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The 25 Questions

Recently, I had an enlightening encounter with Horst Schulze, who led Ritz-Carlton Hotels to national awards and has since opened his own hotel chain, Capella. Hortz gave an informal presentation to members of a program that I’m taking part in, the Baldrige Executive Fellowship, and we continued to talk afterwards. Capella has five ultraluxury hotels from New York to Singapore, and all have been recognized as tops in their region. Horst spoke to us of a culture of excellence. He knows—he has built such a culture time and time again. Excellence does not occur by chance. It requires clear goals and a system.

Horst explained that to be great, everyone in the organization needs to know the goals, in order of importance. For Capella, the goals are 1) keep existing customers, 2) add new customers, and 3) optimize the spend of each customer. Every employee not only needs to know the goals, but they need to know the behaviors to achieve them. The Capella employees ensure a warm welcome, compliance with and anticipation of guests’ needs, and a fond farewell.

All employees are required to know service standards. Twenty-five of them. One of them states that you are responsible to identify and immediately correct defects before they affect a guest—for example, getting customers food when the restaurant is closed. Defect prevention is key to service excellence, just as it is to delivering safe health care. Another service standard states that when a guest encounters any difficulty, you are responsible to own it and resolve the problem to the guest’s complete satisfaction.

Capella has standard processes for everything—how to submit defects, how to resolve them. And they trained staff in the goals, the behaviors and the processes. Each hotel, every morning is required to have a huddle at which all staff attend. They review the goals for the company and read one of the behaviors, called service standards. Every day they read a different one. They cycle repeats every 25 days.

If a manager did not do this, Horst said, they would be fired.

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It Doesn’t Have to Be This Way …

I was struck by the recent story in the New York Times about a young boy who was misdiagnosed, and lost his life.

The boy, Rory Staunton, was a healthy, active 12-year old, until one day he ended up in the middle of our time-strapped, broken healthcare system.  He was treated by good, well-intentioned doctors, at a leading medical center, but something went terribly wrong.  What started out as a minor cut suffered in a basketball game turned into a major infection that took his life.

Yet nowhere along Rory’s journey, from boy with a bellyache on Thursday to gravely ill boy on Friday night, did anyone act on strong indications that he might be fighting for his life. Critical information gathered by his family doctor and during his first visit to NYU Langone was not used, was not at hand or was not viewed as important when decisions were made about his care, records show.

Story’s like Rory’s happen far too often, and in far too familiar ways.  Scientific studies show that patients are misdiagnosed between 15% and 44% of the time.  Researchers have found that the combination of fragmented medical information and not enough time between doctor and patient are the leading causes of this problem.  And yet, much of America is still unaware how often misdiagnosis happens.  Lost in all the politics of healthcare is a recognition that, at its core, healthcare must be about making sure each and every patient gets the right care.

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Health Insurers & the Affordable Care Act: Extinction or Reinvention?

Now that the Supreme Court has upheld the constitutionality of the Patient Protection and Affordable Care Act (PPACA), health insurers are scrambling to reinvent themselves for a new era.  In an earlier post, I quoted Aetna CEO Mark Bertolini as saying he wants to create a business model that makes sense under the new rules and regulations.  In a recent speech Bertolini  explained, “We need to move the system from underwriting risk to managing populations.  We want to have a different relationship with the providers, physicians and hospitals we do business with.”

Starting with Aetna, this analysis will examine the ways that insurance companies are trying to reinvent themselves for a reformed health care delivery system that often wonders why we need health insurers at all.

Early this year, Aetna decided to evolve “’from an insurance carrier to a health solutions company.” ”The head of brand and consumer marketing at Aetna stated, “’More and more, the end consumer is who we need to focus on.’” Aetna has developed Care Pass Platform, an agnostic tool that all consumers can use to aggregate and organize their fitness, medical, insurance and nutrition data. Aetna is also partnering with Medicity to provide smartphone apps for providers and iTriage to provide apps for consumers.

