Paul Levy

People in health care don’t like it when numbers emerge that are uncomfortable.  Take these, issued today by the Massachusetts Health Policy Commission in its latest report on the drivers of the high cost of care in our state.

Variation, particularly when not correlated to quality of outcome, is particularly troublesome for some incumbents.  Academic medical centers often have their answer, but as the HPC explains, it doesn’t hold water:

One oft-cited theory for the cause of this variation is that certain types of hospitals, such as those that teach physician residents and fellows, must incur additional expenses to support their mission. However, the difference in median expenses per discharge between teaching hospitals and all hospitals ($1,030) was less than the difference between individual teaching hospitals ($3,107 between the 75th percentile and 25th percentile teaching hospitals). Moreover, there were a number of teaching hospitals that incurred fewer expenses per discharge than the statewide all-hospital median of approximately $9,000 per discharge.

So perhaps the high cost ones will now revert to the usual squawking: “This isn’t fair. The data are wrong.  Our patients are sicker.”

Except here, the data are the best that could be available–all the claims for all the hospitals and all the payers in the state–even adjusted for wages.  And the acuity of patients across the spectrum of academic medical centers does not vary widely–but, just in case, the numbers are case-mix adjusted.

Continue reading “The Data Are Wrong. Our Patients Are Sicker!!!”

Share on Twitter

Several months ago, I wrote a blog post comparing customers’ experience with Epic with the Stockholm Syndrome.

I reminded people of the syndrome:

Stockholm syndrome, or capture-bonding, is a psychological phenomenon in which hostages express empathy and have positive feelings towards their captors, sometimes to the point of defending them. These feelings are generally considered irrational in light of the danger or risk endured by the victims, who essentially mistake a lack of abuse from their captors for an act of kindness.

Then, I noted:

What is striking about this company is the degree to which the CEO has made it clear that she is not interested in providing the capability for her system to be integrated into other medical record systems.  The company also “owns” its clients in that it determines when system upgrades are necessary and when changes in functionality will be introduced.  And yet, large hospitals sign up for the system, rationalizing that it is the best.

I quoted an article by Kenneth Mandl and Zak Kohane in the New England Journal of Medicine:

We believe that EHR vendors propagate the myth that health IT is qualitatively different from industrial and consumer products in order to protect their prices and market share and block new entrants. In reality, diverse functionality needn’t reside within single EHR systems, and there’s a clear path toward better, safer, cheaper, and nimbler tools for managing health care’s complex tasks.

A year ago, Forbes noted, “By next year 40% of the U.S. population–127 million patients–will have their medical information stored in an Epic digital record.”

It is this last point that we must now address, as I hear from my colleagues in the EHR world—no, not Epic’s competitors– that Epic engages in practices that well help cement that market share for years to come.

Continue reading “An Epic Voyage”

Share on Twitter
A recent report by the New York Times contained an excellent graphic showing the current percentage of uninsured people in each state.  The range is from a high of 24.6% in Texas to a low of 4.4% in Massachusetts.I have combined this rate with the most recently reported CDC rate of obesity in each state to create what I call The Pain Index.  It is a simple sum of the two numbers. 

The theory behind the total is that obesity is a rough guide for the level of unhealthiness in the population.  My hypothesis is that, when insurance is made available to people, they will use it, roughly in proportion to the degree they are unhealthy.

Yes, I know this is a crude metric, but I think it will be a relatively good predictor of the rate of increase in health care costs in each state over the coming years.  This will show up in the insurance premium rates offered in the health care exchanges and will also affect the need for state appropriations to pay for newly eligible Medicaid subscribers.

States with a Pain Index in the top decile are: Texas, South Carolina, Louisiana, Mississippi, and Arkansas.  Others with scores over 45 are Nevada, Florida, New Mexico, Georgia, Alaska, Oklahoma, North Carolina, Kentucky, Alabama, and West Virginia.

My advice to policy-makers:  Get ready!  My advice to health care CEOs:  This would be a really good time to focus on quality, safety, and front-line driven process improvement as the most effective way to reduce your costs and improve efficiency.

Continue reading “The Pain Index”

Share on Twitter

The theory of preventative care, including inoculations, is that we spend a little money now to offset big expenses later in life.  But sometimes behavioral friction keeps this from happening, even when the technologies and approaches are proven.  We are witnessing such a failure right now with regard to Human Papilloma Virus (HPV).

Here’s the story, from MGH’s James Michaelson, PH.D., arguably one of the most thoughtful, trustworthy, and sensible researchers in the field of analysis of cancer survival.  Jim and his team develop sophisticated mathematical methods for predicting the risk of local, regional, and distant recurrence.  He says:

There are a couple of good papers about Human Papilloma Virus (HPV), and the coming epidemic (yes, an overused term, but truly applicable here) of head and neck cancer. As Chaturvedi et al say in a recent paper: “If recent incidence trends continue, the annual number of HPV-positive oropharyngeal cancers is expected to surpass the annual number of cervical cancers by the year 2020.”

I get to see this problem from two angles: From my work as the the manager of the MGH/MEEI Head and Neck Cancer Database, and  from my experiments in using computer telephone messages to get patients in for preventive health services, such as the fabulous HPV Vaccines: Cervarix (from GlaxoSmithKline) and Gardasil (from Merck). The vaccines are incredibly underutilized. Only about 1% of eligible boys and only 50% of eligible girls get one shot.  Only about 25% of girls get all three shots.

Continue reading “How to Stop a Future Cancer Epidemic”

Share on Twitter

This case is prompting a lot of comments, some of them taking issue with the concept of systemic failures and instead asserting that the young nurse was clearly incompetent, in that her error was inexplicable.  So, let’s turn from a clinic in Brazil to a recent case in a hospital in the US, cited in this article on AHRQ’s Web M&M.  A summary:

The order was written correctly in the electronic medical record (EMR) for phenytoin, 800 mg IV. The drug-dispensing machines stocked phenytoin in 250 mg/1 mL vials. The correct dose therefore would require 4 vials and be equal to 3.2 mL to be added to a small IV bag. The nurse misread the order as 8000 mg (8 g) and proceeded to administer that dose to the patient, which was a 10-fold overdose and 2 to 3 times the lethal dose. The patient died several minutes after the infusion.

This nurse had to work hard to make the error:

An audit of the pharmacy system revealed that the nurse had taken 32 vials out of 3 different pharmacy dispensing machines to accumulate 8 g of IV phenytoin. Moreover, the nurse had to use two IV bags and a piggyback line to give that large a dose.

Continue reading “Is the Nurse Incompetent?”

Share on Twitter

First the definition:

Stockholm syndrome, or capture-bonding, is a psychological phenomenon in which hostages express empathy and have positive feelings towards their captors, sometimes to the point of defending them. These feelings are generally considered irrational in light of the danger or risk endured by the victims, who essentially mistake a lack of abuse from their captors for an act of kindness.

Now, the health care connection.  As a result of the billions of dollars allocated by Congress to health information systems as part of the stimulus program, those companies who had a head start in implementing electronic medical records quickly found themselves in demand.  Of all those companies, Epic is the most successful. Forbes notes, “By next year 40% of the U.S. population–127 million patients–will have their medical information stored in an Epic digital record.”  Here in Massachusetts, the biggest convert was Partners Healthcare System:  “System development and implementation will occur over a 10-year period and represent a capital investment of approximately $600 – 700 million.”  Elsewhere, notes Forbes: “The biggest win: a $4 billion project to digitize medical records for health care giant Kaiser Permanente.”

What is striking about this company is the degree to which the CEO has made it clear that she is not interested in providing the capability for her system to be integrated into other medical record systems.  The company also “owns” its clients in that it determines when system upgrades are necessary and when changes in functionality will be introduced.  And yet, large hospitals sign up for the system, rationalizing that it is the best.  For example, Partners said, “The new health care landscape will challenge us to engage in population health management, improve the coordination of health care, and accept financial risk for the care of our patients. This new system will enable us to meet those challenges.”

Continue reading “The Stockholm Syndrome and EMRs”

Share on Twitter

Julie Creswell and Reed Abelson offer a story in the New York Times about the HCA for-profit hospital system, noting “A giant hospital chain is blazing a profit trail.”  The HCA story and similar ones about other hospital chains financed by private equity force us to consider how a such firms can achieve a return on equity that satisfies investors.

The answer is that they cannot, if we think about running the business on a long-term basis.  What makes it work is extracting cash and the exit strategy, the heart and soul of private equity.

As Warren Buffett might say, let’s keep this simple.  A for-profit hospital system has the following disadvantages vis-a-vis a non-profit hospital system:  (1) Its finances are a mixture of equity and taxable debt, both of which are more expensive than the nontaxable debt of a non-profit; (2) it pays taxes–federal and state income tax, property tax, and sales tax–on which the non-profit is exempt; and (3) it is an unattractive vehicle for charitable donations, compared to the tax-advantages offered donors of non-profits.

These are hefty financial advantages for non-profits, which nonetheless are fortunate if they are able to earn an operating margin of 3%.  Admittedly, that’s 3% of revenues, not a 3% return on capital.

