Managing cultural change when moving from fee to value: 11 healthcare leaders respond

Progress is impossible without change, and those who cannot change their minds cannot change anything, playwright George Bernard Shaw once said.

The healthcare industry is discovering this firsthand. Organizations are grappling with the rapid changes brought on by healthcare reform, increased consumerism in healthcare and greater emphasis on value. Hospitals, health systems and their leaders are quickly learning that to continue to succeed in this evolving landscape, they must change not only work processes, but also the mindset and culture of the organization.

"Changing culture has been talked about a lot," said Peter Doerner, executive vice president and chief development officer at North American Partners in Anesthesia (NAPA), the nation's leading provider of single specialty anesthesia and perioperative services. "The healthcare industry is like a car speeding down the highway. We'd love to pull off onto the side of the road to do what we need to do, but if we do that, the rest of the industry will keep going and pass us. So we need to hang out the window, change the tires and anything else that needs changing, while the car is in motion."

The transition from fee-for-service to value-based care has already begun, signaling a new era in healthcare. At a recent roundtable hosted by NAPA, 13 of the nation's top healthcare leaders discussed how they are handling the transition at their organizations, especially as it relates to the management of the perioperative service line and the operating room — the biggest sources of revenue for hospitals. In other words, how exactly are healthcare leaders managing to balance the shift from one reimbursement model to another while keeping OR productivity and profitability high?

Peter Doerner: Describe the cultural changes you are making in your organization to help ensure a smooth shift from fee-for-service to value-based care.

Duke Anderson, President & CEO, Hillsdale (Mich.) Community Health Center: We have been talking about organizational change and what will likely take place. We have been trying to educate our board, management team, medical team and staff. As an organization, we don't like change at all and we are bound by old habits. So what we've tried to do is bring in experts from the outside to discuss these issues. We've organized special meetings for the board with people from outside. We have tried to open up a dialogue.

John Ackeret, Growth & Development Manager, Aurora Health Care (Milwaukee): We have 1,400 doctors employed. At our monthly staff meetings, the physicians see their [patient satisfaction] scores, which are also posted in physician lounges. We've been doing that for more than two years. Some doctors say, 'That can't be right, I can't control patients and how they manage their care.' But we continue to help physicians with peer-to-peer assistance and other opportunities to help with their patient experience. It's an area we're putting a lot of focus on, and we are trying to help them improve.

Dean Gruner, President & CEO, ThedaCare (Appleton, Wis.): We're a seven-hospital system and employ about 40 percent of our total physicians. We started, in some respects, ahead of some of the conversations. With the primary care physicians, between 20 to 30 percent of their compensation is tied to quality and local financial performance. In 2010, we really worked hard with our board to talk about the future of payment. The board established the perspective that fee-for-service is the root cause of problems in healthcare. We have 24 percent of revenue [now tied to] total cost of care.

Our board was really excited about this and wanted us to go faster, and the independent physicians wanted us to go slower. When we talked to them about forming our own accountable care organization, we thought it would happen in eight months. It took 22 months. We've had independent physicians who are really not excited about moving to the value-based or risk-based approach. They are very hesitant, and I think part of the reason is they are scared and don't know what works. We have had to go slower than we would have liked. You can't force physicians to go faster than they want, so you have to deal with the reality.

Peter Doerner: What are some best practices you have implemented in terms of culture change in the OR?

Phillip Kambic, President & CEO, Riverside Health Care (Kankakee, Ill.): The biggest change we have made in the operating room is getting nurses certified with special certifications. Our foundation had a fundraising campaign that raised around $1.5 million for scholarships and applications. Having enough nursing staff and opening up the OR schedule on weekends also makes it easier for physicians to practice there. When physicians have access, they will come to our facility versus another facility. The rest sort of falls into place. We've seen a great increase in volume because of that.

Patricia Fox, President & CEO, Riverview Health (Noblesville, Ind.): We moved our endoscopy department so we can ensure that the preoperative and postoperative nurses are cross-trained, and we have moved the less complicated procedures to the middle of the day so there is constant productivity. Also, we used to have a surgeon run the OR, but now we have an anesthesiologist. It's truly an orchestration. You need to have a great scheduler and great team communication to ensure the OR runs efficiently.

Patrick Board, President & CEO, Union Health System (Terre Haute, Ind.): We used to have terrible start times in the ASC for a while. We got the surgeons to carve out some money so as to allocate money to those who arrived on time. We jumped from 50 percent on-time starts to 80-something. It was their own money, and they bonused themselves to start on time.

