In the 20th century, hospitals completed their
transformation from the hospice-like institutions of the Middle Ages, into
large, gleaming centers of advanced medical expertise and technology that save
and improve lives every day. But an unintended consequence of hospitals’
dazzling capabilities is a staggering cost burden that’s proving toxic to the
Today, hospital care accounts for approximately 33% of the US’ $3.5 trillion annual health care expenditures, according to CMS. The drivers of hospital costs are complex and hard to tackle, including (but not limited to) market consolidation that enables price hikes, heavy administrative burdens, expensive technology and patient usage patterns.
In The Innovator’s Prescription, Clayton Christensen et al. explained another important driver of high hospital care costs: conflation under one roof of business models designed to address very different needs—such as the need for diagnosis of unique, complex conditions and experimental treatments, versus that for highly standardized services (for instance, some surgical procedures). This common phenomenon makes optimization of either business model very difficult, and thus drives up overhead costs.
One solution to this seemingly intractable
problem is to make home and community the default locations for care, where in
many circumstances it can be provided less expensively, more conveniently, and
more effectively than in a hospital. Fortunately, business model innovation
toward this end is gaining traction.
Discouraging headlines remind us daily of the ugly battles between payers and providers. Fighting for their slice of the $3.5 trillion health care pie, these companies often seem to leave the consumer out of the equation. But it is not the case across the board. Our latest research documents that when doctors and health plans drop their guards, align incentives and focus on the mutual goal of delivering the best possible care, patients win.
For example, when SelectHealth in Utah
partnered with obstetricians and refused to pay for medically unnecessary — often
dangerous — early inductions of labor,
procedure rates dropped from 28% to zero, leading to shorter labors, fewer
C-sections and $2.5 million in annual savings for all. When Kaiser Foundation Health
Plan execs collaborated with Permanente doctors around opioid safety, prescriptions
for the often-deadly drugs dropped 40%. And, when Security Health Plan in
Wisconsin enlisted physicians and surgeons to develop a new outpatient surgery
and rehab center, health outcomes improved; patient satisfaction jumped to 98%;
and they saved $4.7 million in the first two years.
Back in the
‘stone ages’ when I (an MIT grad) was an intern, I was called at 4 AM to see
someone else’s gravely ill patient because her IV had infiltrated. I
started a new one and drew some blood work to check on her status. When
the results came back (on paper) I (manually) calculated her anion gap.
This is simple arithmetic but I had been up all night and didn’t do it right.
rounds the attending assured me that there was nothing I could have done anyway
but, of course, in other circumstances it could have made a difference and an
EHR could have easily done this calculation and brought the problematic result
to my attention. My passion for EHRs and FHIR apps to improve them really
traces back to this patient episode I will never forget.
My criticism of the recent Kaiser Health News and Fortune article Death by 1000 Clicks is generally not about what it says but what it doesn’t say and its tone.
The article emphasizes the undeniable fact that EHRs cause
new sources of medical error that can damage patients. It devotes a lot of ink
to documenting some of these in dramatic terms. Yes, with hundreds of vendors
out there, the quality of EHR software is highly variable. Among the major
weaknesses of some EHRs are awkward user interfaces that can lead to errors. In
fact, one of the highlights of my health informatics course is a demonstration
of this by a physician whose patient died at least in part as a result of a
poor EHR presentation of lab test results.
However, the article fails to pay equal attention to the
ways EHRs can, if properly used, help prevent errors. It briefly mentions that
around a 60% majority of physicians using EHRs feel that they improve quality. The
reasons quality is improved deserved more attention. The article also fails to
discuss some of the new, exciting technologies to improve EHR usability through
innovative third party apps and he real progress being made in data sharing
including patient access to their digital records.
As U.S. providers continue their slow but steady march away from fee-for-service reimbursement and toward value-based payments, they’re increasingly seeking means of addressing patients’ health-related social needs. That’s because social determinants of health—life circumstances including socioeconomic status, housing, education, and employment—are estimated to have at least twice the impact on risk of premature death than health care. So addressing them is an important part of value-based strategies aiming to improve health while reducing health care costs.
