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Letter to Congress on Replacing ACA

Dear Majority Leader McCarthy,

I offer the following comments and recommendations in response to your letter dated Dec. 2, 2016, as the House of Representatives moves forward with the repeal of the Affordable Care Act and offers meaningful healthcare policy suggestions that place the best interests of the consumer and the market ahead of continued government marketplace meddling.

As the Oklahoma Insurance Department surveys the private individual health insurance market in Oklahoma, it is apparent that consumers, insurers and providers are in a combined state of distress. We see the expected marketplace failings, because of government intervention, of limited competition and consumer choice in both benefit plans and provider networks that have led to ever-increasing premium costs. Consumer confusion and dissatisfaction is prevalent and is shared by other marketplace stakeholders.

It is time we start thinking differently and move toward more innovative solutions that are working in other countries. We don’t know what health insurance is going to look like in 10, 15 or 30 years. We have to start putting the processes in place at the state level to allow for real innovation in this sector, one that has been totally hampered by government intervention for decades. To that end, one thing that has recently come to our attention that we think would be of interest to everyone is contained in the attached memo [at the bottom of this article] from Dr. David M. Dror, chairman of the Micro Insurance Academy and executive chairman at Social Re Consulting (pvt) Ltd. The memo focuses specifically on “health insurance to the uninsured and lessons from delivering microinsurance in low-income settings in India, Asia and Africa.” This memo is an example of innovative thinking that we need to consider for certain microsegments of the population in the U.S. We need to look for new solutions similar to microinsurance that have yet to be considered in the U.S. but that are working in other countries.

The current landscape presents us with a real opportunity to examine the principles on which we want to base our health insurance markets. For far too long, health insurance has drifted away from traditional insurance concepts (like fortuity) and has turned into a cost-sharing program instead. It is no wonder that health insurance premiums are spiraling out of control when every health insurance policy is required to pay for a very costly menu of benefits without regard to preexisting conditions. Health insurers should be allowed to underwrite for fortuitous risk and should not be forced to assume known chronic claims. Imagine how much we would pay for auto insurance if the policy was required to pay for all damage occurring over the life of the vehicle and even before the coverage was effective.

We have in front of us now a chance to reject this creeping sentiment that health insurance is an entitlement rather than an insurance product.

For the nearly 300,000 eligible Oklahomans who look to the individual market for coverage — including many of the citizens of tribal governments — Congress must take action that (a) stabilizes the marketplace for policy year 2018; (b) returns to the states the flexibility to self-determine the scope and depth of insurance coverages that best serve the citizens; and (c) restores the regulatory authority to state insurance departments that protects consumer interests and enables issuers to deliver value-based, affordable policies that best serve their constituents. 

See also: Obamacare: Where Do We Stand Today?  

A free market, grounded in fair and limited regulatory oversight — which is predicated on constitutional freedoms and rights — presents the best possibility of delivering sustainable access and affordability in this marketplace going forward. As we move forward, a properly designed policy must target improvement of health outcomes along with control of healthcare costs, reduction of administrative and regulatory burdens and advanced system sustainability.

Marketplace Stabilization

Vice President Mike Pence and Speaker of the House Paul Ryan recently discussed their intentions to have a “smooth transition” to stabilize the health market. Their approach will marry the White House’s planned executive orders with legislative approaches to stabilize the market as our country begins to repeal and/or replace the disastrous ACA. This approach, formulated and led by Congress and the White House, will be difficult. The states stand ready to do their part to ensure the transition is as smooth as possible. Promises by the federal government under the Democrats’ control have placed this country on a very dangerous path that will take time to unwind through a budget-neutral approach. Saddling this burden on the citizens without the funds to back it up is reckless and irresponsible.

There would be no more significant signal by Congress and the new administration of their intent to stabilize markets than to fulfill the payment obligations made by the federal government under the ACA Risk Corridor program utilizing any existing money to avoid deficit spending. These promised safety valve payments are not bail-outs of insolvent companies but rather the fulfillment of a promise previously made to insurers. Further stabilization initiatives for carrier participation in policy year 2018 and beyond would include an immediate fix of the Special Enrollment Period (SEP) eligibility problem using robust verification and documentation criteria and waiting periods for market re-entry; repealing ACA fees (PCORI, HIT and FFM issuer fees) that will reduce consumer premiums; and providing a clear decision on how Advanced Premium Tax Credits (APTC) and the Cost Sharing Reduction (CSR) programs will be administered under a replacement program. These initiatives will mitigate market instability and future issuer exits.

