THCB

Surviving Healthcare

Joe Flower

Health care is fragile. It survives in a much narrower band of circumstances than most of us realize. Right now many hospitals and systems are having a second down year in a row. They’re consolidating, laying off people, working through major shifts in strategy — all because of what we must admit (if we are honest) are relatively minor economic shifts, such as small reductions in utilization and Medicare payments, a blunting of accustomed price rises, and stronger bargaining from health plans.

If minor revenue stream problems put your entire institution in jeopardy of chaotic deconstruction, it cannot be called robust.

At the same time, an increasing number of vectors outside the sealed world of health care could overwhelm and kill your institution, from climate chaos to pollution disasters to epidemics and the loss of antibiotics.

These two concatenations of threats, within and without health care, have similar and interlocking answers. The extent to which your institution is bloated, profligate of resources and highly dependent on its current streams of revenue, energy and human resources is exactly the extent to which it is a system with very little reserve capacity. In an increasingly high-variance world, your survival depends on getting green, lean, resilient and smaller.

Making Health Care Resilient

The world is losing stability. The number and types of crises that could overwhelm our systems are increasing.

In this country, the most likely include epidemics, as illustrated by our current Ebola scare. The Big One will not have Ebola’s immunological profile. Imagine instead a disease that is much more easily spread, through the air (sneezes, coughs) or via animals (fleas on rats, mosquito bites). It would be hardy, capable of surviving for long periods on door handles, produce, money, aircraft arm rests. It would have a long latency period during which it can be spread without the carrier knowing it (as with HIV).

There would be no effective vaccine or treatment for the Big One. It would not kill most of its carriers, leaving them able to roam the world and infect others. Imagine all that, and you are imagining a plague powerful enough to kill hundreds of millions, maybe billions, around the world — and in your town.

We can imagine bacterial epidemics as well, because of the speed with which we are losing the effectiveness of many of our existing antibiotics.

At the same time we will suffer recurring pollution disasters through a number of vectors, including most likely in the United States from the byproducts of fracking and other oil production disasters. We will see increasing air pollution, including some from abroad. Already, 25 percent of the particulates in the air in California come from China.

In California and the West Coast in general the big concern is earthquakes. A recent report estimated that in a major quake in the Los Angeles area we could lose 60 percent of the region’s hospital capacity in a matter of seconds.

At the same time in the West we will experience more frequent drought, as we are right now. In the East, we may well see more rain, but more of it will arrive in super storms. Climatologists are revising their analyses. Many are saying that something like Hurricane Sandy, which would formerly be considered a very rare event, a 100-year storm, should now be considered a five-year storm. The affects of these more frequent major storms will be exacerbated along much of the East Coast not only by slowly rising seas but by land subsidence.

What can we do? An excellent article by Alex Ulam on archpaper.com, the architect’s newspaper, quoted my good friend Robin Guenther of Perkins+Will architects: “They [our clients] want to be on board with resilience, but if they are not on board with sustainability, an important challenge is getting people to see them as the same thing.”

Designers and architects have learned a lot from the recent disasters such as Hurricane Katrina in New Orleans, the flooding of the Texas Medical Center, Hurricane Sandy in New York and New Jersey, and tornados in the Midwest. We see them in such new features as the elevated energy plant for the Texas Medical Center. We see it in the Spaulding Rehabilitation Hospital in Boston, designed by Perkins+Will with, among many other things, a gas-fired co-generation unit that enables the hospital to produce its own electricity and its own thermal energy, and windows that open in case the HVAC goes out. As Guenther noted, in Hurricane Katrina in New Orleans the staff of Charity Hospital was throwing furniture through the windows to get some ventilation in the sealed buildings.

The replacement Veterans Administration Medical Center (VAMC) in New Orleans demonstrates the “defend in place” concept adopted by the new medical centers of the VA. Designed to keep operating when everything around it falls apart, it has extra capacity to deal with inflow of patients in disasters and when other facilities fail. It could last five to seven days on full emergency power. All its mission-critical functions are 20 feet above grade. The elevated emergency department has ramp access that can double as a boat landing. There is military helicopter access on the roof of the parking structure. It will survive.