Hennepin Health, a safety-net Accountable Care Organization (ACO) serving Medicaid patients in Minneapolis, Minnesota, is an encouraging example of the trend. Hennepin Health’s ACO is a partnership between the county’s local Human Services and Public Health Department, a local teaching hospital, a Medicaid managed care health plan, and a Federally Qualified Health Center. Its innovative care model is designed to meet the unique needs of the partners’ shared, “high-risk” members, whose complex combination of issues—such as mental illness, addiction, homelessness and/or other hallmarks of social deprivation—often prevent them from accessing or receiving appropriate care through the traditional health system.
The ACO is staffed by an integrated care team comprised of
physicians, nurses, pharmacists, social workers and community health workers.
Unlike traditional care processes, which often only involve medical assessment,
Hennepin Health’s begins with an assessment of members’ social needs, like
housing and food insecurity, or lack of transportation and unemployment, so
that its care team can tackle those barriers to health in conjunction with
members’ medical problems. And throughout members’ care, the team strives to
develop and maintain a trusting relationship with members, many of whom have
been let down by traditional health care, so that they can continue to identify
and assist with more health and social needs over time.
Results thus far has been impressive—according to a Commonwealth Fund case study, the ACO’s medical costs fell an average of 11% per year between 2012 and 2016. And, between 2012 and 2013, its members’ emergency room visits decreased by approximately 9%, with hospital admissions remaining flat and outpatient visits increased by 3.3%. Assuming its results have continued on the same trajectory (we could not find more recent figures), Hennepin Health’s innovative care model shows significant promise.
But does it have the potential to disrupt America’s traditional, episodic, acute care delivery model? We put it to the test with six questions for identifying a Disruptive Innovation.
Every year at this time, you hear warnings that flu season has arrived. New data from the CDC indicates the season is far from over. So, you are urged by health authorities to get a flu shot. What you may not realize is how the flu can affect the hospitals you and your loved ones rely on for care.
In January, the large urban hospital where I am an intern faced the worst flu outbreak it has ever seen. Nearly 100 staff members tested positive for the flu. Residents assigned to back-up coverage were called to work daily to supplement the dwindling ranks of the sick. Every hospital visitor was required to wear a mask upon entry. At one point, every patient in the medical ICU had the flu and the whole unit had to be quarantined. Because of this, the hospital was put on diversion – no new patients could be admitted.
Why was this flu outbreak so bad? Doctors are still trying to understand all the causes, but one likely reason is that hospital staff with symptoms came to work and became a reservoir for the virus. A majority of visitors and patients don’t get their flu shots, making matters even worse.
Once administrators caught on to the mess this year’s flu was creating, they took some new and aggressive measures. In addition to the free vaccines provided to employees every year, they performed daily symptom check-ins, encouraged sick days, and held an influenza town hall. After discussion with the State Department of Health, medical residents were provided free Tamiflu and urged to take it as prophylaxis. Only 40% picked it up. Residency directors asked symptomatic house staff to stay home. A positive flu swab meant a mandated five days off work. One month later, we are still required to check in daily and confirm that we are symptom-free via a text messaging system or a checklist circulated to each hospital floor. These responses were effective, and the wave of flu appears to have passed. We must now plan ahead to prevent the next outbreak.
Say you want to know which baseball players provide the most value for the big dollars they’re being paid. A Google search quickly yields analytics. But suppose your primary care physician just diagnosed you with cancer. What will a search for a “high value” cancer doctor tell you?
Public concern over bloated and unintelligible medical bills has prompted pushback ranging from an exposé by a satirical TV show to a government edict that hospitals list their prices online. But despite widespread agreement about the importance of high-value care, information about the clinical outcomes of individual physicians, which can put cost into perspective, is scarce. Even when information about quality of care is available, it’s often unreliable, outdated, or limited in scope.
For those who are sick and scared, posting health care price tags isn’t good enough. The glaring information gap about the quality of care must be eliminated.
“When people are comparison shopping, knowing the price of something is not enough,” notes Eric Schneider, a primary care physician and senior vice president of policy and research at the Commonwealth Fund. “People want to know the quality of the goods and services they’re buying.”
Awareness about PD and its treatment and implications thereof are critical in ensuring reduced risks for this patient population. People with PD are very dependent on their medication, and timing of this medication is critical to maintaining good symptomatic control. In the outpatient setting, the main goal of medication management for these patients is to provide as much ON time as possible while minimizing side effects of the medications, such as dyskinesia. ON time describes a period of time when the medications are working and symptoms are controlled. Patients with advanced PD may have considerable difficulty with motor fluctuations if they transition from the ON state to an OFF state when the medication effect has worn off and they are symptomatic. The fine tuning of the medication regimen is pain-staking and often the result of multiple office visits and telephone calls to arrive at the best schedule customized for the patient. This can often result in seemingly unconventional timings (sometimes on the quarter after the hour) and at time q3 or even q2 intervals. Deviations from these regimens, even as little as 15 minutes delays, can have deleterious effects on patients with PD, as detailed above.