Moving Forward Initiatives:

My colleagues on the regulatory and state government side will be enumerating multiple initiatives that have been identified as important components of a replacement package. The following list represents concepts and changes I believe are essential to the repair/replace effort that Congress will undertake:

  • Permit sale of insurance across state lines under state regulatory enforcement.
  • Adopt policies that expand the use of health savings accounts coupled with more affordable high-deductible health plans.
  • Repeal the federal individual and small-employer coverage mandates. Consider a meaningful continuous coverage premium discount or a surcharge and waiting period for interrupted coverage.
  • Allow states to pursue innovative healthcare delivery mechanisms including, telemedicine and the expansion of the technologically based Project ECHO for rural America.
  • Support transparency in pricing for medical delivery like the Surgery Center of Oklahoma has done by posting prices for elective procedures on its website.
  • A federally supported but state-administered combination reinsurance and high-risk pool program that addresses the risk management challenges of high-risk enrollees.
  • Permit employers to extend transitional “grandmother” group plans beyond the planned 2017 expiration as changes to the individual market are implemented.
  • Cap monetary damages that can be awarded in medical malpractice lawsuits.
  • Repeal rules on short-term health plans that limit policy duration.
  • Replace the 90-day premium grace period with state-based grace periods.
  • Eliminate the dual regulatory scheme currently existing at the federal and state levels. Return all regulatory authority to the states.
  • Provide flexibility through state-based innovative pathways using 1115 and 1332 waivers to create affordable health insurance coverages for the uninsured.
  • Implement market-based deadlines for submission of insurance rates and forms
  • Establish a federal initiative to sunset fee-for-service reimbursement and make the transition to value-based reimbursement payments.
  • Allow states to enact new health reforms at the grade-school level that incorporate physical fitness and nutrition programs to deter preventable illnesses.
  • Let states determine the age at which a child can remain on his or her parent’s group health plan.
  • Enact legislation that protects consumers from unfair balance billing and surprise billing.
  • Provide federal support to accelerate the interoperability of electronic health records (EHR).
  • Reform FAA rules to give states authority to regulate air ambulances.
  • Acknowledge the existence of and promote the protections surrounding religious-based medical-sharing networks similar to companies like Medi-Share, where premiums are significantly more affordable in exchange for limited network access.

See also: Is the ACA Repeal Taking Shape?  

I appreciate the opportunity to provide my thoughts on moving forward and advancing meaningful healthcare public policy. As an experienced regulator and conservative leader, I understand the challenges of balancing budgets and managing deficits. I urge the House to deliver immediate changes that will stabilize the individual market for policy year 2018 and to design long-term solutions that address competition and affordability to participants in the individual market.

The following is a briefing note from Social Re Consultancy for Mr. John D. Doak, Oklahoma insurance commissioner, on health insurance to the uninsured and lessons from delivering microinsurance in low-income settings in India, Asia and Africa. 

Consumer-Friendly Healthcare Model

Best-selling Author Og Mandino once said:  “Always seek out the seed of triumph in every adversity.”

It appears that a small, yet growing number of America’s front line health providers are doing just that. Instead taking on increased risk, greater healthcare bureaucracy and more administration headaches, these medical mavericks have drawn a philosophical line in the sand.

I’m speaking of direct primary care (DPC). For the uninitiated, DPC is an emerging model where general practitioners elect to disassociate from, and no longer bill services to, health payers, including Medicare. DPC practices average between 600 and 800 total patients (vs. the national 2,300-patient average for traditional primary care provider (PCP) patient panels).

This return to front-line doctoring — “sans insurance” — translates into a cost-reduction of as much as 40% in staffing and reduced administrative complexity. Electronic health records (EHR) software finds itself replaced with lighter applications to track, schedule and bill patients. Practices may also choose to use mhealth/telehealth technology to monitor/connect with patients.

Patients in these practices are often those with low to middle incomes, with high-deductible health plans (HDHPs). For this reason, DPC doctors develop network relationships with other local medical specialists and services. The result is patients gaining access to discounted medications, imaging and labs, plus lower service fees from local specialists — all on a cash basis.

And presto! We have a true two-party care relationship, where doctors focus purely on patients, instead of blending in payers as their second healthcare customer.

The median monthly DPC fee for an adult is about $70; and fees for kids are priced between $10 and $20 per child. Many DPC practices also cap monthly family fees. Pricing is independent of pre-existing conditions and current health status and allows for more face-to-face time, as often as needed.

These practices report reducing urgent care and ER visits, plus hospital admits and re-admits. Quality and outcome data has apparently started reaching malpractice insurers, now quoting lower rates for direct vs. traditional primary care practices.

