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Category: Hospitals

Bridget Duffy: Improving the patient experience

Bridget Duffy, the CMO of communications tech company Vocera & head of its Experience Innovation Network, is a national leader in the patient experience movement. And we all agree there are lots of improvements needed in the experience for both patients and front line clinicians. Anyone following the story about the death of my friend Jess Jacobs last year knows that there are problems a plenty in how patients are treated (pun intended). Bridget talked with me at HIMSS17 about how well we’ve done and how far we have to go.

The Levers We Have at Our Disposal to Reduce Spending on High Cost Claimants

CindySweb

A new report out from the American Health Policy Institute and Leavitt Partners further quantifies what we already know: a handful of employees are responsible for the bulk of employers’ health care spending. The new report documented that among 26 large employers, 1.2 percent of employees are high cost claimants who comprise 31 percent of total health care spending. Interestingly enough, the report was released on the heels of news yet again that high deductible health plans continue to be more popular than ever as a strategy for employers to control costs, with employee cost sharing expected to rise yet again this year.

And yet high deductible health plans may do more to bend the cost trend for healthy employees by reducing spending on items like pharmaceuticals and lab testing but not on inpatient care.

The least heathy employees quickly blow through their deductible, and their health issues are so acute and their bills so large, they don’t shop around for care. So what is a large employer or any purchaser concerned about these high cost claimants to do?

Consumerism in how we typically think of the concept doesn’t seem to be working.  For example, according to McKinsey,most healthcare consumers are not doing their homework – they aren’t researching costs or their choice of providers. And even for the handful that do use price transparency tools, new research shows this doesn’t result in savings. It’s not that patients with serious health conditions don’t want to understand their condition, the latest evidence-based treatment options, who are the best physicians, and treatment costs. It’s just that they need assistance curating and interpreting this complex information.Continue reading…

Why Customer-Centricity Doesn’t Matter As Much As You Think It Does

flying cadeuciiCustomer centricity has been a mantra of managed care organizations for well over a decade. If you listen closely, you can hear plaintive cries of our care providers, lamenting the labyrinthine, almost Kafka-esque system of prior authorization, reimbursement, meaningful use, and near-real-time obsolescence of medical technology. The crushing weight of reform, the perverted incentives created by volume-based reimbursement, and the soaring costs of doing business have created a situation, much like in public education, where our system is fueled primarily by the power of a dedicated and passionate community whose members are motivated by their desire to care for other human beings.

“How can we possibly think about self-service websites when we are holding back an imploding healthcare delivery system”. Maybe we need to ask a more basic question…..is the U.S. healthcare system viable in the long-term? That question might simply be too hard to answer. So instead, we try to convince ourselves that, like educating our citizens, delivering medical care should be treated as a business. Innovation and value are fueled by financial incentives and healthcare is no different.

But it is different. It is very different.

In some particularly competitive/ wealthy markets, Providers are offering differentiated services….delivery rooms with hotel-style amenities, upgraded menus, concierge services, etc., usually available for an extra charge. But these services are not adding to anyone’s bottom line…they are just attracting those few patients who have the luxury of choice. Where is the value here?

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Risk Adjustment Gone Wrong

The Affordable Care Act was intended to usher in a new era of competition and choice in health insurance, and at first it succeeded. But increasingly, provisions in the law are undermining competition and wiping out start-up after start-up. If something isn’t done soon, the vast majority of new insurers formed in the wake of the ACA will fail, and many old-line insurers that took the opportunity to expand and compete in the new markets will leave. It’s a classic story of unintended consequences and the difficulties of regulation.

Flush with optimism after the ACA passed, dozens of new insurers formed to take advantage of the environment created by the law. Twenty three of these were co-ops given start-up funding by the ACA. In most states the new plans only grabbed a small share of the market, but enough to put pricing pressure on larger incumbent plans. In a few states, like New York, the start-ups and other new entrants grabbed over half of the business on the exchanges.