When patients with PD enter the hospital, attention is seldom paid to the exact timing of medication administration. If a patient takes a particular medication six times daily, ordering the medication six times daily in the hospital defaults to standard timings that often are different from the patients’ own regimen, causing timing errors. Almost 75% of PD patients who enter the hospital have delays in their medications and more than 60% of these patients can have complications during their hospitalization because of these delays.
The message comes in over the office slack line at 1:05 pm. There are four patients in rooms, one new, 3 patients in the waiting room. Really, not an ideal time to deal with this particular message.
“Kathy the home care nurse for Mrs. C called and said her weight yesterday was 185, today it is 194, she has +4 pitting edema, heart rate 120, BP 140/70 standing, 120/64 sitting”
I know Mrs. C well. She has severe COPD from smoking for 45 of the last 55 years. Every breath looks like an effort because it is. The worst part of it all is that Mrs. C just returned home from the hospital just days ago.
Historically, the Centers for Medicare & Medicaid Services’ (CMS) stance on the influence that social determinants of health (SDOH) have on health outcomes has been equal parts signal and noise. In April 2016, the agency announced it would begin adjusting the Medicare Advantage star ratings for dual-eligibility and other social factors. This was amid calls for increased equity in the performance determinations from the managed care industry. At the same time, CMS continued to refuse risk-adjustment for SDOH in the Hospital Readmissions Reduction Program (HRRP) despite the research supporting the influence of these factors on the HRRP.
It wasn’t until Congress interceded with the 21st Century Cures Act that CMS conceded to adjusting for dual-eligibility under the new stratified approach to determining HRRP penalties beginning in fiscal year 2019. The new methodology compares hospital readmission performance to peers within the same quintile of dual-eligible payer mix. The debate surrounding the adjustment of incentive-based performance metrics for SDOH likely is to continue, as many feel stratification is a step in the right direction, albeit a small one. And importantly, the Cures Act includes the option of direct risk-adjustment for SDOH, as deemed necessary by the Secretary of Health and Humans Services.
SDOH are defined as “the conditions in which people are born, grow, live, work and age.” The multidimensional nature of SDOH reach far beyond poverty, requiring a systemic approach to effectively moderate their effects on health outcomes. The criteria used to identify SDOH include factors that have a defined association with health, exist before the delivery of care, are not determined by the quality of care received and are not readily modifiable by health care providers.
The question of modifiability is central to the debate. In the absence of reimbursement for treating SDOH, providers lack the resources to modify health outcomes attributable to social complexities. Therefore, statistical adjustments are needed to account for differences in these complexities to ensure risk-adjusted performance comparisons of hospitals are accurate.
Today’s health care providers face the formidable challenge of delivering better, more affordable and more convenient care in the face of spiraling care costs and an epidemic of chronic disease. But the most innovative among them are making encouraging progress by “integrating”—which in this context means working across traditional boundaries between patients and clinicians, health care specialties, care sites and sectors.
The impulse to do so is shrewd, according to our innovation research in sectors from computer manufacturing to education. We’ve found that when a product isn’t yet good enough to address the needs of a particular customer segment, a company must control the entire product design and production process in order to improve it. This is necessary because in a “not-good-enough” product, unpredictable and complex interdependencies exist between components, so each component’s design depends on that of all the others.
Given this, managers responsible for the individual components must collaborate—or integrate—in order to align components’ design and assembly toward optimal performance. IBM employed an integrated strategy to improve performance of its early mainframe computers, and this enabled the firm to dominate the early computer industry when mainframes weren’t yet meeting customers’ needs.
In health care delivery, such integration is analogous to, but something more than, coordinated care. It means assembling and aligning resources and processes to deliver the right care, in the right place, at the right time. This type of integration is a core aspiration of innovative providers leading hot-spotting and aging-in-place programs, capitated primary care practices, initiatives addressing health-related social needs, and other care models that depart from America’s traditional, episodic, acute-care model. How are they tackling it? They’re leveraging very specific tools to facilitate work across boundaries. Here are six of the most common we uncovered in our research: