The Daily Beat

What you should care about in healthcare today, from the editors of Becker's Hospital Review

Aligning Physicians Around Lowering the Cost of Care: UPMC's Approach

Americans spent roughly $2.9 trillion dollars on healthcare last year, roughly 18 percent of our nation's gross domestic product. By 2022, that figure is expected to rise to 19.9 percent, according to Health Affairs. Without significant spending reductions — which will only come from significant changes to how care is delivered — healthcare in America will become unsustainable.

This call to action is one heard many times throughout the healthcare world, and, in response, organizations across the country are rethinking how they deliver care to reduce their cost structures and eliminate unnecessary or inappropriate care.

Yet, it's not health system or insurance executives who will be key to bringing about these changes. Instead, it's the practicing physicians treating patients each day that hold the power of large-scale change. If each physician in an organization practices evidence-based care, and has access to information that allows him or her to coordinate that care, the savings — not to mention quality improvement — will ripple throughout the organization.

That is exactly the scenario Pittsburgh-based UPMC is working toward. The explosion of medical technology, including devices and drugs, as well as an aging population, has driven up the costs of care over time, says Steven Shapiro, MD, chief medical and scientific officer at UPMC and president of the Physician Services Division.

And while these advances have certainly led to extended and better quality of life for many people, their use must be closely monitored to ensure it's effective in today's value-based world.

Evidence-based care pathways
So how does UPMC monitor care delivery? In addition to physician "report cards" that track patient outcomes and costs for various procedures and conditions, UPMC physicians have developed numerous care pathways intended to help improve adherence to evidence-based medicine.

The care pathways are developed in two ways: For some, system leadership directs efforts to ensure that the most common and costly conditions are having pathways developed for them. In other cases, physicians within a service line have come together to develop a pathway in more of a "grassroots" approach.

UMPC has even commercialized its cancer care pathways, creating subsidiary Via Oncology to market its Web-based cancer pathway solution for oncologists. Dr. Shapiro says a product for pathways within the cardiac suite is also in the works.

These commercialization efforts reflect UPMC's goal of shifting up to a quarter of its revenue from non-traditional sources, or the system's patient care and health plan revenues.

Physicians can no longer ignore cost
While outcomes take highest priority, cost is also a consideration. Care pathways reduce duplication and other unnecessary care caused by a lack of adherence to evidence-based practices.

Encouraging physicians to consider cost of care is critical under value-based care.

"The most subtle, most profound part of healthcare reform is the movement of more cost on to the patient it. You can't avoid talking about cost," says Mr. Shapiro.


Plan Design, Cost Sharing and Beyond: The Next Frontier of Healthcare Cost Containment for Employers

Employers have been largely responsible for the healthcare coverage of Americans since World War II, when employers starting paying for healthcare coverage as a means of supplementing workers beyond wage limits.

Yet, in recent years, this historical benefit has become more and more costly for employers, with U. S. employers spending approximately $9,560 per employee in 2014, according to Towers Watson. As a result, in the last decade, employers have been using a few tactics to rein in growing healthcare spending.

According to Shawn Leavitt, senior vice president of global benefits at Comcast NBCUniversal, employers have adjusted plan design, implemented health and wellbeing programs and, most recently, relied on increasing cost sharing, to contain costs. They haven’t, however, focused much attention to reducing the waste in care delivery.

Waste employers can target include unnecessary and duplicative services, but also services that are provided at a higher-cost site of care than necessary. Mr. Leavitt, speaking at the 11th Annual World Health Care Congress in National Harbor, Md., on April 8th, explained that employers have a “huge opportunity to think about ‘how do we take all the unnecessary services, all the unnecessary care out of the system?’

“That’s where the big dollars are,” he added.


The Doctor Will Email You Now

Last year, physicians at Oakland, Calif.-based Kaiser Permanente received approximately 13 million secure emails from patients.

That number is more than the number of visits to Kaiser clinics for the year, said Megan Zimmerman, chief of staff for health plan business technology solutions and services at Kaiser Foundation Health Plan, at the 11th Annual World Health Care Congress in National Harbor, Md., on Monday.

3 challenges arise from the increase in patient-provider email communication
What does this mean for providers and health systems? It suggests patients are ready and eager for a new, more convenient form of communication with physicians. It also means new workflow challenges, and reimbursement issues.

Each physician handles email responses in their own way. For some, they respond directly and almost immediately on their mobile devices. For others, the emails may flow through medical assistants, registered nurses, nurse practitioners or others, and may never reach the physician unless absolutely necessary.

As the number of emails providers receive grows, they will need to adjust their workflows to accommodate the increasing number of responses required. Will they be able to manage responses on their own? How should emails be triaged and by whom? Should health systems and large practices standardize work flows around emails or leave it to individuals providers to devise the best systems for them?


