Tag Archives: hospitals

Using Strong Carrots And Sticks To Drive Health Care That Works

On a recent call with a large manufacturer, my company's team expected to describe how we develop primary care medical homes that become platforms for managing comprehensive health care clinical and financial risk. But the team on the other end of the phone beat us to it. Their remarks — that health care cost is a multi-headed monster that requires a broad array of simultaneously executed approaches — were a breath of fresh air.

They wanted to avoid approaches that don't work or are designed to accrue to a vendor's disproportionate financial advantage and focus instead on mechanisms that measurably improve health and reduce cost. Their conventional current clinic vendor wasn't onboard, philosophically or in terms of capabilities, and so wasn't getting results. They were looking for a replacement vendor that could help them drive more appropriate care, with clear rules for patients and providers.

Often we have to cajole clients into more aggressive actions: restructuring their benefits or their PBM formularies, redirecting care to high performing doctors or hospitals, direct contracting for advanced images or ambulatory surgeries, creating stronger incentives for approaches that are most likely to produce better results. But now we're finding more employers exhausted and eager to pursue out-of-the-box approaches that can drive more appropriate care and cost.

Since the end of World War II, when employers began offering health benefits to recruit and retain better employees, a tug-of-war has been waged over the rules of engagement. Employers want competitively healthy and productive work forces, but see health care as an unpredictable significant cost that must be managed. Employees may bristle at participating in risk assessments, or seeing certain doctors or working toward a healthier lifestyle. These may be seen as brazen invasions of privacy, as work overflowing into personal life, as constraints on patients' abilities to obtain quality care.

Until now, most employers have been reluctant to be too dictatorial. But the financial threats of relentlessly surging cost — 4.5 times general inflation for more than a decade — and overwhelming evidence of industry excess have been impossible to ignore, fueling a focus on using strong carrots and sticks to steer behaviors that follow what works.

This is no small task, because a profiteering health care industry has developed scores of ways to extract more money than it is entitled to. Low primary care reimbursements have translated into rushed visits, driving up specialty referrals, diagnostics, procedures and costs for complicated patients. Egregious unit pricing on drugs, devices and specialty procedures — think stents, advanced images and complex spinal surgeries — encourage delivering more unnecessary products and services. Yellow-pages provider networks give patients “choice” to unwittingly see lousy doctors who consistently produce poorer outcomes at higher episodic cost, or get care in hospitals where there are higher opportunities to experience an error or acquire an infection. Leaving all this to health plans that have, for decades, been unwilling or unable to manage these vectors or control costs is repeating a behavior while hoping for a different result.

Last year, Walmart contracted for heart, spine and transplant surgeries with six Center of Excellence health systems around the country. These organizations use salaried specialists who are more likely to diagnose and treat correctly the first time for lower overall utilization and cost. They use and share evidence-based protocols, share data and coordinate care with local providers. Walmart employees who visit these Centers pay nothing. Many large and mid-sized firms are now pursuing this design.

Jerry Reeves MD, a medical management innovator, structured an alternative health plan design for one of his clients. His plan used rules that strongly encouraged approaches that work. Employees who adhered to the rules paid about one-third less for their coverage. But the program required a commitment. Participants who signed up had to use one of eight primary care medical homes that had been established. They needed to visit within 90 days for an exam, including a biometric profile. If the medical home called to recommend visiting a nurse coach, the patient needed to do that. Patients seeing specialists needed to make sure that the specialist information came to the primary care doctor. The medical homes were structured to accommodate walk-ins, so urgent care visits in Emergency Departments were not covered until after hours. There were other rules as well.

There are rules for doctors and hospitals too. To participate in good standing, they had to develop and sign documented care plans for patients, so patients and physicians could know what to expect. They had to be able to exchange clinical information so care could be better coordinated.

Patients failing to follow any of these rules would receive “strikes,” and three strikes would land the patient in health care timeout for a year, back to the original health plan, with more choice but 35 percent more cost.

Dr. Reeves' numbers were striking. 97 percent of the group signed up for the plan, and only one person struck out. Hospital days dropped 55 percent. Advanced images dropped 35 percent. Health improved and costs plummeted.

Employers are waking up, and are tying stronger incentives to approaches that get results. On the hook for exorbitant health care costs, employers and employees are game to know who delivers value and what works. They want good care for their families without financial peril. And they want help orchestrating that process without financial conflict.

More employers are making this shift. Broad-spectrum medical management organizations see this as an opportunity to succeed by bringing health care back into balance.

This article first appeared on Care and Cost.

Choice In Health Care? A Hassle Worth The Effort

It was almost a miracle, an immediate answer to my question about the cost of an ultrasound.

“$196 including the interpretation, and we price-match if you find a better price somewhere else.”

In my eight years having a health savings account (HSA), clear, immediate information about cost has been extremely rare. Most often, “How much?” provokes the dismissive evasion of “It depends” or irritation, followed by “We have no way of knowing.”

