Tag Archives: hospitalization

Finding Actionable Provider Ratings

With the tongue-in-cheek title, “When Yelp reviews are better than hospital rating systems” Jason Beans of Rising Medical Solutions discloses the inconsistencies of standard hospital reviews. He cites a Health Affairs study that points out that traditional rating systems, those that have been relied upon in the healthcare industry for years, rarely come up with the same results for the same hospital.

Provider ratings score hospital performance in an effort to determine quality and safety in hospitals. The Health Affairs study concludes that discrepancies among provider ratings systems are likely explained by the fact that each uses its own rating methods, defines quality differently and stresses different measures of performance. Apparently, no standards for quality and safety in hospitals are available.

This raises the question of how scoring systems for rating other medical providers differ from those of hospital scoring systems. More specifically, what about those used to score provider performance in workers’ compensation?

Lest the conclusion be that all provider performance scoring systems lack credibility, it might be instructive to at least loosely compare hospital rating systems with physician scoring in workers’ compensation.

Not Similar

The conditions, methodology and approaches are significantly different. The hospital rating systems cited by Health Affairs evaluate general health in acute care settings. To measure cost, they measure an episode of care on a per diem (per day) basis for individual hospital stays, adjusted by diagnosis and procedures. Often, subjective reports are used, as well.

On the other hand, measures of quality performance in workers’ compensation are unique to the industry, and the number of measurable variables is numerous. How a medical provider acknowledges and influences distinctive industry factors along with success of the medical treatment procedures are indicators of quality performance.

Episode of Care

One major difference is that the episode of care in workers’ compensation is not per diem, but is defined by the scope of the claim. An episode of care (claim) is from the date of injury to claim closure and includes all treatment, medical providers, vendors, events and outcomes that occur during that time. An episode may or may not include hospitalization, but when it does, those costs and events are included with total claim. In other words, the episode of care is highly definable in workers’ compensation. It is broad and comprehensive.

Quality Indicators

A number of non-medical indicators found in the data reflect unique conditions in workers’ compensation that are influenced by treating providers. Measures of quality include return to work and indemnity costs, neither of which is medical treatment precisely, but is strongly influenced by the treating provider and affects the cost of the claim. Consequently, these factors must be included in evaluating performance.

Frequency and duration of treatment, as well as duration of the claim, are indicators of provider performance. Providers can contain or increase costs described by these factors. Functional outcome described in the data as disability ratings at the conclusion of the claim are also measures of treatment success.

Clinical factors and treatment processes are important quality indicators, of course, and must be included in the evaluation and scoring. Abuse of Schedule II drugs are, for example, a major cost driver in workers’ compensation. Dispensing medications is another.

Source Data

Each data-rich claim contains the information necessary to evaluate medical provider performance for workers’ compensation. Importantly, the data must be integrated from the silos of bill review, claims system and PBM (pharmacy) to achieve a comprehensive picture of the claim and medical providers’ involvement.

Workers’ compensation can be more complex than general health because it is a legal system rather than a defined benefit. Every claim has administrative aspects as well as medical assessment and treatment. It’s all in the data.

Objective Data

Scores of medical provider quality indicators can be found in workers’ compensation data. The beauty is that data describes what actually took place during the course of the claim, not what should have happened or an opinion about it. It is concrete and objective. Yelp can’t help.

A New Focus for Health Insurance: ‘Negaclaims’

Historically, the “do more, bill more” fee-for-service model of healthcare measured success by increased billings. In the fee-for-value era, we need a new framework for assessing healthcare results. Quality indicators are logical, but they are mostly geared toward measuring actions taken. We can borrow a concept from the energy sector for an additional metric.  We need a concept for removing waste and unnecessary care that could be inspired by a concept from the energy sector described in this blurb from Wikipedia for something called Negawatts.

Negawatt power  is a theoretical unit of power representing an amount of energy (measured in watts) saved. The energy saved is a direct result of energy conservation or increased energy efficiency. The term was coined by the chief scientist of the Rocky Mountain Institute and environmentalist Amory Lovins in 1989, arguing that utility customers don’t want kilowatt-hours of electricity; they want energy services such as hot showers, cold beer, lit rooms, and spinning shafts, which can come more cheaply if electricity is used more efficiently. Lovins felt an international behavioral change was necessary in order to decrease countries’ dependence on excessive amounts of energy. The concept of a negawatt could influence a behavioral change in consumers by encouraging them to think about the energy that they spend.

