Healthcare Reform: What Might it Look Like?

I showed this photo to an acquaintance who happens to be an ER nurse. The turkey vulture in the image was sitting on a tree next to the freeway, and the title of the photo was Waiting for Roadkill. That nurse said, “hey, that’s how we feel about ourselves working in the ER!”

There is that certain irony in healthcare in that we get into it because we want to help. But perversely we need people to get sick or injured in order for us to help, to have jobs, to get paid, and fulfill our personal mission to do good. One person’s worst day of their life can be our chance to make a difference, or to have an adrenaline rush or an intellectual challenge.

The same irony applies to healthcare organizations: the unhealthier the population we serve, the more likely that the organization can fulfill its mission, especially if that population has a payment source.

What about the future mission of healthcare organizations? The mission will probably not change, but:  Can we continue to sit like the vulture and keep our beds full and our outpatient departments busy, or is something new headed our way? Below I’ve listed some of the changes that we can expect as part of healthcare reform. And if you are thinking that the Supreme Court is going to strike it all down and we will return to the good ol’ days, think again: The current system is simply unsustainable. These are the good ol’ days! Reform itself will change, but there will be reform of some sort.

Moving From
Paid to take care of sick people. The more procedures and episodes of care, the better the revenue stream.
Moving Towards
Paid to keep populations healthy; the less that high cost care is provided, the better the bottom line. Encourage use of seat belts, obeying speed limits, eating healthy, ambulatory services and so forth.

Moving From
Set our prices and make up for losses on charity and government-paid services through profits on commercial insurance (cost shifting).
Moving Towards
The expectation that all payors will gravitate towards the level of payment made by Medicare. There will be nowhere to cost-shift to.

Moving From
We write things down, scan it, and then we file it away. A box of paper costs $10. Pens are ten cents.
Moving Towards
We document electronically, communicate the information through all levels of care, and assemble the collective data in novel and useful ways to guide our decisions. The patients’ records follow them wherever they go. A comprehensive EMR costs millions of dollars.

Moving From
Do our best and charge for our efforts, even if sometimes we have to re-admit or do-over.
Moving Towards
Payments will be at risk based on measures of quality and patient satisfaction. We will have to absorb the costs of our errors.

Moving From
We do our thing, doctors do their thing.
Moving Towards
Alignment of physicians and hospitals into some version of coordinated care organizations.

Moving From
We do our thing, nursing homes, home health agencies, outpatient providers do theirs.
Moving Towards
Single payment per episode of care, and other “bundled payment” schemes

It will be a challenging time. You’ve probably heard the old saying that “no money, no mission.” Some organizations will likely not survive the changes. I’m confident that the organization that I work for can survive and possibly even thrive in the “going to” future world, but that period of transition will be incredibly challenging because the incentives and payments now and in the future are polar opposites.

Here is what I know rehab providers can do to prepare that is within our control:
1. Reduce costs through control of expenses.
2. Learn how to optimize and most effectively use services. (For an example, in outpatient PT will 3 visits per week be more effective than 2 visits per week? Challenge the conventional wisdom and go with identified best practices.)
3. Where ever possible, measure quality and strive to be the best.
4. If we have an established way of doing things, do it that way always. Variation is costly and leads to errors and uncontrolled processes.
5. Challenge the way we do things, but remember that in a complex system each thing we do is tied to many things that others do; any proposed change needs to be carefully evaluated to avoid unintended consequences.
6. Focus on the mission, and have fun.

Many people get anxious when they face change. I see it differently: It’s an opportunity to become an agent of change, to make a difference in how we do things for years to come. This is a time when we all need to engage in adapting and molding our work to the new future.

Why We Do What We Do

I subscribe to a rehab listserve.  Many times, the discussion threads take a hopeless or angry tone when the various contributors try to predict the future of healthcare and the profitability of their businesses.  Such was the case recently, when many private practive PT business owners lamented the cuts in payments, the over-regulation, healthcare reform and the general state of the economy.  I think there may even have been mention of the end of the Mayan calendar!  (OK, I made that part up.)