Here is where it gets sticky. DPC is rightly considered a “health service,” both by the Affordable Care Act (ACA) and by 16 states. However, under section 223(c) of the U.S. tax code, the I.R.S. wrongly considers DPC a “gap,” or secondary, health plan. Therefore, DPC is not a qualified medical expense — and fees paid by patients are not reimbursable by health savings accounts (HSAs).

Changes are in the works, per the introduction of Senate Bill 1989 – The Primary Care Enhancement Act of 2015, which would make DPC fees a part of HSAs. The bill, with strong support from the American Academy of Family Physicians, also seeks to require the Center for Medicare and Medicaid Innovation (CMMI) to create a new payment pathway for DPC as an alternative payment model (APM) in Medicare and with dual eligibles.

The plan is for DPC to show Medicare its mettle — and eventually receive a modest flat fee payment for primary care services offered by a DPC medical home. The legislation includes allowing qualified physicians who have opted out of Medicare to participate in the program. It also serves as a partnering catalyst with Medicare Advantage, in an affordable care organization (ACO)-like structure.

DPC is a disruptive “hot knife” model, whose entry is well-timed to cut through the cold stick of butter called high health costs.

Today, PCP co-pays have gone up to $45, and deductibles are sky high. Many consumers have no idea that at or around the same per-visit patient fee, DPC exists as an option. Employers are just beginning, on a larger scale, to integrate DPC with other options such as HDHPs and self-insured health coverage. Using this new model with self-insured companies makes sense, to hedge risk, lower health costs, improve outcomes and improve quality of care.

One county in North Carolina, which employed a DPC option, saved nearly $1.5 million on yearly medical expenses — on just 800 covered lives! It may surprise you that, apart from HSA standing, there are already early employer adopters who have chosen to pay the monthly DPC fees for employees themselves.

A British Medical Journal study showed patients of Washington state DPC provider Qliance coming in with 35% fewer hospitalizations, 65% fewer emergency department visits, 66% fewer specialist visits and 82% fewer surgeries. DPC benefits appear to not only reduce primary care costs, but lessen the healthcare costs and utilization outside of their practices.

Payer transparency is a significantly important strategy to the future growth and integration of DPC.

We talk about the importance of transparency in hospital pricing to patients, and for drug companies to reveal their true R&D costs. But have you ever stopped to consider the importance of transparency in how payers calculate and price plan premiums for each covered member? Just how much of the premium payment can be carved out as estimated primary care services to be received?

More than ever, healthcare consumer groups and fully insured employers should push health payers for transparency. Because I’ll bet what payers have estimated for per-person primary care usage and costs, adding in the associated patient responsibility portions (co-pays, and any applicable deductible or co-insurance fees) will be much more than an $840 yearly DPC payment.

But wait…there’s more. Don’t forget to have payers deduct an additional…let’s be conservative…1/3 of the Qliance savings percentages for the estimated care cost savings relating to carved-out estimated care outside of primary services.

Next, look at Medicare and do the same thing. But…instead of the wallets of health plan members, think federal budgets, taxpayers, subsidies, growing liabilities and the potential to hold off future tax increases.

Then look at Medicaid for the same reasons, remembering that DPC would certainly create a greater improvement of care quality than Medicaid care providers and facilities. Remember the “triple aim” — cost, outcomes and quality — and that doctors are happier.

DPC injects disruption and greater consumerism into healthcare.

Something interesting happened along the way to transforming our healthcare system. The ACA fell far short of its goals, and America’s care delivery and coverage became even less affordable for millions of employers and individual consumers.

We should know by now that improving quality and pricing for all will not come from laws — specifically, from those who force people into lower-quality Medicaid coverage, and insurance plan exchange options with punishing deductibles; in essence, giving people a broken Christmas toy with a pretty bow on it and pretending they will enjoy it.  

No matter how you dress it up, and much money you throw at it: Healthcare coverage is not the same as affordable healthcare.

In the heart of even the toughest situations, there are innately driven people who make bold, fresh choices and take stands — efforts that emphasize principles we know to be just and right, rather than gaining financially on the backs of others’ misery. My hope resides in what Lincoln called “the better angels of our nature.”

DPC offers a free-market “injection” into healthcare’s regulated pricing model. If Senate Bill 1989 or a similar law passes, it will provide individuals and companies a better chance to gain better quality, more affordable care. Unlike some DPC purists, I see a future inflow of Medicare dollars to non-enrolled DPC qualified providers as stimulating a transformation where coordinated care begins from outside of the umbrella of big medicine ownership.