When 95 percent of Greensburg, Kan., was destroyed by a massive tornado in 2007, Kiowa County Memorial decided to rebuild a hospital as sustainable and resilient as possible. It’s the first hospital with a 100 percent independent, renewable energy system. They achieved a 57 percent reduction in potable water use. Rainwater is captured for non-potable uses.

To truly be resilient, many hospitals may need their own levee system and, where possible, their own independent water sources as well as full generating capacity that can be independent of the local grid, built above the 100-year flood level.

Hospitals need to get good at evacuation under crisis conditions. This is not only about planning and architecture, it is about having the right equipment, the right plans, the right procedures and real drills in carrying them out.

As in much of what we talk about, all of this has upfront costs. It is expensive, sometimes very expensive. But when looked at it in any perspective larger than this quarter, this year, this funding cycle, it can save enormous amounts of money.

A great example is Lourdes Hospital in Binghamton, N.Y. In 2006, a 500-year flood forced the hospital to shut down and evacuate patients. The flood caused an estimated $20 million in damages. With help from the state and the Federal Emergency Management Administration (FEMA), Lourdes rebuilt to include a flood wall and flood gates. And it turned out what had been thought to be a 500-year flood recurred in five years. In 2011 the waters came back, the flood gates closed automatically, the flood walls held and Lourdes continued to function with no damage.

So we can reduce the carbon footprint, the resource use, the waste, by making hospitals and medical centers more resilient to chaos, storms, wildfires, epidemics and earthquakes.

Making Health Care Greener

How do we make health care greener? How do we reduce its emissions, its carbon footprint, its resource use?

The Center for Health Design’s partnerships and collected studies are bursting with examples of integrated landscapes, green walls, urban farming, natural light, low energy HVAC, natural ventilation, solar shading, daylight harvesting, night flush cooling, solar energy and on and on. The “bible” of the movement is Guenther & Vittori’s Sustainable Healthcare Architecture (Wiley, 2013).

The real point of all these examples for this column is that there is a business case for green building techniques. As the Center for Health Design researchers Blair Sadler, Leonard Barry, Robin Guenther, Kirk Hamilton, Fred Hessler, Clayton Merritt and Derek Parker showed in the Fable Hospital 2.0 study, there is a real and measurable return on investment for evidence-based design, for design centered on the best evidence for patient safety, resilience and sustainability.

The American Hospital Association’s American Society for Healthcare Engineering and the Health Research & Educational Trust, an AHA affiliate, have just released their own valuable paper, “Environmental Sustainability in Hospitals: The Value of Efficiency,” including case studies, a sample hospital sustainability statement, benchmarking tools and charts of how to structure an environmental leadership council.

So yes, we can reduce the carbon footprint, the resource use, by making our systems resilient, and again by making them smart, cunning, clever. But we can go further into the actual processes of health care.

Making Health Care Leaner

Getting lean, learning the skills of the Toyota Production System and its offshoots, is finally spreading across health care.

Some places are getting serious about cost accounting. Most health care institutions have no clue what it actually costs them to produce a given product: a birthed baby, say, or a new hip. That makes it hard to cut costs, since you don’t know which costs are important.

Some organizations are now engaging in time-driven activity-based costing, which is simple but laborious arithmetic, meticulously going through everything needed to contribute to the outcome, and adding it up. Then they are able to pinpoint what is costing them money and what part of that is waste, and convene lean health care working groups to rework their processes. Many groups across health care report that they can cut costs by 20 percent or 25 percent or more while taking on more patients at a higher level of quality.

So we can reduce the carbon footprint and cut the resource use, by making health care resilient, by making the systems smart, then by cutting the resource use of each process.

But that still leaves us with the biggest question, the most fundamental question: Does health care even have to be so huge? The answer, unequivocally, inarguably, is no.

Making Health Care Smaller

The easy, obvious part is to ask how much of health care is just plain waste, stuff we would not miss if we stopped doing it. The answer is known, and the answer is shocking. Numerous studies have delivered a conservative consensus that one-third of everything we do could disappear — is just a waste of money, effort and lives. A few prominent examples include complex back fusion surgery for simple back pain (not medically indicated), computer-aided mammography (a $500 million per year extra cost, no extra tumors found), using colonoscopies as a mass screening device (unnecessary, at a cost of $10 billion per year) and using anesthesiologists for those colonoscopies (unnecessary, at an extra $1.1 billion per year).