Mr. Doerner: What about technology. What are you all doing from a data standpoint to gather data, in the OR and outside of it, to drive discussions of cultural change?

John Di Capua, MD, CEO of North American Partners in Anesthesia (Melville, N.Y.): Ultimately, changing culture and getting initiatives to stick is really a big challenge. I've heard people talk about quality issues, customer service issues and throughput issues. And over the years I've not been very impressed with how we've moved the ball on quality outcomes. For example, wrong-site surgeries should not occur. In other industries, they can go 180 days without an accident.

We need better data. Our colleagues at North Shore were looking into improving hand-washing compliance in their hospitals. They put cameras at the wash stations by every ICU and found the hand-washing compliance rate was 6.5 percent. They used this data and started giving real-time feedback regarding hand-washing compliance in the hospital. The compliance rate went up and is now at 95 percent.

We decided to apply the same idea to the OR to improve efficiency. We have developed and implemented remote video auditing technology for the OR. We put cameras in the OR with an outside third-party auditor. Through the cameras, you can observe timeouts and sign-outs, OR cleaning and so on. The independent, third-party auditor collects data, thereby eliminating concerns about bias. We push the data out in a number of ways — LED boards, iPhone apps, etc. The auditors also shoot out messages to whoever you want. So if you want to let surgeons know that the OR is almost prepped for their case, the auditor can message the surgeon so he or she knows when to head to the OR.

You've got to hit the behavior when it occurs. Feedback needs to be timely. It is easy to gain buy-in with this data because it is being collected by an unbiased third party and it is also not a sample. We record every case, every day. The results have been dramatic. We are also starting to use remote video auditing in the ICU.

Active management and feedback are essential for the success of an OR. The difference between a great OR and a not-so-great OR is leadership. That's something we take very seriously.

Barry Tanner, President & CEO, Physicians Endoscopy (Jamison, Pa.): We've created our own dashboard, accessible to all physicians, so they can look at their own schedules and drill down into individual metrics, whether infection rates or hospital transfers. All the data is available to them and we can decide if there are outliers. We encourage all of our centers to participate in GIQuIC — a central database. The whole idea, around the country, is to have critical mass of data and figure out what is important and what is meaningful. We are also trying to push data out to physicians' smartphones. But, at that stage, an extremely limited amount of data is actionable to physicians. So we want to identify two to three pieces of data that may be actionable to them in next 48 hours to fill block time in schedules.  

Mr. Doerner: We know that as we move from fee-for-value, particularly a bundled model, treating surgeons as customers is important, and it will be more important as we move to a complete value-based model. What are some of the best practices you've found in getting your surgeons on board?

Tom Mallon, Co-founder and CEO of Regent Surgical Health (Westchester, Ill.): We have 18 [ambulatory] facilities with hospital partners and we've been doing this surgeon-as-a-customer [approach] our whole lives. Surgeons are our partners, our customers, and everyone else is a secondary customer. The surgeons, and helping them be more efficient, are the only reasons a surgery center exists.

The thing we've seen in our partnerships as we move from surgeon-Regent partnerships to surgeon-hospital-Regent partnerships is the magic happening in the boardroom. When the CEO and/or CFO are part of our boards, they are on the same side of the table. It's the only meeting every month where the CEO and CFO aren't on the hot seat. The surgeons aren't attacking them. What happens before and after that meeting is magical — the distrust and dislike melt away and they collaborate. They treat each other as peers and people, and you can see, after three to four months, they are making deals that never existed prior to them meeting. These are things they are doing outside of the surgery center partnership [regarding] other services they want to do together.

John Di Capua: Shadow rounding is another great idea. It is great customer service for surgeons. There is a lot of competition for surgeons around the country. Also, block schedule utilization is model we have to break in hospitals. Block schedules tend to waste time. There are many more ways to utilize OR time more efficiently.

Barry Tanner: The key is empowerment and partnership. Bring physicians into the conversation regarding block schedules. Get together with them and show them how much block time gets wasted. Also show them how much it costs to staff the OR during that time and how much money got wasted. Physicians tend to do the right thing and they will try and fix it.  

Joanne Urbanski, President & CEO of South Haven (Mich.) Health System: We try to be very transparent with our communications. We are an independent, 82-bed hospital, so market consolidation is on the forefront of many of our meetings. We have physicians on boards so they can hear our bottom line. We also put out, on a daily basis to everybody, our daily revenue. Did we hit our daily revenue? That way, everyone is on board and can see our performance. They can get a snapshot of our performance for the month. Communication is key to that transparency. [Physicians] would like to remain independent too, so there is incentive.

More articles on healthcare management and leadership:

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