But one contributor, Thomas Howell PT, from Idaho, wrote the following.  I think he summarized nicely my thoughts on the subject.

I am tired of the doom and gloom AND I am tired a discussion that hasn't once focused on the patient. At its root healthcare is and always will be about caring for people. Ask me if things are harder than 10 years ago and I would say firmly NO. I have more tools from equipment to outcomes tools and more research evidence than ever before to guide what I do and allow me options for care that are successful and repeatable.

Patients/clients are receiving care that, even when limited by insurance, is still way better than I ever could have imagined 24 years ago when I started PT school. In addition, I have opportunities outside of traditional PT care to establish a business model with, from fitness to wellness to women's health. 25 years ago a majority of PT practices survived only by contracting with home health or SNF's because the reimbursement was much worse than it was today.

What is harder is to use physical therapy purely as a business to get wealthy but you know what - that's not what this profession is all about. I am about profit as much as any American business person and agree that we have too many regulations but at the same time my motivation is not profit but treating patients. Every day I am thankful for the opportunity to make a difference in people's lives.

Yes, maybe our profession will become a profession that we cannot make a huge profit any more but does that diminish it or what we do day in and day out as healthcare professionals? I don't think so and I would bet many other colleagues would agree. Ask yourself if you would still be in the profession if you could only earn what teachers make in your area. Would you still be in the profession? I know plenty of PT's that would because patient care and making a difference in people's lives is the most important thing to them as it is to me.

Amen.

Oregon's CCO Transformation

In Oregon, healthcare reform will be centered around new Coordinated Care Organizations (CCO).  Much of this is still barely understood by providers, but in fact the implementation will begin this year.  To get a general overview of what the CCOs will encompass and their role in Medicaid, click here for a presentation put together by the Oregon Association of Hospitals and Healthcare Systems.

July Management Retreat

Last Tuesday the leadership of Asante gathered at our Smullin Center to spend the day focussing on another one of our strategic goals for the organization.  This day's topic was regarding our relationship with the medical staff.  I found it very informative even though the information was both disconcerting and very complex.  I'll try to summarize the 8+ hours of meetings into a few paragraphs here.

The underlying story is that healthcare is entering into an era of unprecedented change.  Reimbursement can no longer be as it has been, and as we move into a period of value-based purchasing our need to respond will determine our ability to survive.  It is clear that "value"  (outcomes, satisfaction, cost, health of the population) is driven at least as much by physicians as by hospital staff.  Without physicians who align their behavior with the goals of the organization, we simply cannot be successful.  And, for physicians who choose the path of autonomous practice, the future for outlyers looks very risky indeed.

So the path of Asante is to better align our physicians' interests with the goals of the organization.  This alignment has many forms, but includes increased employment of physicians by the hospital.  Those innovative arrangements are yet to be completely evolved, but it is clear that in the next few years the tone and tenor of physician relationships will change radically in the Rogue Valley. 

In perhaps the most radical departure from the past, we will not work with physicians whose goals are at odds with those of Asante, or whose behavior and customer satisfaction detracts from our overall results, or who display a "my way or the highway" attitude.  We will see some physicians hit the highway.

This will be disruptive.  Since it's largely new territory, we'll have some false starts to our initiatives.  Common interests will create strange bedfellows, and former best friends may depart.  Interesting times.

Part of the day consisted of six physicians (three from each hospital) sitting on a panel for one hour, and discussing on stage what it's like to practice in our system.  It gave us a flavor for their challenges and needs.  Here's the bullet points that I took away from that discussion:

• They need information.  Quickly, easily, and seamlessly.  They need efficient work processes that allow them to be as productive as possible.
• They need to trust the hospital leadership.  And they need to hear about follow through on concerns.
• Physicians are focussed on the patient experience.  When the patient is seen on followup, they want to hear that the experience was positive.  And they all agreed that it takes very little to turn the experience into a negative one.  It can be as small as a bandage left on the floor of the room, or (more commonly) delays in answering call lights.
• Physicians, especially surgeons, do not want us to un-do what they have done for the patient.  Safety, teamwork and attention to detail are critical to success.