Clinical Practice Guidelines as “Safe Harbors” against Malpractice Claims

Health care costs too much in the United States. One key problem is gold-plating of services driven by physicians’ fears of lawsuit for failure to do everything possible for patients. A notable example of such overutilization is increasingly routine ordering of advanced imaging or other tests. Reliable, evidence-based clinical guidelines promise to address low-value utilization by authoritatively stating standards of good care in advance.

Some thought leaders among Democrats seek to use guidelines to side step the routinized political battles over malpractice reform. Republicans have been saying that defensiveness and other problems justify caps and other limits on medical liability. Belittling defensiveness as a problem, Democrats have defended and promoted liability as an incentive for good care.

Defensiveness is a problem, acknowledge proponents of guidelines to reform liability. But it can be fixed simply by legislating that adherence to reliable guidelines constitutes a “safe harbor” against lawsuits for failure to do more. Safe harbors would remove the motivation for defensiveness and also any need to accept Republicans’ caps and other limits. Given the political stalemate in Washington, the idea is worth thinking through.

Good guidelines are a good idea, especially to improve quality of care, which is their main policy driver. And, because guidelines hold promise for cutting wasteful defensiveness, they have superficial appeal as a liability reform. However, practical feasibility limits the reach of safe harbors, as explained in a recent policy brief from The Urban Institute for the Robert Wood Johnson Foundation.

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A Healthcare Contract With America

Critics of the Affordable Care Act (Obamacare) need an alternative vision. What follows is a short explanation of the core ideas posted at the Congressional Health Care Caucus and developed in greater detail in the book Priceless: Curing the Healthcare Crisis.

Tax FairnessFamilies at the same income level should get the same help from government when they obtain private health insurance, regardless of where they obtain it. The federal government encourages the purchase of private health insurance through the tax system. Yet the current approach is arbitrary, regressive and unfair. Instead of paying taxable wages, employers are able to purchase health insurance for their employees with untaxed dollars. These employer-paid premiums avoid federal income taxes, federal payroll taxes (FICA), and state and local income taxes as well. This “subsidy” is worth almost half the cost of the insurance for a middle income family. Yet the same family receives virtually no tax relief if it purchases the insurance on its own.

Because of the way we subsidize private health insurance, the higher the family’s tax bracket, the greater the subsidy. A family earning $100,000 gets six times as much tax relief as a family earning $25,000. We are giving the most encouragement to those who need it least.

As an alternative, we should replace the current system of tax and spending subsidies with a system that offers everyone a uniform, fixed-dollar tax credit for the purchase of health insurance. The credit would be refundable, so that it would be available even to those with no tax liability. A reasonable goal, for example, would be a credit of $2,500 per adult and $8,000 for a family of four.

Universality: Unclaimed tax relief should be made available to local safety net institutions to be used in case the uninsured cannot pay their own medical bills. If an individual chooses to be uninsured, the unclaimed tax credit should be sent to a safety net agency in the community where the person lives. These funds would provide a source of finance in case the uninsured are unable to pay their medical bills.

Under this approach, the government pledges a fixed sum of money for every individual and money follows people. If everyone in Dallas County opts to obtain private insurance, there would be no need to fund a safety net and all the government’s support would be in the form of tax credits for health insurance premiums. On the other hand, if everyone in Dallas County opts to be uninsured, all the unclaimed tax credits would go to safety net institutions in Dallas.

This is an easy reform to implement, even if peoples’ insurance status changes often over the course of a year. All the federal government needs to know is how many people live in each community. If the tax credits claimed on income tax returns fall short of their potential for the community as a whole, the balance would be provided in the form of a block grant to be spent at the local level.

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Climbing the Medicaid Mountain

Multistate Challenge to the Affordable Care Act

The Affordable Care Act envisions a major expansion of health insurance in America, with some 30 million Americans gaining coverage. That figure includes some 17 million people with low incomes who were to get health insurance via an expansion of Medicaid eligibility. With eligibility raised—from 100 percent of the poverty level to 133 percent—many states will enlarge their Medicaid rolls and pay for it with federal funds, at least for a few years.