Screen Shot 2016-08-08 at 3.14.32 PM

Like the plunging penguins who emulate the courageous actions of others, I believe many primary care physicians are looking for the right time to enter a DPC model. Whether that happens individually, through groups, or by strategic partnerships, is up to industry forces. It’s the beauty of filling consumer demand.

Making healthcare services, drugs and coverage affordable to consumers appears completely disconnected from the industry’s mission to improve care quality and outcomes, and lowering health “costs.”

Free market forces are what bring down consumer prices in most every market. Their introduction into U.S. healthcare will likely cause short-term fallout and financial pain within healthcare industries, but it would leave us, and future generations, with a more sustainable, stronger system. We’ve gotten to the point where healthcare bloat and unaffordability will require sacrifice from all involved.

By allowing consumer-friendly models like DPC to enter the regulated world of healthcare, perhaps slowly through the back door, we will see transformation come from within. History has repeatedly shown us that better models fueled by consumer desire rise to the top.

1 Myth, 2 Truths, 5 Hot Trends in Health IT

There is a myth out there that healthcare providers are unwilling to adopt new technology. It’s just not true. In the last few months, I have spoken to dozens of healthcare leaders at hospitals both small and large, and I am amazed at their willingness to understand and adopt technology.

Pretty much every hospital CEO, COO, CMIO or CIO I talk to believes two things:

With growing demand, rising costs and constrained supply, healthcare is facing a crisis unless providers figure out how to “do more with less.”

Technology is a key enabler. There is technology out there to help save more lives, deliver better care, reduce costs and achieve a healthier America. If a technology solution solves a real problem and has a clearly articulated return on investment (ROI), healthcare isn’t that different from any other industry, and the healthcare industry is willing to adopt that technology.

Given my conversations, here are the five biggest IT trends I see in healthcare:

1. Consumerization of the electronic health record (EHR). Love it or hate it, the EHR sits at the center of innovation. Since the passage of the HITECH Act in 2009—a $30 billion effort to transform healthcare delivery through the widespread use of EHRs—the “next generation” EHR is becoming a reality driven by three factors:

  • Providers feeling the pressure to find innovative ways to cut costs and bring more efficiency to healthcare delivery
  • The explosion of “machine-generated” healthcare data from mobile apps, wearables and sensors
  • The “operating terminal” shifting from a desktop to a smartphone/tablet, forcing providers to reimagine how patient care data is produced and consumed

The “next generation” EHR will be built around physicians’ workflows and will make it easier for them to produce and consume data. It will, of course, need to have proper controls in place to make sure data can only be accessed by the right people to ensure privacy and safety. I expect more organizations will adopt the “app store” model Kaiser pioneered so that developers can innovate on their open platform.

2. Interoperability— Lack of system interoperability has made it very hard for providers to adopt new technologies such as data mining, machine learning, image recognition, the Internet of Things and mobile. This is changing fast because:

  • HHS’s mandate for interoperability in all EHRs by 2024 means patient data can be shared across systems to enable better care at lower cost.
  • HITECH incentives and the mandate to move 50% of Medicare payments from fee-for-service to value-based alternatives by 2018 imply care coordination. Interoperability will become imperative.
  • Project Argonaut, an industry-wide effort to create a modern API and data/services sharing between the EHR and other systems using HL7 FHIR, has already made impressive progress.
  • More than 60% of the proposed Stage 3 meaningful use rules require interoperability, up from 33% in Stage 2.

3. Mobile— With more than 50% of patients using their smartphone to monitor health and more than 50% of physicians using (or wanting to use) their smartphone to monitor patient health, and with seamless data sharing on its way, the way care is delivered will truly change.

Telemedicine is showing significant gains in delivering primary care. We will continue to see more adoption of mobile-enabled services for ambulatory and specialty care in 2016 and beyond for three reasons:

  • Mobile provides “situational awareness” to all stakeholders so they can know what’s going on with a patient in an instant and can move the right resources quickly with the push of a button.
  • Mobile-enabled services radically reduce communication overhead, especially when you’re dealing with multiple situations at the same time with urgency and communication is key.
  • The services can significantly improve the patient experience and reduce operating costs. Studies have shown that remote monitoring and mobile post-discharge care can significantly reduce readmissions and unnecessary admissions.

The key hurdle here is regulatory compliance. For example, auto-dialing 9-1-1 if a phone detects a heart attack can be dangerous if not properly done. As with the EHR, mobile services have to be designed around physician workflows and must comply with regulations.