In other instances, office personnel launch into detailed explanations about how deductibles and insurance work in an effort to convince me I don't really need to know. Another tactic is to stall: “A representative can call you with an estimated price in 3-5 days, but it will only be an estimate.” Or the sad response, accompanied by a look of pity, “So you can't afford insurance?”

When I asked a surgeon about the hospital-acquired infection rates in the hospital where he performs his operations, he had the audacity to give an annoyed don't-worry-yourself-about-such-things expression and report that “In my area of the hospital,” patients don't get infections. This contradicted my knowledge that some of his own patients had, in fact, developed infections.

Asking questions about care is a hassle, an inconvenience, and sometimes a frustrating battle against a system unfamiliar with sharing information or control. By tradition, we can't get a test without a doctor's order, we can't receive our own test until the doctor gets it first, we can't know how much things cost, and we can't refill a drug for the 100th time without getting another prescription exactly the same as the first 99.

In an environment built on layers of permission — have the pharmacist call the doctor who can call the insurance company — do-it-yourself requests aren't welcomed. Some providers seem genuinely insulted by requests for information. “How could you question my ________ (fill in the blank with abilities, record, skill, safety, intentions)?”

Choices in health care can be overwhelming. Which treatment? Which doctor? Which hospital? How much should I spend? What metric should I trust? In some ways it was easier when we had strict gatekeepers and coverage that paid for everything. Relying on mother-may-I rules assigns responsibility for everything to someone else, including the bill.

So why make the effort?

First, because 25-30% of the care we receive is unnecessary or could be handled with a less-invasive alternative. When employees of GE are told they need a heart procedure, transplant or back surgery, they have the option of an all-expenses paid trip with a family member to the Cleveland Clinic for a second opinion. In about one-quarter of the cases referred so far, the experts at Cleveland Clinic have determined the procedure isn't their best choice of care1. No matter how nice or qualified one doctor may be, he or she has a specific preference for how to treat a problem. That preference may not be the best option for every patient. Ask for a second opinion, you might get a very different answer.

Second, where we get care can drastically change the outcome. Check on sites like Leapfrog.org, healthgrades.com, or consumer reports and you will find huge differences between hospitals in the likelihood of being harmed by errors in care. As many as forty-thousand patients per day experience an error, such as infections, wrong medications, or falls, many of them life-threatening. At an estimated 180,000 fatal events per year, medical errors are the third-leading cause of death, behind heart disease and cancer2.

What we know is that almost half of all medical errors are preventable through low-cost efforts and policies. Yet, fewer than one-in-five hospitals implements the safety procedures known to work. This is one area where the worst offenders resist transparency, and hope you don't ask. Plus, it seems doctors themselves recommend a hospital based on familiarity, not outcomes3.

The differences are meaningful: go to a top-ranked hospital and you reduce your risk of a mistake by almost half4. If it is not an emergency, do your homework and choose wisely.

Lastly, there are two reasons to be concerned about the cost of care. One is a societal concern: at over 18% of GDP5, health care costs threaten to cripple our economy. Insurers do not choose their networks based on price or quality of care. So, it will be up to payers and consumers to put constraints on spending growth.

If you aren't motivated by the national economy, the second reason is our personal budget. With ever-increasing deductibles, it matters to our own pocketbooks to push back on providers whose prices far exceed others of similar quality. As more and more of us ask about cost and choose based on the best value, more providers will respond.

Perhaps slowly, things are changing.

More of us are inserting ourselves: If I have to pay for this, and it is happening to my body, I should know what it costs and what the results will be. We see self-serve examples like AnyBloodtestNow.com offering blood tests at a known price without having to see the doctor first6. Here's a good idea: bring the cholesterol results to your check-up so you can talk about them without scheduling another follow-up visit.

Also, some facilities, such as the $196-priced group mentioned at the beginning of this blog, are responding to increased price sensitivity by offering an upfront, guaranteed price. At least it eliminates one of the many unknowns we face during a medical episode. As a comparison, another preeminent facility took five days to answer my cost question for a simple ultrasound. The price? $625 for the test, and another $650 for the mandatory visit with one of their doctors. “But,” they said, “we can't be held to this price, it is only an estimate.” As you might guess, I chose the former.

It's not easy getting involved in these choices. I totally empathize and understand those who give up and simply go with the easiest option. My compliments to fellow health care explorers trying to navigate a seemingly endless list of decisions. I admire those who stick with it. It can make a difference.

This article was first posted on Altarum.org.

1 Lynch WD. Personal Communication. 2012.

2 Levine B. The Hospital Harm Factor. Patient Safety, Natural Health Blog [Internet]. 2011; 2012. Available from: http://www.jonbarron.org/article/hospital-harm-factor.