The healthcare parallel would be a “Negaclaim™” — i.e., an unnecessary claim avoided. This isn’t about simply denying care. Just as consumers aren’t interested in kilowatt hours, patients aren’t interested in claims — they want health restored and diseases prevented, which can be done more efficiently and effectively. When individuals are fully educated on the trade-offs associated with interventions, they generally choose the less invasive approach. A nice byproduct is that the invasive approaches are frequently more costly and medically unnecessary. The following are a few of many examples of how unnecessary care can be eliminated while improving the patient experience:

  • Day-to-day and chronic disease care: One of the key reasons Direct Primary Care (DPC) has proven itself to be the Triple Aim  leader is that a proper primary care relationship involves time spent with patients to explain trade-offs of various medical options.  Without incentives to push for “more,” DPC providers have demonstrated that they can reduce unnecessary utilization by 40-80%. By contrast, “hamster wheel” primary care has effectively turned primary care into 7-minute, drive-by appointments that leave little time to do anything but direct patients toward additional costly items, whether it’s ordering a prescription, test, hospitalization or specialist visit. In many cases, those could be avoided with a robust primary care relationship.
  • High Cost Procedures: Leah Binder wrote about what major employers such as Walmart, Loews, Pepsico and others are doing to reduce risk to their employees while also saving money, in What We Can Learn From Walmart: How Our Healthcare System Can Save Lives and Dollars. Employees found that 40% of the transplants that were recommended by local hospitals were deemed medically unnecessary by top physicians at the Mayo Clinic and other nationally renowned facilities. Employees were thrilled to avoid risky (and expensive) procedures. It also sent a great message to employees that their employer valued them enough to send them to the best medical centers in the world for second opinions.
  • End of Life: Quality of life is affected dramatically by the end-of-life decisions we make. This was outlined in How Not to Die. The system is oriented to do more even if it is at odds with quality of life. Doctors themselves recognize this when they are the patient, as described in Why Doctors Die Differently. While quality of life is the driving factor for patients and families, there is a second-order benefit that the procedures that reduce quality of life are typically very expensive.

The problem in healthcare has been that providers have incentives to do stuff because of the flawed reimbursement models that dominate our present healthcare system. Respected studies such as from the Institute of Medicine demonstrate that there is more than $750 billion in waste. PwC stated that more than half of healthcare spending is waste. Incentives have driven providers to encourage more interventions, and consumers have been led to believe that more is better even though, in many cases, less is more.

That has added a challenge for health insurers. The general perception is that health insurers reflexively deny claims (sometimes getting in trouble for that). This has resulted in health insurers having the lowest Net Promoter Score of any industry. Consumers have clearly decided that health insurers aren’t doing this for consumer benefit. Fair or not, they have concluded it’s simply for the financial health of the insurer. Clearly, health insurers need a different approach if they want to improve their image and the health of their customers while ensuring their financial viability.

One incentive that has changed revolves around the Medical Loss Ratio (see Aetna’s explanation here).  In contrast to “customer service” reps focused on claims, an investment in patient engagement can have the same or greater effect on reducing claims while qualifying as a healthcare expense. Enter patient engagement.

Patient Engagement Is the Blockbuster Drug of the Century
Leonard Kish made the case that if patient engagement was a drug, it would eclipse all blockbuster drugs before it. Kish cited results of studies showing benefit when patients were successfully engaged in their health.

Compared to those not enrolled in the study, coordinated care “patients have an 88 percent reduced risk of dying of a cardiac-related cause when enrolled within 90 days of a heart attack, compared to those not in the program.” And, clinical care teams reduced overall mortality by 76 percent and cardiac mortality by 73 percent.

Rather than reflexively denying claims and building up a mountain of ill will, insurance companies should invest resources in helping their customers get engaged in their health. Their customers would, in effect, “self-deny” their own claims.

Note that when I describe patient engagement, I’m including family members and caregivers. Did you know that families provide care valued at more than $450 billion per year  – more than our total spending on Medicare! Thus, much of what is outlined below speaks to caregivers (particularly with elderly patients), not just the patient. Having more resources/tools as a caregiver would be welcomed, as most of us have no clinical background and are thrown into a caregiving role virtually overnight.

[Disclosure: My patient relationship management company is one of the organizations providing patient engagement tools to healthcare providers, which is why I'm familiar with these examples.]

Just about every myth has been debunked about how patients of all types supposedly won’t get engaged in their health, whether it’s low-income diabetes patients, native American populations or the elderly. However, providers are largely failing in their efforts at engaging patients as they haven’t had the incentives, tools or training.  Provider-patient communications guru Stephen Wilkins points this out clearly in a few pieces.