ICD-10: The Epitome of U.S. Healthcare Dysfunction

This month, President Obama signed a piece of legislation that delayed a menu of healthcare policies. The law put off Medicare's sustainable growth rate cuts to physicians, and it also gave hospitals extra time for the two-midnight rule.

But the most interesting delay stems from one minuscule sentence on page eight of that law: "The Secretary of Health and Human Services may not, prior to Oct. 1, 2015, adopt ICD-10 code sets as the standard for code sets."

That's right. For the second time in two years, ICD-10 has been pushed back. What makes this delay most significant is the fact CMS reiterated time and time again that another delay will not happen, which in turn led many providers to move ahead, full force, to adopting it.


Hospitals Claim They Provide High-Value Care — But Opposed to What?

The term "high-value care" has become a staple in most healthcare conversations, but also many hospitals' marketing campaigns. Shouldn't high-value care be an implicit part of any healthcare organization? And what's more, how can consumers ever know the difference?

Before going further, it's interesting to take stock of high-value care's place in healthcare marketing and promotion. It's not often you see hotels advertising rodent-free rooms, banks plugging fraud-free credit cards or airlines touting their low crash rates. The mere mention of these violations of trust would taint consumer perception and possibly raise suspicion, a classic case of "the lady doth protest too much, methinks."

But many hospitals and health systems promote their services as "high-value," as if this somehow puts them above the sea of hospitals that aspire to deliver no-, low- or mid-value care. Aside from my coverage of healthcare fraud and abuse, I have yet to encounter a healthcare organization with such offensively modest goals. Though some may miss the mark on value, I'm not so sure it's a widespread aspiration to do so.

The definition of value, in this post at least, is that it equals quality (outcomes and safety) divided by cost. It's a simple definition, but tricky in that it's intangible, at least in the immediate sense. This is another reason it needs to be reigned in its use with consumers: They have a hard time identifying the value of their care. It's not perceptible.

You can see a rat in your hotel room, fraud on your credit card and, unfortunately, you can track plane crashes. But for the average consumer to "bust" their physician visit or medical procedure as low-value? It seems far-fetched. It's reasonable to assume many patients undergoing a blood test, CT scan or other procedure don't have the medical or economical expertise to determine whether this service is worth the money.


What Skills Are Needed of Healthcare Leaders in an Era of Value-Based Care?

In previous decades, hospital performance was based largely on volume. Leaders kept an eye on revenue and expenses, engaged in physician relations to ensure cases continued to be referred to the hospital, and left quality mostly to its medical staff, with some guidance by chief quality or nursing officers.

Today, we are starting to see the metrics of success shift, and in the future they are likely to be markedly different. To start, as providers take on risk, volume will be the enemy. That is, while providers will work to oversee care for large populations of patients, they won't want them in the hospital or ER. Instead, care will need to provided at the lowest-cost site of care, be it a physician's office or the home, to keep costs down.

When the overarching metrics of an organization move from fairly straightforward, cost vs. revenue goals, to more complex goals of keeping a population healthy and properly pricing risk-based contracts and products, leadership requirements change.

In response to this, the American College of Healthcare Executives plans to study the skills needed for successful leadership in this new era, a project which it announced it would undertake at last week's ACHE Congress on Healthcare Leadership, which took place in Chicago.

Why more information is needed
The ACHE is smart to explore the changing leadership requirements for healthcare executives, especially as it recently announced hospital CEO turnover hit a record high in 2013, with 20 percent of top executives leaving their roles.

Further, recent research suggests that the number of healthcare leaders with performance that is categorized as "struggling" is on the rise.

Given this, the ACHE's decision to provide additional guidance on which skills and traits are correlated with leadership success will be very important to ensuring the industry is developing a cadre of future leaders ready to take on the challenges ahead.

Skills expected to top the list
The ACHE's announcement got me thinking about which skills and characteristics would appear on the list. In attempt to explore this, I asked a two healthcare leaders their thoughts, which led to the following list. While ACHE's much more extensive project will provide greater insight, here are a few skills critical for leaders in a new era of healthcare leadership:


8 Critical Traits for a Successful Affiliation, Collaboration

As healthcare providers look to adapt to the changing and challenging environment ahead, many are partnering with others to tackle issues together. However, not all collaborations are successful. What distinguishes those that succeed from those that fail? finding-allies-3d-300

Mike Leavitt, former three-term governor of Utah and HHS Secretary, explores this question in his new book, "Finding Allies, Building Alliances." The book, which Gov. Leavitt wrote along with former Chief of Staff Rich McKeown, who now serves as CEO of his consulting firm Leavitt Partners, proposes eight key elements required for the success of any sort of collaborative network.


Are Affiliations Sustainable, or Simply a Stepping Stone Toward Full Integration?

The clinical affiliation. A partnership that allows two (or more) organizations to share expertise and resources, while each maintaining their own governance, board and brand.