4. Big data— Healthcare has been slower than verticals such as retail to adopt big data technologies, mainly because the ROI has not been very clear to date. With more wins on both the clinical and operational sides, that’s clearly changing. Of all the technology capabilities, big data can have the greatest near-term impact on the clinical and operational sides for providers, and it will be one of the biggest trends in 2016 and beyond. Successful companies providing big data solutions will do three things right:

  • Clean up data as needed: There’s lots of data, but it’s not easy to access it, and isn’t not quite primed “or clean” for analysis. There’s only so much you can see, and you spend a lot of time cleansing before you can do any meaningful analysis.
  • Meaningful results: It’s not always hard to build predictive analytic models, but they have to translate to results that enable evidence-based decision-making.
  • Deliver ROI: There are a lot of products out there that produce 1% to 2% gains; that doesn’t necessarily justify the investment.

5. Internet of Things— While hospitals have been a bit slow in adopting IoT, three key trends will shape faster adoption:

  • Innovation in hardware components (smaller, faster CPUs at lower cost) will create cheaper, more advanced medical devices, such as a WiFi-enabled blood pressure monitor connected to the EHR for smoother patient care coordination.
  • General-purpose sensors are maturing and becoming more reliable for enterprise use.
  • Devices are becoming smart, but making them all work together is painful. It’s good to have bed sensors that talk to the nursing station, and they will become part of a top level “platform” within the hospital. More sensors also mean more data, and providers will create a “back-end platform” to collect, process and route it to the right place at the right time to can create “holistic” value propositions.

With increased regulatory and financial support, we’re on our way to making healthcare what it should be: smarter, cheaper and more effective. Providers want to do whatever it takes to cut costs and improve patient access and experience, so there are no real barriers.

Innovate and prosper!

Why Your Doctor Is Never on Time

Why is it that every time I go to a doctor, I am given an appointment for a precise time, and then every single time the doctor shows up at least 20 minutes late? Does the healthcare system hate me? Do doctors not want to fix the problem? Or are they just simply incompetent?

To dig deeper into the question, we at LeanTaaS dove into the operations of more than 50 healthcare providers this past year. We looked at resource utilization profiles at three different types of clinics – cancer infusion treatment, oncology and hematology – to understand the problem and how best to solve it.

The truth is that most healthcare providers have the patient’s interest at heart and are trying their level best. However, “optimal patient slotting” is a lot more complex than might appear on the surface – in fact, it is “googol-sized” in complexity. The good news is it’s a problem solvable with advanced data science; the sobering news is it MUST be solved if we are to handle the incoming onslaught of an increasing, aging patient population all carrying affordable insurance over the next 20 years.

The Doctor Will Be Right With You. NOT.

There are few things I take for granted in life, and waiting to see a doctor is one of them. The average wait time for a routine visit to a physician is 24 minutes. I am sure I am not the only one who has sat in a doctor’s waiting room thinking, “You said you would see me at 3:00 p.m. – why am I being called at 3:24? This happens every time; I bet you could have predicted it. So, why didn’t you just ask me to come at 3:24 instead?”

A Press Ganey study of 2.3 million patients at 10,000 sites nationwide found that a five-minute wait can drop patient satisfaction by 5%, a 10-minute wait by 10% and more than 10 minutes by 20%.

Source: http://www.pressganey.com/

 

That 24-minute stat is, in fact, not so bad compared with anyone who has had to get an infusion (chemo) treatment, visit a diabetes clinic, prepare for surgery or see just about any specialist. Those wait times can be hours.

Just visit any hospital or infusion center waiting room, and you will see the line of patients who have brought books, games and loved ones along to pass that agonizing wait time before the doctor sees them.

I spent the past year researching this problem and saw for myself just how overworked and harried nurses and doctors operating across the healthcare system are. I spoke to several nurses who have had days they were not able to take a single bathroom break. Clinics routinely keep a “missed meal metric” – how often nurses miss lunch breaks – and most of the ones I spoke to ring that bell loudly every day. I even heard of stories of nurses suing hospitals for having to go a whole day without breaks or meals.

The fact is that long patient wait times are terrible for hospitals, too. Long wait times are symptomatic of chronically inefficient “patient flow” through the system, and that has serious negative impact on the hospital’s economic bottom line and social responsibility:

  • Lower Access and Revenue: A natural corollary to long patient wait times is that the hospital sees fewer patients than it possibly could each day. The Medical Group Management Association found that the average utilization of operating rooms at large hospitals in 2013 was only 53%. Fewer patients served directly implies reduced access to care, lower revenues and higher unit costs.
  • Rising Labor Costs and Declining Nurse Satisfaction: Nurses are an expensive and scarce skill set. Because of the “peaks and valleys” caused by inefficient scheduling during the day, hospitals have to staff for the “peak” and simultaneously experience periods of low activity while still needing significant overtime hours from nurses.