To the surprise of many, price increases in health insurance remained low by US historical standards even as the recovery continued and people who had been without insurance were finally able to get it. How much of that modest cost trend is due to an improved competitive marketplace on the exchanges is speculation, but what is clear is that the doomsayers about the ACA were wrong. Costs did not explode, and even with higher 2016 rate increases we are not back to the bad old days (yet).

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So Much Talk, So Little Walk on Quality

Ceci ConnollyQuality is all the rage in health care these days. It rolls off the presidential tongue and is at the heart of robust targets set by  Health and Human Services Secretary Sylvia Burwell. (No less than half of all Medicare payments to be quality based by the end of 2018!)

“We’re moving Medicare toward a payment model that rewards quality of care instead of quantity of care,” President Obama declared at a March 2015 summit dedicated to alternative payment models that move away from volume-based, fee-for-service payment

Industry is on the rhetorical bandwagon too. A quick search for the word quality on THCB turns up 277 entries – including “Zen and the Quest for Quality,” “An F for Quality” and the very earliest entry dated Aug. 18, 2003, “Performance-based pay in health care?”

Don’t get me wrong.  We at the Alliance of Community Health Plans (ACHP) were into quality way before quality was cool. (We were there at the creation of today’s HEDIS quality measures.)  So perhaps that’s why it’s a little disheartening to see policymakers slow to match the speeches  with action by fixing a glitch in the pay-for-quality movement.

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All Risk is Local

flying cadeuciiWe all knew how this was going to go, or thought we did.   Fee-for-service payment for health services was going to disappear, and be replaced by population health risk-based payment (or as some term it, “capitation”- fixed payment for each enrolled life).  Hospitals and care systems invested substantial time and dollars building capacity to manage the health of populations, yet many are discovering a shortage of actual revenues for this complex new activity.  Was population health a mirage, or an actual opportunity for hospitals, physicians and health systems?   

The historic health reform law passed by Congress and signed by President Obama in March, 2010 was widely expected to catalyze a shift in healthcare payment from “volume to value” through multiple policy changes.  The Affordable Care Act’s new health exchanges were going to double or triple the individual health insurance market, channeling tens of millions of new lives into new “narrow network” insurance products expected to evolve rapidly into full risk contracts.   

In addition, the Medicare Accountable Care Organization (ACO) program created by ACA would succeed in reducing costs and quickly scale up to cover the entire non-Medicare Advantage population of beneficiaries (currently about 70% of current enrollees) and transition provider payment from one-sided to global/population based risk.   Finally, seeking to avoid the looming “Cadillac tax”  created by ACA, larger employers would convert their group health plans to defined contribution models to cap their health cost liability, and channel tens of millions of their employees into private exchanges which would, in turn, push them into at-risk narrow networks organized around specific provider systems. 

Three Surprising Developments

Well, guess what?   It is entirely possible that none of these things may actually come to pass or at least not to the degree and pace predicted.  At the end of 2015, a grand total of 8.8 million people had actually paid the premiums for public exchange products, far short of the expected 21 million lives for 2016.  As few as half this number may have been previously uninsured.   It remains to be seen how many of the 12.7 million who enrolled in 2016’s enrollment cycle will actually pay their premiums, but the likely answer is around ten million.    Public exchange enrollment has been a disappointment thus far, largely because the plans have been unattractive to those not eligible for federal subsidy. 

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A Bill You Can Understand: One Page, One Line, One Price

At the recent Health Datapalooza conferenceSylvia Burwell, the HHS Secretary announced a new initiative, A Bill you Can Understand, :

a challenge to encourage health care organizations, designers, developers, digital tech companies and other innovators to design a medical bill that’s simpler, cleaner, and easier for patients to understand, and to improve patients’ experience of the overall medical billing process.

This is a laudable if perhaps slightly misdirected effort.

Why are we looking to create an extra layer of service to explain a very poor function, which will inevitably increase system costs? Because this is healthcare’s typical way of adding more layers and costs to an already bloated system, instead of fixing the underlying problem.