3 Morsi E, Lindenauer PK, Rothberg MB. Primary care physicians' use of publicly reported quality data in hospital referral decisions. Journal of hospital medicine : an official publication of the Society of Hospital Medicine. 2012;7(5):370-5. Epub 29 FEB 2012.

4 HealthGrades. Patient Safety Excellence Award™ 2011 [cited 2012 October 31]; Available from: http://www.healthgrades.com/ratings-and-awards/2011-patient-safety-excellence-award-announcement.

5 Martin AB, Lassman D, Washington B, Catlin A. Growth in US health spending remained slow in 2010; health share of gross domestic product was unchanged from 2009. Health Aff (Millwood). 2012;31(1):208-19. Epub 2012/01/11.

6Any Lab Test Now! 2012 [cited 2012 October 31]; Available from: http://www.anylabtestnow.com.

The Most Dangerous Place In The World

One Friday afternoon three years ago, Harvard Professor Ashish K. Jha found out his father had been taken to “one of the most dangerous places in the world.” Knowing as I do the energetic and courageous Professor Jha, I pictured a more senior version of him sky diving or climbing Mt. Katahdin. Unfortunately, the reality was far more banal, though still dangerous — Dr. Jha's father was taken to an American hospital.

The good news is Dr. Jha's father made a full recovery after only a few days in the hospital. The bad news: at least three potentially harmful errors occurred during those days. “On Saturday afternoon, he was given an infusion of a medicine intended for another patient — an infusion that was stopped only after I insisted that the nurse double-check the order,” recounts Dr. Jha. “After she realized the error, she tried to reassure me by saying, 'Don't worry, this happens all the time.'”

Indeed, Dr. Jha agrees this “happens all the time,” but it's not reassuring to him at all. In addition to being a concerned son, the professor is an expert in patient safety. He knew only too well the dangers his father faced — the legions of rampant errors, accidents and infections in hospitals throughout the United States.

The safety problem is an open secret among people in the health care industry. “When I tell this story, most of my colleagues shake their heads, but they are rarely surprised. We have come to expect such failures as a routine part of health care,” says Dr. Jha. The statistics are staggering. Each year, one in four people admitted to a hospital suffer some form of harm, and more than 500 patients per day die.

Dr. Jha has three recommendations. First, he calls for a better approach for tracking harm in the hospital. For a variety of reasons, this is not as easy as it should be.

Second, he says that hospitals need to feel the financial consequences of providing unsafe care. “A large proportion of hospitals have not adopted cheap and easy interventions that substantially reduce harm,” he points out.

Why is this? For one thing, the financial incentives aren't there. Most hospitals get paid for all the work they do, regardless of whether it helped or harmed the patient. The more they do, the more they make. There have been efforts to address this nonsensical financing system by paying hospitals for achieving the right outcomes for patients, including in the Affordable Care Act. But a recent study by Catalyst for Payment Reform found that only 11 percent of payments to hospitals or doctors are in any way dependent on good quality or safety.

Professor Jha's third recommendation is to create accountability for patient safety: “Senior health care leaders have to feel that their jobs depend on delivering safe care.” I would add another level of accountability implied but not stated in this recommendation: accountability to the American public. Hospital performance data should be publicly available to consumers, so we can choose doctors and hospitals with the best records. Hospitals that fail should lose market share. Last year, my organization, The Leapfrog Group, initiated one such effort, the Hospital Safety Score, a letter grade rating the safety of 2600 hospitals, which Dr. Jha advises us on. The Score is available to the public for free on our website or as an app, and it holds promise for driving a new market for safe care.

The Hospital Safety Score is useful to consult before you or your family members are admitted. But what should you do when you're already in the hospital and worried sick? Every hospital inpatient in America should navigate right now to this just-published AARP Magazine article and its virtual hospital room. The magazine noted features used in safer hospitals that all of us should look for in our own hospital. Among them:

  • readily available faucets with infrared lights that remind people entering the room to wash their hands when they see a patient;
  • IV poles, bed rails and faucets made with copper alloys, which prevents transmission of germs;
  • sensors that alert nurses when patients are attempting to get out of bed;
  • linen closets designed so staff can replenish supplies without having to enter the patient's room, which minimizes the spread of infection and disruption of the patient's rest.

The article also notes how safer hospitals use electronic systems for managing prescriptions — the best known way to prevent the kind of error Dr. Jha encountered during his father's hospital stay.

No doubt hospital leaders will read the AARP coverage without much surprise; all of this is well-known among clinicians and taught and studied throughout the health sciences. The premier textbook on patient safety advises most of what AARP found in its observations of excellent hospitals. Yet, too many hospitals still don't have the right precautions in place, and most consumers don't know to look for them. Until families make it clear to hospitals that safety matters to us, none of us, not even Harvard professors, can depend on safety when the ambulance arrives.

This article first appeared on Forbes.com.

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.