There was also a delightful exchange between a cardiologist, an OB-GYN and a colorectal surgeon about the most important organ of the body.  The cardiologist, of course, said it was the heart.  The OB stated with certainty that it was the vagina.  The surgeon had the last word, insisting that the rectum was the center of the body!

Next was a discussion of our pending implementation of the EPIC electronic medical record.  That work is getting underway now, and based on experiences at EPICs other sites it will solve many of the communication, efficiency and safety concerns of physicians and the hospital.  This will be one of our very highest priorities until go-live in spring of 2012.

The next few years will not be for the faint of heart.  This will be a time of uncertainty, very hard work, and stress.  It is also the time that we all have the opportunity to set the bar for the best 21st century healthcare system in our region.  I'm convinced that it will be Asante.

Bagpipes and Hospitals

As many of you know, I used to play bagpipes. Yes, that statement is now past tense: I recently sold my pipes on eBay. Life seems to have become more complicated in the past five or six years: It used to be a struggle to find enough practice time, but now it is impossible. That’s why I faced reality and finally sold the instrument to a deserving piper in Indiana.

The pipes had been safely stored in their case for the past 5 years. When I was getting ready to sell them it was the first time I’d had a chance to take them out and reminisce a little bit. My pipes were made locally by a world-renowned pipe-maker, Murray Huggins. (There’s a fascinating story about Murray on Oregon Public Broadcasting. If you want to learn more about him, just click here.) My pipes were a relatively early model, before Murray’s reputation had spread. He had experimented with different woods and designs prior to making my pipes, and was unsatisfied with his prior products.

***Best Practices***

He then took a pilgrimage to Scotland to meet one of the more famed pipe-makers of that time in order to learn better manufacturing techniques. That led to him using African blackwood, which is extremely hard, relatively rare and very expensive. This wood needs to dry for years before being shaped. Blackwood is still his primary media today. He copied some of the measurements of the Scottish pipes, and hand crafted my pipes from what he learned in Scotland. After making mine, he continued to experiment with different measurements on future models: tiny changes in the caliber of the pipe bores, or tapers, or distance between finger holes: it all made a difference to his ear. He’d often ask me to bring back my pipes so he could measure some detail in an effort to reproduce it. Through trial and error, the instrument he had made for me had turned out to be a very good approximation of the ideal instrument he aspired to make. After more trial and error for a few years, he eventually came up with designs that were so good that he now has several months’ of order backlogs from around the world.

***Elimination of Variation***

Finding the right calibration for the internal dimensions of the pipes was just part of his journey towards excellence. He also needed to change his work process to eliminate random manufacturing variations. What started as a manual manufacturing process—subject to random errors in measurement or drilling or whatever—is now more hard-wired. He has manufactured his own machining tools that make each bore, each taper, and each instrument, the same. There is still the randomness or creativity of working with individual pieces of wood, or the design craftsmanship of the exterior of the instrument, or even with the reeds that generate the sound into the pipes, but the music-making pipes are as reproducible and standardized as they can be. Customers can rely on consistent sound quality without random variation.

***Strategy***

The other standard that he has maintained is that—despite the huge backlog of orders—he still does all the manufacturing himself. He has a strategic vision for his little business, and he stays with that vision.

***Culture of Always***

In healthcare, efforts to systematically eliminate or reduce randomness are underway. Replacing random is the “culture of always.” Evidence-based practice and best practices are not just buzzwords, they are actually the basis of our hospital reimbursement from CMS (Centers for Medicare and Medicaid Services) starting in two years. Those best practices are known as the Medicare “Core Measures.” Simply put, they are well-established procedures that decrease morbidity and/or mortality, or that improve outcomes. Processes like giving prophylactic antibiotics before surgery, providing aspirin in certain situations, and starting antibiotics for pneumonias within a certain time-frame. If we fail to do those things each and every time that they are indicated, we will not only have inferior outcomes, but we will be penalized in our reimbursement. Some hospitals will not be able to survive with those sorts of payment reductions.