When you buy a car do you receive separate bills for the labor, motor, body, tires, glass, oil and gas, carpet, electronics, air conditioning?  I know, there are a few lines – base price, options, transportation fees, dealer fees – but it’s just a few and there are not multiple bills coming from all the components.

Furthermore, this simplification greatly reduces the number of people and systems that a dealer and its suppliers need to staff for the billing and collection process.

What healthcare needs is to simplify and combine the entire billing process and function. We need to bundle pricing that is all-inclusive in advance, just like everything else we buy.

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How Big Is Too Big?

Screen Shot 2016-05-20 at 8.38.33 AMWith healthcare mergers now announced seemingly every week, I’ve been giving some thought to scale:  How big can/ should health systems be?

Anecdotally, I’m struck that the most impressive healthcare companies in America are super- regional players:  Geissinger, Cleveland Clinic, UPMC, etc.  They seem to get a lot more attention than the national players with hundreds of facilities.

Leaving aside questions like strategy (e.g. is integration of payers/doctors/hospitals the key to these successes), I’ve wondered whether regional systems are simply the right size to thrive.  My suspicion is that even clever organizational structure (a topic which I wrote about last year) can’t overcome barriers that prevent large healthcare companies from innovating and thriving, particularly as companies move to risk and the business of healthcare becomes more complex. Like cellular organisms, large companies can outgrow their life support. (Interestingly, it’s actually the ratio of body volume to surface area [gas exchange, digestion, etc] that served as a constraint to organism size…)

I recently ran across a superb paper-  a doctoral thesis written by Staffan Canback.  Canback (who now leads the Economist Intelligence/ Canback predictive analytics consulting firm in Boston) wrote his thesis, called Limits of Firm Size: An Inquiry into Diseconomies of Scale in 2000, while a student in London. Canback argues, convincingly, that companies do become more efficient with scale, but reach a point where “diseconomies” begin to mitigate performance.  This may seem intuitive: (as Canback notes, if efficiency only improved with scale then we would buy everything from one company that produces everything with great levels of efficiency).  We don’t.

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Actually, Medical Errors are the Leading Cause of Death

flying cadeuciiJosef Stalin famously said: one death is a tragedy; one million is a statistic. Perhaps 250, 000 preventable deaths from medical errors, according to an analysis by Makary and Daniel in the BMJ, maketh a Stalin.

The problem with Makary’s analysis, which also concluded that medical errors are the third leading cause of death, isn’t the method. Yes, the method is shaky. It projects medical errors from a series of thirty five patients to a country of 320 million, which is like deciding national spice tolerance on what my family eats for dinner.

The problem with Makary’s analysis isn’t that it is full of assumptions. Assumptions are inevitable in biomedical research, and abundant in health services research. Researchers of medical errors must determine whether a bad patient outcome, such as death, was avoidable. Bad outcomes lie in a spectrum between inevitability and preventability. If every death is inevitable doctors are rendered impotent, and if every death is avoidable doctors are rendered omnipotent (FWIW, I prefer omnipotence).

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Check Your 2015 Open Payments Data

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The Centers for Medicare & Medicaid Services’ continues to publish data from applicable manufacturers and group purchasing organizations (GPOs) about payments they make to physicians and teaching hospitals on its website. We’re pleased that the public has searched Open Payments data more than 6.3 million times. Doctors, teaching hospitals and others receiving payments or other transfers of value that are sent to us from reporting entities, should take steps to ensure that this information about you, your related research, ownership, and other financial concerns are accurate.

Doctors and teaching hospitals have the chance to review and dispute the information shared about them before we post the new and updated Open Payments data on June 30, 2016. The data we post on June 30th is now available for review through May 15, 2016. Since April 1, this is the only chance for these health care providers to dispute inaccurate or incomplete data before we post it. After that they only have until the end of the year that this financial data is published to review and dispute any payment records and how it was attributed from GPOs, drug and device manufacturers.

Any doctor or teaching hospital that wants to look at the financial information reported on them by manufacturers and GPOs can register on the Open Payments website to create an account or log if they already have an account. Visit our website for instructions and quick tips.

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