Hospital leaders know this well. Every administrator I spoke to in my research – CEO / CAO / CNO – has some kind of transformation effort going on internally to improve patient flow – “lean” teams, 6-sigma teams, rules for how to schedule patients when they call into various clinics and so on. Leaders know that if patients could be scheduled perfectly and doctors could see them on time, the resulting “smoothing of patient flow” throughout the system would make their facilities, staff and the bottom line much better off.

The Real Reason

It’s not for a lack of motivation that the system is broken. It’s just a complex math problem.

The system is broken because hospitals are using a calculator, standard electronic health record (EHR) templates and a whiteboard to solve a math problem that needs a cluster of servers and data scientists to crunch.

To illustrate why scheduling is such a complex problem, let’s take the case of a mid-sized infusion (chemo) treatment center I studied during my research.

This infusion center has 33 chairs and sees approximately 70 patients a day. Infusion treatments come in different lengths (e.g., 1-2 hours, 3-4 hours and 5-plus hours long), and the typical daily mix of patients for these three types are 35 patients, 25 patients and 10 patients, respectively. The center schedules patients every 15 minutes starting at 8:00 a.m. with the last appointment offered at 5:30 p.m. So there are 39 possible starting times: 8:00 a.m., 8:15 a.m., 8:30 a.m., etc, ending at 5:30 p.m. The center can accommodate three simultaneous starts because of the nursing workload of getting a patient situated, the IV connected, etc. That makes a total of 39*3 = 117 potential “appointment start slots.”

That may not seem like a lot, but it results in 2.6 times 10 to the 61st power possible ways to schedule a typical, 70-patient day. (I’ll save you the math.) That’s 26 million million million million million million million million million million possibilities.

And that number is just the start. Now add in the reality of a hospital – some days nurse schedules are different from others, the pattern of demand for infusion services varies widely by day of week, doctors’ schedules are uneven across the week, special occurrences like clinical trials or changes in staff need to be considered and so on. You are looking at a problem that you can’t solve with simple heuristics and rules of thumb.

How Today’s “Patient-Centric” Scheduling Often Works – and Backfires

Very few hospitals I spoke to understand or consider this math. Rather, in trying to “make the patient happy,” most providers have been trained to use a “first come, first served” approach to booking appointments. Sometimes, providers use rules of thumb based on their knowledge of busy times of day or week, e.g., start long appointments in the morning and shorter ones later.

If hospitals were scheduling patients for one chair, one nurse and the same treatment type, some simple rules could work. But reality is a lot more complicated – the right schedule would need to consider varying treatment times across patients, include multiple treatment rooms/chairs, varying staff schedules, lab result availability and so on. Without sophisticated tools, there is an almost zero chance a scheduler can arrange appointments so treatment durations fall like Tetris blocks that align perfectly over the course of the day, and seamlessly absorb patients as they arrive, orchestrating doctor, nurse and room availability, while accounting for all the other constraints of the operation.

In effect, hospitals are scheduling “blind,” not taking into account the effect of appointments already scheduled before, during or soon after the slot being allotted on a first-come basis. Schedule currently is like adding traffic to rush hour and almost always results in a “triangle shaped utilization curve” – massive peaks in the middle of the day and low utilization on either side.

Typical utilization in an infusion treatment center with 63 chairs

 

Each of the 50 hospitals I spoke to identified precisely with this utilization curve. In fact, they identify with “the midday rush and slower mornings and evenings” so well that they have given them affectionate names – one called it their “Mount Everest,” another “Mount Rainier.”

From a cancer center’s standpoint, this chair utilization curve has several issues even beyond long patient wait times:

  • The center can only see a fraction of patients it could have with a “flatter” utilization curve.
  • Nurse scheduling has to be done for the peak, and the treatment center typically deals with lots of overtime issues.
  • Nurses find it hard to take lunch breaks because of the midday peak, while half the time the chairs are empty.
  • On any day, given the number of interdependent moving parts, a small perturbation to the system (e.g., a patient’s labs are late, another patient didn’t arrive on time) creates a domino effect, further exacerbating delays, not unlike a fender bender in rush hour traffic that delays everyone for hours.

In effect, when hospitals think they are scheduling in patient-centric ways, they are doing exactly the opposite.

They are promising patients what they cannot deliver – instead of giving the patient that 10:00 a.m. Wednesday appointment, an 11:40 a.m. appointment may have been much better for the patient and the whole system.

As we will see, the patient could have had a 70% shorter wait time, the hospital could have seen 20% more patients that week, every nurse could have taken a lunch break every day and a lot less (if any) overtime would have been required.