Those who have been through our DNV accreditation surveys will also see some parallels with how DNV views the survey process. Their surveys focus on two aspects of hospital quality.

***Standards***

First is adherence to CMS standards (which DNV summarizes in their NIAHO—National Integrated Accreditation of Healthcare Organizations—standards).

Second, DNV looks for adherence to our own policies and procedures. In other words, they check to see if we have hard-wired and standardized what we do, or do we simply write policies and follow them “sometimes?” This part of an accreditation survey relies heavily on the methods of ISO 9001 (International Standardization Organization), which is a proponent of documenting intent through policies, procedures, and such, and then following through on that intent. Standardization in a healthcare organization—as in bagpipe production—eliminates undesirable variations in the outcome.

In addition to Core Measures, CMS pays based on customer satisfaction. High customer satisfaction also requires that we perform at the same high level each and every time we interact with patients. We, as individuals, will continue to have personally “bad days,” but we can no longer accept patterns of bad behavior. CMS is already measurings our patient satisfaction. You (and all of our potential customers) can see the result on the government’s website.

The satisfaction “score” is based only on what are known as “top box” answers. Top box are the answers that are at the top tier of the scaled responses. For example, one of the standard questions asks patients to rate the responsiveness of the hospital staff. In scoring the hospital, CMS only counts the number of responses that indicate that staff was “always” responsive to their needs. “Sometimes” answers count the same as “never.” This is different from the past, where our Press Ganey scores were weighted according to the number of each of the scaled answers. “Always” is is now our only goal.

***Always***

Of course, it’s not just one type of employee that needs to be in the “always” mode. Each person working in the hospital, from registrars to doctors to therapists to phlebs to administrators walking the hallways need to be always aware of how they shape the patient experience, how they contribute to safety, and how they can contribute to assure that other staff do the same.

***Never-ending Quest for Excellence***

If you check that link above, you’ll see that in nearly every question, we score higher at RVMC than at competing hospitals. To put this in perspective, I recently assisted in an interview of a candidate for an executive position at Asante. When I asked what attracted him to this system, he said, “Asante has so much going for it, most hospital systems around the country are envious of what has been accomplished here. You really do have a strong reputation around the country. But what really impresses me is that the leadership at Asante is not satisfied with what has been accomplished: They strive to achieve the next level of excellence. This is the type of place that I want to work.”

-bp

Healthcare Reform and Rehabilitation

This may be a cumbersome post, suitable only for those who care about such issues as healthcare policy and reform. And when you are reading, keep in mind that ultimately this only reflects my own opinion and viewpoint. Hopefully it’s food for thought.

So I’ll start with a poll: If you think that healthcare delivery is going to change in the next 6 years, raise your hand. [Waiting, counting.] If you didn’t raise your hand, and you think the health care systems will ultimately be about the same, with minor adjustments, raise your hand. [More waiting, more counting.]

I’m guessing that your vote falls along the lines of your political persuasions: If you believe that “ObamaCare” was an important step forward in providing healthcare to all, you probably feel that the country will continue—with minor adjustments—onward to full implementation of the healthcare reform law that was passed last year. You also feel that rationality will ultimately prevail and that the arbitrary system that we have now will change with the helping hand of government.

If you feel that “ObamaCare” is a bureaucratic takeover of healthcare, inevitably destined to include Death Panels to pull the plug on anybody over a certain age, you probably raised your hand for the second choice. You feel that rationality will ultimately prevail and that this excellent system that we’ve spent years designing in the U.S. of A. will continue to evolve without the heavy hand of government.

Reality, as usual, has little to do with political views. Here are some realities that impact this discussion:

• Healthcare costs are rising rapidly, taking an ever-larger portion of the Gross National Product and contributing to ever-increasing government deficits. This is unsustainable. Unsustainable means something will change. Fact.