But the Supreme Court clouded that part of the vision last week, ruling that states cannot be penalized for refusing the federal money—thus leaving in doubt how many of the projected 17 million poor or near poor citizens will actually get coverage.

In short, the Supreme Court allowed the federal carrot to remain, but took away the stick. Matt Salo, the executive director for the National Association of Medicaid Directors, an organization for those who run state programs, summed it up for The Washington Post: “Prior to the court’s decision, failure to implement this expansion meant you [the states] lost all your Medicaid funding. Now you have a political and financial decision to make: Do you do this?”

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What Will the Supreme Court Decision Mean For the November Election?

Thursday, when Chief Justice Roberts explained that the Affordable Care Act (ACA) is constitutional because the “penalty” that some Americans will have to pay is, for all practical purposes, a “tax,” you could hear tea cups shattering from Billings to Boca Raton. In conservative and libertarian circles, the initial reaction was shock, but it didn’t take long for President Obama’s opponents to rally.

The word “tax” might as well have been a pistol shot at a horse race. In the blink of an eye, Obama’s opponents were off and running, megaphones in hand, blasting the president for lying to the American people while hiking taxes under the guise of healthcare reform. Presidential candidate Mitt Romney’s campaign then began providing regular Twitter updates on the campaign contributions it was raking in following the decision. Friday, it announced that it had collected $5.5 million.

Will Republicans suceed in turning defeat into victory?

Sarah Palin is convinced that they will. On her Facebook page, she celebrated: “Thank you, SCOTUS. This Obamacare ruling fires up the troops as America’s eyes are opened.”   Palin, like Republican leader Mitch McConnell, believed that the Court’s ruling would galvanize Republic voters, sealing Romney’s victory in November.

This might be true if conservatives were not already so ardently committed to what McConnell has called his party’s “single most important” goal: “for President Obama to be a one-term president.”  As Democratic pollster Celinda Lake noted, “Republicans are already as energized as they can get.” It would be hard to turn up the dial on their passion. Opinion surveys have shown that Republican voters already were more motivated than Democrats to go to the polls this fall.   (In November, Obama’s challenge will be to get his supporters out, including those who are disillusioned that the president hasn’t done more to help the poor and the unemployed. )

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A (Real) Tragedy at the CDC

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.

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The SCOTUS Pregame Show

This post is intended for those who do not follow the Court’s work closely, but are tuning in now largely because of the ACA decision. (For avid Court watchers, this stuff is terribly obvious, so I apologize.) My goal is just to briefly explain what work is left for the Court this Term, and how it might affect the timing of when HHS v.Florida (and Florida v. HHS and NFIB v. Sebelius) are handed down.

First, the numbers. Setting aside the ACA cases, the Court essentially has twelve other decisions to hand down. (I say essentially, because Miller v. Alabama and Jackson v. Hobbsare separate cases, though they raise the same basic Eighth Amendment question. Thus, they are sure to be decided together, whether in two opinions or one, and probably with the same majority opinion author.) Those are, in the order of argument:

1.  First American Financial Corp. v. Edwards (argued November 28)
2.  Williams v. Illinois (argued December 6)
3.  Knox v. SEIU (argued January 10)
4.  FCC v. Fox Television Stations (argued January 10)
5. United States v. Alvarez (argued February 22)
6.  Southern Union Co. v. United States (argued March 19)
7.  Miller v. Alabama and Jackson v. Hobbs (argued March 20)
8.  Christopher v. SmithKine Beecham Corp. (argued April 16)
9.  Dorsey v. United States (curvelined with Hill v. United States) (argued April 17)
10.  Salazar v. Ramah Navajo Chapter (argued April 18)
11. Match-E-Be-Nash-She-Wish Band v. Patchak (curvelined with Salazar v. Patchak) (argued April 24)
12. Arizona v. United States (argued April 25)

The Court will hand down one or more opinions–almost certainly more than one–this coming Monday, June 18. The Court will then announce–probably on Monday, probably before noon–whether it will hand down any more opinions later next week. Of course, it will not announce which opinions, just whether it will hand any more down.

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