Can we imagine getting rid of this waste? Remember why we do all this wasteful stuff — because we are paid to. In the fee-for-service business model, we make money at every one of those things. If the business model changes in any significant way to pay for results rather than processes, the waste will disappear. If they don’t pay us to do things, we won’t do them. It’s really that simple. And that difficult.

Does this stand a chance of happening? Amazingly, it does. You are already feeling it in your markets. Employers are trying dozens of different ways of paying for health care, and incentivizing new ways of delivering health care.

Health plans are following their market into these experiments. Consumers will soon be seeking them out, as people increasingly have “skin in the game,” have an incentive to ask the basic consumer questions: “Do I need this? Is it worth it? Can I do without it? What are my options?”

The graph of health care costs is already starting to shift its direction. The overall rise in health care costs the last few years is already the lowest it has been in 50 years.

Soon it will tick downward. Health care costs will fall. And when they do, everything in health care will change — every business model, every corporate structure, every career, your career. It will change, it will have to change, into something deeply more resilient, greener, leaner and smaller.

Any serious discussion of sustainability in health care inevitably becomes a handbook for the revolutionary, a handbook for changing health care overnight.

(First published in the American Hospital Association’s Hospitals & Health Networks Daily, September 23, 2014)

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Don LevitAllan@BobbyGvegasallan Recent comment authors
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@BobbyGvegas
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Don Levit
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Bobby:
Insurance is the aggregate pooling of risk.
Why do you add social to it, which I assume means “socialism?”
The community supporting vulnerable individuals is a beautiful concept, bringing out some of the best aspects of our human compassion based on justice.
Don Levit

@BobbyGvegas
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“When patients pay they are far more careful with their dollars than when government pays or hires companies to pay for them.”
__

Better sock away enough for that CABG.

Allan
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Allan

That is why people voluntarily purchase insurance.

But, maybe you prefer the high rates created by too much government intervention. That boosts up premiums and makes it less likely for insurance to be purchased.

Take note there is such a thing as subsidies that can be given in many different fashions to those without sufficient capital to afford the treatment or the insurance premiums.

@BobbyGvegas
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Insurance — in addition to being, well, “socialist,” insofar as it is inescapably the pooling of risk — is stlll 3rd party intermediation, replete with all of those maddening, inscrutable codes and rules and exclusions, all of them explicitly designed and implemented for the net benefit of the seller.

Allan
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Allan

Voluntary insurance or pooling of risk or resources is not socialistic. Insurance is part of the market system. Where did you ever get the notion that voluntary insurance is socialistic?

If an individual buys insurance for themselves or has their agent by it for them that insurance is not third party payer. It becomes third party when one party buys the insurance for someone else.

Be careful when you adopt soundbites from the left. Most of them are very inaccurate and self serving.

@BobbyGvegas
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Spare me your customary condescension. It most certainly IS the “social”/aggregate pooling of risk. The fact that it’s “private market-based” rather than publicly-mandated does not change that fundamental fact one iota. There is in fact a 3rd party. No amount of ideological denial can change that.

I don’t adopt anything. I think for myself.

Allan
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Allan

Bobby, you need to learn what condescension is. When you debate and make mistakes in terminology or otherwise, the other person has to correct you. You make too many mistakes and that is well documented. Socialism is political. Insurance is a way of selling or transferring risk. You probably heard your statement from some left wing blog. I’ve heard it before, but it is a dumb statement that lacks any understanding of what either word means. Third party is a term. It has a definition. You can’t simply make up your own definitions. “I don’t adopt anything. I think for… Read more »

allan
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allan

Since hospital costs are a major cause of our fiscal crisis in healthcare is it such a bad thing that hospitals become leaner? We have noted that our dollar is rising compared to the euro. In part that is because the private sector has become leaner and therefore more productive. This is what is needed for our healthcare system though it must be done organically, not through such intense government intervention or pressure. You rightfully worry about the Big One, but what are we doing to protect ourselves from it? By destroying many important parts of the healthcare sector we… Read more »