates for all three reported conditions: heart attack, congestive heart failure, and pneumonia. And, we know that the combined performance on these three conditions is remarkably good at predicting hospital-wide outcomes, including outcomes for pulmonary embolism.
If you are a patient and care deeply about good outcomes, BIDMC seems to be a good place for you.
So what’s so special about them? What do they do that’s different? I don’t know, specifically, all of their tactics, but I have some guesses about what seems to differentiate high performing institutions from the rest. And in a word, it’s leadership. BIDMC has had two CEOs over the past few years, and both of them have been unusually committed to achieving high quality care. That commitment translates into real activities that make a big difference. Let me divert us with a story of what this might actually mean.
A few years ago, I was working on a strategy for improving the quality and safety of VA healthcare. As part of this effort, I called up senior quality leaders of major healthcare organizations across the nation. One call is particularly memorable. Because I promised anonymity, I will not name names but this clinical leader was very clear about his responsibility: every month, he met with his CEO, who began the meetings with three simple questions: “How many patients did we hurt last month? How many patients did we fail to help? And did we do better than the month before?”
The CEO and the entire hospital took responsibility for every preventable injury and death that occurred and the culture of the place was focused on one thing: getting better. When I looked them up on Hospital Compare, they too had excellent outcomes and they regularly get “A” ratings for patient safety from the Leapfrog Group.
Continue reading “How Many Patients Did We Hurt Last Month? Learning (But Not Too Much) From The Best Hospitals”
Filed Under: Hospitals, Tech, THCB
Tagged: Ashish Jha, BIDMC, Hospital Compare, Quality, VA Health System
Nov 6, 2013
Let’s say a physician writes a prescription for Colchicine and accidentally orders “10.0 mg,” when he should have ordered “1.0 mg.” That’s a tiny decimal error, a mistake even the best doctor could make. But it can be catastrophic for the patient. The higher dose could cause Colchicine poisoning, similar to arsenic poisoning: burning in the mouth and throat, excruciating abdominal pain. Internal organs would melt away and death would likely occur within 24 to 72 hours.
The ease with which even the best doctors can make gruesome errors is why hospitals set up elaborate systems to check and double check orders before drugs are given to patients. Some hospitals are better at this checking than others. Medication errors happen all the time, an estimated one million each year, contributing to 7,000 deaths. On average there is one medication error every day for every inpatient. Let’s take a closer look at what’s contributing to these preventable errors.
Hospitals Are In The Technological Dark Ages
According to recent research, the best known way for hospitals to protect patients from errors is by adopting technology called computerized physician order entry (CPOE). The physician (or other authorized prescriber) enters orders for a patient on a computer that contains patient information such as key lab values, clinical condition, allergies, etc. The computer checks the safety and appropriateness of the order and sends it electronically to the pharmacy. In the Colchicine example, a good CPOE system would alert the physician to the misplaced decimal in the order, and the best systems would prevent the order from being written in the first place. In my mind, one of the greatest advances of CPOE is that it eliminates the need for pharmacists to decipher physician handwriting. I’ve often wondered how they do that.
The research suggests errors decline by as much as 85 percent when hospitals implement CPOE, yet the pace of adoption in the hospital industry is agonizingly slow. To jump start progress, the federal government used economic stimulus funds starting back in 2009 to incentivize hospital investment in CPOE and electronic medical records (EMRs). That improved the pace of change, but still, most hospitals are in the Dark Ages when compared to other industries like airlines or retail.
My nonprofit, Leapfrog, finds that only about a third of the hospitals that voluntarily report to our survey meet our standard for full implementation of CPOE. Even for that minority of hospitals that adopt CPOE, the system doesn’t always work as advertised. Like all technology, CPOE must be continually tested and modified. That’s not always happening.
Continue reading “The Shocking Truth About Medication Errors”
Filed Under: Hospitals, THCB
Tagged: Leah Binder, Medication errors, Patient Safety, prescription drugs, The Leapfrog Group
Sep 9, 2013
Where health care has fallen short in significantly improving quality, our peers in other high-risk industries have thrived. Perhaps we can adapt and learn from their lessons.
For example, health care can learn much from the nuclear power industry, which has markedly improved its safety track record over the last two decades since peer-review programs were implemented. Created in the wake of two nuclear crises, these programs may provide a powerful model for health care organizations.
Following the famous Three Mile Island accident, a partial nuclear meltdown near Harrisburg, Pennsylvania in spring 1979, the Institute of Nuclear Power Operators (INPO) was formed by the CEOs of the nuclear companies. That organization established a peer-to-peer assessment program to share best practices, safety hazards, problems and actions that improved safety and operational performance. In the U.S., no nuclear accidents have occurred since then.
A more devastating nuclear incident in Chernobyl, Ukraine in 1986 spurred the creation of the World Association of Nuclear Operators (WANO), which serves a similar purpose but on an international scale. Since WANO’s inception, no severe nuclear accidents had occurred until the nuclear accident in Fukushima, Japan, caused by a devastating earthquake and tsunami in March 2011.