So How Do You Solve This “Googol-Sized Patient Slotting” Problem?

The solution lies in data science and mathematics, using inspiration from lean manufacturing practices pioneered by Toyota decades ago, such as push-pull models, production leveling, reducing waste and just-in-time production.

In mathematical terms, it means taking those 10^61 possibilities and imposing the right set of “constraints” – demand patterns, staffing schedules, desired breaks and whatever is unique to the hospital’s specific situation – to come up with a much tighter set of possible patient arrangements that solve for maximizing the utilization of hospital resources and therefore the number of patients seen.

In the case of the infusion center, the algorithm optimizes utilization of infusion chairs, making sure they are occupied uniformly for as much of the day as possible as opposed to the “peaks and valleys” in Figure 3. In essence, “rearranging the way the Tetris blocks (patients) come in” so they appear in the exact order they can be met by a nurse, prepped and readied for a doctor whose schedule has been incorporated into the algorithm.

The first step in doing this is mining the pattern of prior appointments to develop a realistic estimate of the volume and mix of appointment types for each day of the week.

The second step is imposing the real operational constraints in the clinic (e.g., the hours of operation, doctor and nurse schedules, the number of chairs, various “rules” that depend on clinic schedules, as well as patient-centric policies such as that treatments longer than four hours should be assigned to a bed and not a chair).

Finally, constraint-based optimization techniques can be applied to create an optimal pattern of “slots,” which reflect the number of “appointment starts” of each duration.

In the case of the infusion center, that means how many one-hour duration, three-hour duration and five-hour duration slots can be made available at each appointment time (i.e. 7:00 a,m., 7:15 a.m., 7:30 a.m. and so on).

Optimized shape of utilization curve for the same center as in Figure 1. 20% lower peak, much smoother utilization of resources, significant capacity freed

 

Doing this optimally results in moving the chair utilization graph from the “triangle that peaks somewhere between 11:00 a.m. and 2:00 p.m.” in Figure 3 to a “trapezoid that ramps up smoothly between 7:00 a.m. and 9:00 a.m., stays flat from 9:00 a.m. until 4:00 p.m. and then ramps down smoothly from 4:00 p.m. on” in Figure 4.

Coming up with realistic slots that keep patients moving smoothly throughout the day cuts patient waiting times drastically, reduces nurse overtime without eliminating breaks and keeps chair utilization as high as possible for as long as possible. Small perturbations in this system are more like a fender bender at midnight, a small annoyance that causes a few minutes of delay for a small number of people instead of holding up rush hour traffic for hours.

Smoothing Patient Flow – A Large Economic Opportunity

The above graphs are sanitized versions of real data from a cancer infusion treatment center at a real hospital that used these techniques to solve their flow problems. The results they achieved are staggering and point to the massive economic and social opportunity optimal patient flow presents.

Post implementation of a product called “LeanTaaS iQueue,” they now experience:

  • 25% higher patient volumes
  • 17% lower unit cost of service delivery
  • 31% decrease in median patient wait times
  • 50% lower nurse overtime
  • Significantly higher nurse satisfaction – no missed meals

Imagine applying this kind of performance improvement to every clinic, hospital and surgery suite in the country and the impact it will have on population health through increased patient access to the system.

The Problem Is Going to Get a Lot Worse Unless Providers Address It Now

This problem is going to get a lot worse for a simple reason – the demand for medical services has never been stronger, and it’s only going to increase. Just looking at the U.S. market:

  • Population Growth: By 2050, there will be more than 438 million Americans, up from 320 million in 2015.
  • Demographics: By 2030, more than 20% of the country is expected to be older than 65, up from 15% in 2015 – increasing the demand for chronic clinical therapies. In raw numbers, the Census Bureau estimates that by 2030, when the last round of Baby Boomers will hit retirement age, the number of Americans older than 65 will hit 71 million, up from 41 million in 2011, a 73% increase. When this happens, one in five Americans will be older than 65. Not surprisingly, by 2025, 49% of Americans will be affected by a chronic disease and need corresponding therapies.
Access to healthcare is a looming crisis – multiple drivers of significant demand growth

  • The Affordable Care Act: The Affordable Care Act will add 30 million Americans to the healthcare system by 2025. That means more demand for healthcare – more doctor visits, more hospital visits, more emergency emergency room visits and more need for resources (e.g., surgery rooms, MRI / CAT scans). Reimbursements will increasingly depend on outcomes and efficacy, quality of care and patient access. Unless providers become a lot more efficient in how they process and treat patients, they will need to spend billions in capital spending on new infrastructure – clinics, operating rooms, infusion centers and the like.
  • In an online poll conducted by the American College of Emergency Physicians (ACEP), 86% expect emergency visits to increase over the next three years. More than three-fourths (77%) say their ERs are not adequately prepared for significant increases.
  • The Commonwealth Fund, a New York-based fund that tracks healthcare performance, projects that primary care providers will see, on average, 1.34 additional office visits per week, accounting for a 3.8% increase in visits nationally. Hospital outpatient departments will see, on average, 1.2 to 11 additional visits per week, or an average increase of about 2.6% nationally.
  • It is estimated that the U.S. will face a shortage of 90,000 physicians and 500,000 nurses by 2030.