An equity investor in a for-profit doesn’t care about margin, strictly speaking, but rather is focused on the rate of return of his or her investment.  But let’s stick with the operating margin just for a moment, and let’s just accept that a 3% margin would not generate the kind of equity return demanded by the market place:  You pick the hurdle rate:  15%, 20%, 25%, more?  It doesn’t matter.  A three percent margin just doesn’t get you there.

Continue reading “Let’s Do the Numbers”

Share on Twitter

At the recent Health Care Quality Summit in Saskatoon, Sarah Patterson, the Virgina Mason Medical Center expert on Lean process improvement, noted,  “I’d rather have no board rather than an out-of-date board. They have to be real.”  She was referring to the PeopleLink Board that is placed is key locations in her hospital to provide real-time visual cues to front-line staff as to how they are doing in meeting quality, safety, work flow, and other metrics in the hospital.

Now comes the CDC, announcing in April 2012, that 21 states had significant decreases in central line-associated bloodstream infections between 2009 and 2010.

CDC Director Thomas R. Frieden, said “CDC’s National Healthcare Safety Network is a critical tool for states to do prevention work. Once a state knows where problems lie, it can better assist facilities in correcting the issue and protecting patients.”

I am trying to be positive when progress is made, and I am also trying to be respectful of our public officials — whom I know to be dedicated and well-intentioned — but does Dr. Frieden really believe that posting data from 2009 and 2010 has a whit of value in helping hospitals reduce their rate of infections?

Try to imagine how you as a clinical leader, a hospital administrator, a nurse, a doctor, a resident, or a member of the board of trustees would use such data.  Answer:  You cannot because there is not use whatsoever.

I am also perturbed by the CDC’s insistence on using a “standardized infection ratio” as opposed to a simple count of infections or rate of infections per thousand patient days.

Continue reading “A (Real) Tragedy at the CDC”

Share on Twitter

A remarkable aspect of the Parkland Memorial Hospital saga was the degree to which the hospital’s Board was not given information by senior management about the clinical outcomes in their hospital.  The lack of transparency, in other words, even went to management’s relationship with its fiduciary board.

A recent article by the Dallas Morning News outlines some of these points:

On August 19, the hospital’s seven-member board of directors got its first chance to read the full report by the U.S. Centers for Medicare & Medicaid Services.  Almost 10 days had passed since [the CEO] first received the findings.  As members began leafing through pages of the report, surprise, even shock, began to register.

The Chair of the board said, “We had direct culpability, but none of us even knew we were in the report.”

Continue reading “Have We Not Been Looking at Things We Should Have Seen?”

Share on Twitter

Can anyone doubt that the recent kerfuffle faced by Parkland Memorial Hospital in Dallas would have had a greater chance of being avoided if earlier reviews by the CMS-designee, the Joint Commission, would have been made public?  Yet, JC surveys are held in confidence.  This is a matter of federal law.

Currently, the results of hospital accreditation surveys cannot be accessed by the public under Section 1865 [42 U.S.C. 1395bb] (b) of the Social Security Act, which reads as follows:

“(b) The Secretary may not disclose any accreditation survey (other than a survey with respect to a home health agency) made and released to the Secretary by[615] the American Osteopathic Association[616] or any other national accreditation body, of an entity accredited by such body, except that the Secretary may disclose such a survey and information related to such a survey to the extent such survey and information relate to an enforcement action taken by the Secretary.”

When I was CEO of a hospital, we voluntarily made our JC surveys public, posting them on our corporate website.  We felt that it was important for all staff in the hospital to have the chance to review the findings and act on them, and we also felt that public confidence in our hospital would be enhanced by this kind of transparency.  While this practice has spread somewhat, most hospitals still do not make their surveys public.

Continue reading “Time to Make Joint Commission Surveys Public”

Share on Twitter

Masthead

Matthew Holt
Founder & Publisher

John Irvine
Executive Editor

Jonathan Halvorson
Editor

Alex Epstein
Director of Digital Media

Munia Mitra, MD
Chief Medical Officer

Vikram Khanna
Editor-At-Large, Wellness

Joe Flower
Contributing Editor

Michael Millenson
Contributing Editor

We're looking for bloggers. Send us your posts.

If you've had a recent experience with the U.S. health care system, either for good or bad, that you want the world to know about, tell us.

Have a good health care story you think we should know about? Send story ideas and tips to editor@thehealthcareblog.com.

ADVERTISE

Want to reach an insider audience of healthcare insiders and industry observers? THCB reaches 500,000 movers and shakers. Find out about advertising options here.

Questions on reprints, permissions and syndication to ad_sales@thehealthcareblog.com.

THCB CLASSIFIEDS

Reach a super targeted healthcare audience with your text ad. Target physicians, health plan execs, health IT and other groups with your message.
ad_sales@thehealthcareblog.com

ADVERTISEMENT

Log in - Powered by WordPress.