These programs have succeeded because their purpose and approach is very different from review processes by regulatory agencies. Instead of a punitive process that monitors compliance with minimum standards, peer-to-peer evaluations are thorough, confidential and—importantly—voluntary. They are viewed as mutually beneficial and help advance industry best practices, which are shared widely. The goal is to learn and improve rather than judge and shame. The reviews are done by experts, using validated tools and are ruthlessly transparent yet confidential.
Peer-to-peer review has not been widely used in health care. A couple notable exceptions are the Northern New England Cardiovascular Study, which used organizational peer-to-peer review to improve the care of cardiac surgery patients, and the National Health Service in the UK, which used it to improve the care of patients with lung disease. While provider-level reviews are more common in health care organizations, they fail to capture the scale needed to achieve system-wide improvements.
At the Armstrong Institute, we have been pilot testing peer-to-peer review and early results are encouraging. We have evaluated specific outcomes, like blood stream infections; specific areas, like the operating room; and whole quality and safety programs.
Continue reading “A Powerful Idea From the Nuclear Industry”
Filed Under: Hospitals, THCB
Tagged: Armstrong Institute for Patient Safety and Quality, Dan Hudson, Johns Hopkins, Patient Safety, peer-to-peer review, Peter Pronovost, Project EMERGE
Sep 4, 2013
Huge numbers of older persons transition from hospitals to the nursing home. Often, an older hospitalized patient needs skilled nursing care before they are ready to return home. In other cases, a nursing home patient who needed hospitalization is returning to the nursing home. Older patients and their families certainly hope that great communication between the hospital and nursing home would assure a seamless transition in care.
But a rather stunning study in the Journal of the American Geriatrics Society suggests the quality of communication between the hospital and the nursing home is horrendous. The study was led by researchers from the University of Wisconsin, including nurse researcher, Dr. Barbara King and Geriatrician Dr. Amy Kind.
The authors conducted interviews and focus groups with 27 front line nurses in skilled nursing facilities. These nurses noted that very difficult transitions were the norm. Sadly, when asked to give the details of a good transition, none of the nurses were able to think of an example.
Most of the nurses felt that they were left clueless about what happened to the their patient in the hospital. They lacked essential details about their patient’s clinical status. The problem was not the lack of paper work that accompanied the patient. In fact, nurses often received reams of paper work, often over 80 pages. The problem is that the paper work was generally full of meaningless gibberish such as surgical flow sheets that told little about what was actually going on.
Often the transfer information had errors, conflicted with what the facility was told before the transfer, and lacked accurate information about medications.
Continue reading “An “F” for Quality”
Filed Under: Hospitals, THCB
Tagged: elder care, Geriatrics, Hospitals, Journal of American Geriatrics Society, Ken Covinsky, Nurses, Nursing Homes, Outcomes, Quality, skilled nursing facilities
Aug 27, 2013
A few weeks ago, a middle-aged man decided to tweet about his mother’s illness from her bedside. The tweets went viral and became the subject of a national conversation. The man, of course, was NPR anchorman Scott Simon, and his reflections about his mother’s illness and ultimate death are poignant, insightful, and well worth your time.
Those same days, and unaware of Simon’s real-time reports, I also found myself caring for my hospitalized mother, and I made the same decision – to tweet from the bedside. (As with Simon’s mom, mine didn’t quite understand what Twitter is, but trusted her son that this was a good thing to do.) Being with my mother during a four-day inpatient stay offered a window into how things actually work at my own hospital, where I’ve practiced for three decades, and into the worlds of hospital care and patient safety, my professional passions. In this blog, I’ll take advantage of the absence of a 140-character limit to explore some of the lessons I learned.
First a little background. My mother is a delightful 77-year-old woman who lives with my 83-year-old father in Boca Raton, Florida. She has been generally healthy through her life. Two years ago, a lung nodule being followed on serial CT scans was diagnosed as cancer, and she underwent a right lower lobectomy, which left her mildly short of breath but with a reasonably good prognosis. In her left lower lung is another small nodule; it too is now is being followed with serial scans. While that remaining nodule may yet prove cancerous, it does not light up on PET scan nor has it grown in a year. So we’re continuing to track it, with crossed fingers.
Unfortunately, after a challenging recovery from her lung surgery, about a year ago Mom developed a small bowel obstruction (SBO). For those of you who aren’t clinical, this is one of life’s most painful events: the bowel, blocked, begins to swell as its contents back up, eventually leading to intractable nausea and vomiting, and excruciating pain. Bowel obstruction is rare in a “virgin” abdomen – the vast majority of cases result from scar tissue (“adhesions”) that formed after prior surgery. In my mother’s case, of course, we worried that the SBO was a result of metastatic lung cancer, but the investigation showed only scar tissue, probably from a hysterectomy done decades earlier.