The Good News

Most healthcare providers are waking up to the fact that their operations need a data-driven, scientific overhaul much the same way as auto manufacturing, semiconductor manufacturing and all other asset-intensive, “flow”-based systems have experienced.

The good news is that there are tools, software and resources that can be used to bring about this transformation. Companies like LeanTaaS are at the forefront of this thinking and are applying complex data science algorithms to help hospitals solve these problems.

Hospitals that are serious about solving patient flow issues and the related problems now have access to the best computational minds and tools.

I see a world in which our healthcare system can see every patient on time without imposing hardship on care providers, disruption on current processes or increasing cost of services.

Here’s to that world!

Electronic Health Records Hurt Care

Patient care as we know and expect it will diminish because of electronic health records (EHR) requirements. Society will suffer a slow degradation of artful interactive provider attention in deference to “data-field” medicine.

I am not simply referring to the very real and challenging issues in the technical application of EHR systems. Rather, I point out a more serious and insidious future threat to the actual human aura in medical practice.

There exists an unintended but real incentive for doctors and clinicians to consider task-completion as clicking through the data interface rather than interacting with and treating the patient. Legal requirements, reimbursements and potential penalties force EHR to top priority. In turn, clinicians as EHR users become more aware of and anticipate the truncated, template-driven and limited means of expressing case events via electronic reports. Therefore, their interaction with patients may be truncated.

I know this sounds callous and insulting to all good medical providers. To them, I say no insult is intended, and the fault of this perverse incentive is not theirs. They might honestly assess their experience and the actions of peers and associates within their practices given the advent of EHR. To providers, I ask: What about EHR might be sucking the creative life out of your optimal vision for the practice of your specialty?

My most stark encounter with this reality comes from a chance discussion with a longtime friend. She is a nurse practitioner who, for decades, has treated both ER and family-practice patients. As family friends, we never talk shop, and this particular conversation was not solicited by me. I politely asked, “How’s it going?” and got a surprising, soul-baring burst of frustration.

She expressed disdain. She prides herself as a master of triage, symptom investigation, on-the-spot research and communication with involved family members, and she desires to take the wide approach to patient situations as a service to them and to the doctors or specialists who may eventually carry the case, but electronic records don’t allow the narratives or collective points of data she would prefer. As such, her value is diminished, and the patient ultimately gets poor attention.

As she described her situation, I began to understand the rigid decision-tree “intelligence” in narrowing prompts for information based on how case records are initiated. She has persevered and found cumbersome work-around methods (such as editing previous fields to change next options, etc.) to combine or add issues or thoughts to a record beyond the template’s desired straight line of thought. Unfortunately, she explained, taking extra time to do anything is neither advisable nor encouraged because of the volume of patients requiring care.

Quick Tip: The Want for Data Should Not Put the Cart Before the Horse

As a foreshadowing about healthcare in general, consider what the supreme focus on automation and data collection has done to workers’ compensation. I have written extensively about the advent of electronic claim systems, over decades, reducing the adjusting job from that of an intelligent, intuitive personal-interactive specialist to the current task-level data entry clerk. We are now well into the post-paper-file generation of claim adjusters who know their job only as data-interface. Will medical clinicians meet the same fate when our current generation of providers, like my friend, move on? Will future clinicians, knowing only electronic records, assume that the decision tree of the EHR interface supersedes intuitive medicine?

Let’s hope not. Unfortunately, a simple Google search for “problems with EHR” will not sit well with anyone who embarks on some research in this area.

In claim adjusting, as in medicine, we need to intelligently feed the hunger for data but rail against a perverse desire to let automation increase case volumes or assume the template is sacrosanct. I am certainly not against all the good that electronic medical records bring to the party. However, we must first let practitioners do their jobs, not let “data screen medicine” dumb down patient care.

Perhaps provider-run coalitions should dictate standards for ever-improving EHR frameworks and interfaces so their highest-quality, real-time nimble intelligence can be best captured in all patient events. I know at least one nurse practitioner who has a lot to say on that subject.