For hospital boards that aren't willing to give up their independence, the clinical affiliation is an attractive relationship. A smaller, not quite struggling, but perhaps less prestigious facility in a market partners with a larger one with a bit more brand recognition. Recently, Silver Cross Hospital in New Lenox, Ill., announced a clinical affiliation agreement with Advocate Health Care. And, Princeton (W.Va.) Community Hospital approved a clinical affiliation agreement with Charleston (W.Va.) Area Medical Center.

While clinical affiliations certainly provide the opportunity for the two parties to work together to improve care and share resources, are they sustainable over the long term?

No, according to some healthcare leaders I spoke to informally about the subject. One remarked there was "no question" most weak affiliations would lead to deeper affiliations over the years ahead.

Why? Because the reimbursement models are industry is moving toward will force full integration. Bundled payments, for example, can be paid out to an organization that then divides payment among the hospital for its facility fee, an independent physician group, anesthesia group, etc. However, such an approach is rather inefficient, and difficult to set up in the first place as it requires all parties to agree on their share of the total payment.

As providers work to reduce costs and improve quality, what we already know will become even clearer: There are just too many cost structures to support in our industry (think: physicians, facilities, payers, etc.).

The bottom line
True integration works best if the bottom line is shared by all. Just imagine the efficiency. We see this, of course, already, in organizations like Kaiser Permanente, where physicians, facilities and insurance arms aren't separate, but part of a single larger organization — and it's performance.


6 Questions to Evaluate Population Health Initiatives

As health systems increasingly work to take on responsibility for the health of a population, leaders must determine how to allocate resources to programs which have the most impact on the population’s health. While a community health needs assessment helps identify the most significant health problems, the specific programs that will best improve these health issues may be more difficult to select.

This doesn’t have to be the case, said Ann Scheck McAlearney, ScD, professor of family medicine and vice chair of research at the Ohio State University, in a session at the American College of Healthcare Executives' 57th Congress on Healthcare Leadership. Dr. McAlearney discussed a number of resources available on the effectiveness of various population, public and community health interventions – including “The Guide to Community Preventive Services”- to select the best intervention for your population, given the health system and community’s resources.

Dr. McAlearney encouraged leaders to use “data to select among the programs.” Leaders should first consult effectiveness data to narrow down potential interventions. Then, they must consider their desired outcomes and current resources to select among those interventions. For example, if a health system’s CHNA identified diabetes, particularly among the African American population, as a heath concern, the health system might consider the following interventions: partner with local church on a diabetes education program, contract with a commercial payer to gain funding to hire a diabetes care coordinator, develop a volunteer-based diabetes health educator program.

Which of the three would provide the best ROI (lowest cost, biggest reduction in diabetes and related costs)?


The Real Reason American Healthcare Struggles, And What to Do About It

At the American College of Healthcare Executives' 57th Congress on Healthcare Leadership, Susan Dentzer, senior policy advisor at the Robert Wood Johnson Foundation, asked attendees to imagine a country with an economy about the size of France, with $2.8 trillion in gross product. In this country, life expectancy is below that of the world’s 28 richest countries. Eighty percent of adults are expected to be overweight or obese in six years. As people become ill, they are treated with "medical care," but up to half of that care has no evidence behind it to suggest it works. And, one of the top 10 causes of death — and by some estimates, the top 3 — is due to adverse events that occur as patients receive medical care.

What is this country? "The United States of Healthcare," said Ms. Dentzer, and it is ripe for transformation. America's healthcare system is in need of transformation — one that leads to a healthier population, higher quality care and lower costs.

What will it take to get there, and what roles with hospitals and health systems play? To answer those questions, Mr. Dentzer said we should examine another question: Why is our country is so far behind others? The answer, she says, is something that isn't a mystery.

"Other countries have a much higher ratio of social spending to healthcare [spending]; we are the outlier," she said.

According to the Institute of Medicine and others who have studied factors that determine population health, the areas where hospitals focus a great deal of their efforts (counseling, education and clinical interventions) have a relatively small impact on community health.

A recent IOM workshop report on population health uses the community-wide health impact pyramid (pictured below) to better understand the key determinants of population health.


As shown on the pyramid, socioeconomic factors and transitioning individuals to healthier "default" behaviors hold the most promise for achieving what Ms. Dentzer refers to as "achieving the potential of health system transformation."

What does this mean for health systems? Well, for one, the key to population health success involves carrying out activities that have traditionally not been performed by the traditional health system. The most successful health systems, then, are likely to have well developed groups that function essentially as a private public health department within the larger integrated organization.

If taking on responsibilities for public health services (e.g., helping people find reliable housing, providing job training, encouraging exercise, developing campaigns to end domestic violence, etc.) seems outside the realm of the traditional health system, it is. But it's just what health systems must do if they are to succeed.