Continue reading “#MomInHospital”
Filed Under: Hospitals, THCB
Tagged: Bob Wachter, End of Life Care, ER Visits, hospitalization, Hospitals, LEAN, Nurses, Patient Safety, Patients, Quality, Scott Simon, Social Media, Twitter, UCSF
Aug 17, 2013
The Bike Path:
On a warm and sunny August Sunday, I was rollerblading with my kids on the Shining Sea Bikeway. On mile nine on the trip, I hit a tree root, went flying, and landed on my shoulder. I could tell immediately that something was wrong — I couldn’t move my arm and was in the worst pain of my life. Feeling for my left shoulder, it was obvious that I had dislocated it. What happened next was that I received some of the best care of my life – unfortunately it was not from our healthcare system.
As I was lying on the bike path, nearly everyone stopped and asked how they could help. A pediatric nephrologist offered to pop my shoulder back into place. I declined. This wonderful couple on a two-person reclining bike stopped and insisted on pedaling me to the hospital. We were far from the road and knew that calling an ambulance was not straightforward. So I sat with my left arm dangling, in excruciating pain, while David rode the bike to Falmouth Hospital. It was a 20 minute ride finishing with a very steep hill. David apologized after each bump on the road as he heard me swear and wince.
The Emergency Room:
We finally made it to the ER, and, ironically, it was then that my care stopped being so wonderful.
It started off well enough – a triage nurse saw me walking in holding my arm, in distress. She got me a wheelchair and brought me into triage. I explained what happened, gave my name, date of birth and described the pain as the worst of my life. I was then shuttled to registration, where I was asked to repeat all the same information. It felt surreal: I had moved all of 10 feet and yet somehow my information hadn’t followed me. The registration person asked me question after question. Initially, the same ones: name, address, phone #, etc. Then, my Social Security number (presumably so they could go after me if I didn’t pay my bill), my primary care physician’s name, his address, his phone #, my insurance status, my insurance #, my insurance card, my emergency contact, their address and phone #, etc. etc. etc.
I told her I was in excruciating pain and needed help. A few more questions, she said. She needed the complete registration.
I was wheeled to radiology and sat in a hallway for what felt like forever, groaning in pain. I couldn’t find a comfortable position. Six or seven people walked by – and as they heard me groan, they would look down and walk faster. The x-ray technologist avoided eye contact. It was hard — I was right outside her room. Finally, I asked a passerby if she could help. Caught by surprise (I must have sounded human), she stopped. She looked at me. She then went into the x-ray suite. A few minutes later, a second technologist came out, saw my arm, and was the first to acknowledge that my arm looked painful. He told me the ER was pretty quiet and he would get me in right away.
Continue reading “Average Care at a Typical Hospital on an Ordinary Sunday in August”
Filed Under: Hospitals, OP-ED, THCB, The Insider's Guide To Health Care
Tagged: Ashish Jha, emergency care, Hospitals, Patients, Quality, Quality measurement, Wait times
Aug 14, 2013
One of US President Barack Obama’s key health advisers has just published a review in the aftermath of the Mid Staffordshire hospital scandal. Don Berwick’s review is both thoughtful and reflective but one of his key recommendations – to create criminal sanctions against health staff – will not make the NHS safer for patients.
Many patients, particularly elderly ones, suffered unnecessary indignities and avoidable harm at Mid Staffordshire.
The Francis report into the crisis concluded that patients were routinely neglected by a health trust more preoccupied with cutting costs and meeting targets rather than its responsibility to provide safe care. Patients’ calls for help to use the bathroom were ignored and some were left lying in soiled sheeting or sitting on commodes for hours. Events and failings there will probably go down in history as the blackest and bleakest moment for the NHS.
When the report was published in February, the government committed to appointing a advisory group of patients to consider the various accounts of what happened and the recommendations made by Robert Francis and others. The idea was that they would distill for the government and the NHS what lessons should be learned and what changes needed to be made.
Don Berwick, who worked on the long fought for Obamacare provisions in the US, is director and co-founder of the Institute for Healthcare Improvement in Boston. He was called in by the government to reflect on the Francis report and on patient safety.
Berwick’s review makes ten recommendations including that sufficient staff are available to meet the NHS’s needs now and in the future – staff should be well-supported and able to ensure safe care at all times; quality and safety sciences and practices should be a part of the initial preparation and lifelong education of all health care professionals, including managers and executives; and leaders should create and support learning and subsequently change, at scale, within the NHS.
But most controversial is his final recommendation:
We support responsive regulation of organizations, with a hierarchy of responses. Recourse to criminal sanctions should be extremely rare, and should function primarily as a deterrent to willful or reckless neglect or mistreatment.
Berwick proposes the government creates a new general offence of “willful or reckless neglect”, applicable both to organisations and individuals. Organizational sanctions might involve removing leaders and disqualifying them from future leadership roles, public reprimand of the organization and, in extreme cases, financial sanctions – but only where that will not compromise patient care.
Continue reading “Criminal Charges for Providers Won’t Fix the NHS, Dr. Berwick”
Filed Under: Hospitals
Tagged: criminal sanctions, Don Berwick, health care providers, John Tingle, Malpractice, Mid Staffordshire, NHS, Nurses, Patient Safety, Physicians, practice of medicine, Senior Care, The Conversation
Aug 6, 2013