Despite less than stellar results that Wilkins highlights, the initial attempts by providers at engaging patients are welcomed just as a muddy puddle of water in the Sahara Desert is welcomed. However, much more can be done.

Catalyzing Patient Engagement in Health Plans’ Best Interests
A wave of new requirements and challenges have crashed on top of providers. Insurers could help if they focus in the right areas and are mindful of the challenges. JAMA recently wrote a piece highlighting one facet of patient engagement — shared decision-making (SDM). Physicians aren’t going to magically take on this challenge without a change.

The brevity of visits constrains the opportunities to address these elements of SDM. Furthermore, clinicians are not adequately trained to facilitate SDM, especially eliciting patient values and preferences for treatment.

[Note: Resources to train clinicians on patient engagement are emerging. One would expect that a host of continuing education courses will emerge. One example is HIMSS (the professional association for healthIT), which released a seminal book on patient engagement.]

In the places where providers have successfully achieved the Triple Aim objectives with challenging patient populations, they have had payment aligned with outcomes. Teams were unleashed, led by doctors, to get creative about how to tackle the challenges. While doctors are vital, they use non-physicians for a substantial part of the interaction with patients. It turns out, for example, that doctors and even nurses can be less effective at effecting behavioral change in patients than non-typical care team members. Rather than being relegated to low-level tasks, medical assistants and health coaches play a vital role in the successful models. Once again, while the goal is an improved health outcome, there is a second-order benefit that being more effective lowers costs by avoiding complications, and the medical assistants and health coaches are generally paid less than doctors and nurses. Unfortunately, in a typical fee-for-service reimbursement model, these types of services typically aren’t compensated despite their impressive results.

Dr. Rob Lamberts described this problem in detail in Washington, We Have a Problem. He summarizes the conflict between people’s desires and healthcare’s flawed reimbursement framework.

This is why, I believe, any system that profits more from people with “problems” than those without is destined to collapse. Our system is opposed to the goal of every person I see: to stay healthy and stay on as few drugs, have as few procedures, and avoid as many doctors (and drug companies) as possible.

Health insurers have implicitly viewed their customers as adversaries by creating a claim-denying framework as the default. The smart health plans will figure out how to harness the consumer goals. This isn’t some fanciful dream as it has been demonstrated (profitably, I might add) by the physician-entrepreneur organizations outlined in The Hot Spotters Sequel: Population Health Heroes.

This isn’t about minor tweaks to a fundamentally flawed model. Rather, as one physician-entrepreneur put it, too many models are “putting wings on cars and calling them airplanes.” Rather, it’s supporting proven models where they have rethought care delivery – here’s how one physician-entrepreneur describes rethinking care delivery from the ground up (video).

While financial rewards are important, most physicians are not motivated primarily by money but by autonomy, mastery and purpose. In the successful models, the physician-entrepreneurs created their own autonomy and recognized that the focus of their mastery and purpose had to fundamentally shift. A nice byproduct was the growth of “Negaclaims” as the educated and empowered patients better understood the significant risks of overtreatment and errors.

Too frequently, health plans have tried to micromanage clinical processes. With proper financial incentives combined with a move toward enabling clinical teams to become masters at driving patient engagement, the health plan is much more likely to achieve the desired outcomes. As the Stephen Wilkins pieces referenced above illustrate, clinicians haven’t been trained or rewarded directly or indirectly for encouraging patient engagement. It should be no surprise that most haven’t achieved mastery in helping their patients achieve patient engagement. Instead, the language of medicine has been punitive and demeaning, talking about “non-compliant” patients as though they were petulant criminals. That doesn’t further the partnership between patients and their care teams, which is necessary for optimal outcomes.

Previously, I outlined the strong business case for patient engagement. Those who have understood that business case have moved on to practice the 7 habits of highly patient-centric providers. It’s clear that past efforts by health plans to reduce claims have fallen short and created ill will and sub-optimal health outcomes. Putting the patient/member at the center need not be a marketing gimmick. Rather, it’s central to the notion of “Negaclaims” and to a winning strategy in the fee-for-value era.

Medicare Implements Value-Based Purchasing

aka Medicare Tries Some New Carrots and Sticks!

Effective October 1, 2012 Medicare is rolling out its new incentive program for hospitals where 1% of hospital payments are withheld by Medicare in a “pay for performance” or P4P program, with incentives paid out based upon performance against 20 quality metrics. Seventy percent of a hospital’s score will be based on 12 specific measures based upon performance to guidelines and protocols. The remaining 30 percent of a hospital’s value-based purchasing payment will be based on how it scored on random surveys of patients following discharge. These questions include ones asking how well their doctors and nurses communicated, whether rooms were clean and quiet and whether pain was dealt with promptly. Overall this is expected to redistribute nearly $1 billion among hospitals serving Medicare patients. These payments are funded by the 1% hospital withhold.

In addition, Medicare is also assessing a penalty to more than 2,200 hospitals with higher than average readmission rates. Hospitals with the highest rates for heart attack, heart failure and pneumonia patients will lose 1 percent of their regular reimbursements. This is expected to result in almost $300 million of savings. The penalty grows to 3% by October 2015.

This activity is a new step for Medicare. Before now its pay for performance programs were limited to those voluntarily participating in various programs. The new programs are mandatory for most acute care hospitals.

So what does this mean for the consumer? Is this a good things or a bad thing? Many are fearful that the government is starting to seriously meddle with their opportunity to get good health care. Some fear that hospitals are going to be pushing people out of the hospital too soon. Some are afraid that hospitals are going to be motivated more by the money than by what is right.

As a health care consultant who has practiced in this area for most of my 41+ year career, I am pleased to say I am more encouraged about this initiative than discouraged. This effort is a net positive to our quality of care. Here are some of my comments and reactions:

  • Quality of care can readily be measured and compared to evidence-based clinical guidelines: The P4P program implemented by the government includes both specific clinical measures and direct patient surveys. It’s not just based upon the numbers, but includes both measurable performance criteria and actual patient experiences. Today our firm’s studies show that a significant portion of inpatient care historically reimbursed by Medicare is potentially avoidable. Longer than needed hospital stays generally reduce the quality of care and create a significant opportunity to acquire hospital based infections (e.g., MRSA) or perhaps even incur an injury or accident while hospitalized. The bottom line — hospitals should not be a desired place to be unless you are getting needed care only available in a hospital. One physician once stated, “hospitalization is a bad outcome of ambulatory care”.
  • Behavior follows reimbursement: As hospitals are motivated to perform better they will find a way to accomplish that. As with most businesses, when held accountable they will perform. In the past, performance wasn’t a high priority and our results demonstrate that quite nicely. Hospitals for the most part have been paid on a fee-for-service basis, getting more for doing more.
  • Incentives have to be meaningful: I am concerned that the 1% withhold will not have an adequate impact on the performance change. One percent falls into the “rounding” category. Until more meaningful the performance change will not be adequate. Our studies suggest that as much as 35% – 45% of today’s Medicare hospital days are potentially avoidable. Until we see the chance for major improvement we are still only impacting the edges of our opportunity.
  • Redo’s are unacceptable: Readmission for particular conditions are evidence that the previous admission ended poorly. Sometimes patients are not appropriately treated or diagnosed and more work is required. Early discharge when care is not completed appropriately is a sign of bad quality. Early or prompt discharge when care is completed is a sign of good quality. Lengths of stay are generally too long or excessive on the average, not on every patient. However, you have to identify which patients can be discharged on a timely basis. Statistics show that as much as half of Medicare patients fall into a category known as the “uncomplicated” patient, a patient that can match ideal performance and medical criteria. The other half of the patients require additional care because of delayed recovery and other complications. The high quality institution will monitor and measure this and keep those needing longer stays and discharge those which no longer need care without delay. This incentive program is a good thing and those hospitals not appropriately discharging their patients need to be held accountable. Kudos to Medicare for this bold step.
  • “Early” might not be “too early”: Many times individuals complain that someone was discharged too early. In reality the standard many patients and family members use to determine this is flawed. It might be earlier than what someone else experienced, but it doesn’t necessarily mean it is too early. Timely is important. Health care resources are scarce and we should only use them when appropriate. An extra day here and an extra day there adds up to significant waste. The average net charge per day in my region is close to $4,500. Is it really worth $4,500 to stay in a setting that is really not much better than a not-so-fancy hotel? Evidence based clinical criteria helps everyone understand when a patient is appropriately progressing towards discharge. When built on the most efficient path, with monitoring for indications that complications are necessary which might require additional days, patients are more appropriately discharged. As a result, costs go down, patients experience higher quality, and re-admits are reduced.

Medicare has introduced some useful and very helpful tools to improve our health care system. The private sector is already using many of these tools and will model more after these programs. Hopefully this will provide an improved foundation to make even more improvements to our health care system.