• Payments from Medicare and Medicaid do not cover the cost of delivery of services. That means that the commercial insurers have to pay an ever-higher portion of total healthcare costs in order to make up for what the government does not pay. (“Cost-shifting.”) The insurance companies must then pass these increases on to the employers who ultimately pay for the coverage. Employers are unwilling to continue to absorb these increases; healthcare benefits costs are already causing major distress to their bottom lines. This means that something will change. Fact.

Given the two imperatives above, it’s our destiny that healthcare funding and delivery will change. The only real question is if it will be a deliberate, carefully crafted change, or will it be driven by politics (“special interests”) rather than facts, or will the system simply implode. Who of you votes for “carefully crafted” as the preferred route?? [Counting hands again.]

Years ago, Oregon tackled one of the overriding realities of healthcare: it must somehow be rationed. Prior to the reforms enacted here, the rationing happened by limiting the number of people who could be on the Medicaid rolls. When money ran out, they simply stopped letting people in to the system. After reform, the rationing occurred differently: more people qualified, but medical needs were ranked and some diagnoses and procedures were not funded. We see one of the results of that reform now in our outpatient therapies: PT for the “sprains and strains” diagnoses are not covered, but services related to stroke are covered. The rationale for this being that if we have to cut something, let’s cut something that will eventually usually get better without treatment. Carefully crafted. Fact-based.

We do not know what Washington is going to do in implementing (or not) the Healthcare Reform Act. But, once again, Oregon is moving ahead with its own reform, and will likely be far ahead of whatever our Congress and CMS come up with. Here is the future:

1. Payments from government payors to providers will be cut more.
2. Hospitals are likely to be made accountable for the costs of re-hospitalization and downstream care (e.g., home health and rehab services) up to a month post-discharge from the acute hospital.
3. It will be increasingly difficult, if not impossible, to cost-shift to commercial insurance.
4. A higher proportion of individuals will be covered by government-backed insurance.
5. This decrease in income will put a squeeze on providers to cut costs in order to survive. Some will not survive, at least in their current forms.
6. Hospitals and healthcare systems will operate based on a well known premise: Ultimately, cost is controlled by utilization patterns. And utilization is controlled by physicians.
7. The logical response to this fact is that physicians will increasingly be employed or otherwise aligned with the hospitals. Furthermore, services provided outside the hospital (SNF, IRFs, outpatient services) will also need to align with hospitals’ interests in order to receive referrals.
8. We are likely to see new configurations of healthcare systems. The catch-word of the moment is “medical home.” No single definition exists, and different methods have been used in different parts of the country. But what they focus on is utilization. Higher primary care utilization for patients who could avoid hospitalization (diabetics, heart failure, asthma, to name a few) and “smarter” utilization for those who do need hospitalization. The old-fashioned description is a case-management approach to medicine.

To get an idea of how this might work, check out Atul Gawande’s article about utilization in the January 17 New Yorker.  I especially liked this little vignette from the article; you can imagine how “rogues”—whether they be doctors or therapists—would be handled in a well-managed, rational, system:

[The physician] told me about a woman who had seen a cardiologist for chest pain [20 years] ago, when she was in her twenties. It was the result of a temporary, inflammatory condition, but he continued to have her see him for an examination and an electrocardiogram every three months, and a cardiac ultrasound every year. The results were always normal. After the [medical management] clinic doctors advised her to stop, the cardiologist called her at home to say that her health was at risk if she didn’t keep seeing him. She went back.

The clinic encountered similar troubles with some of the doctors who saw its hospitalized patients. One group of hospital-based internists was excellent, and coordinated its care plans with the clinic. But the others refused, resulting in longer stays and higher costs (and a fee for every visit, while the better group happened to be the only salaried one). When [this doctor in the article] arranged to direct the patients to the preferred doctors, the others retaliated, trolling the emergency department and persuading the patients to choose them instead.

“‘Rogues,’ we call them,” [this doctor] said. He and his colleagues tried warning the patients about the rogue doctors and contacting the E.R. staff to make sure they knew which doctors were preferred. “One time, we literally pinned a note to a patient, like he was Paddington Bear,” he said. They’ve ended up going to the hospital, and changing the doctors themselves when they have to. As the saying goes, one man’s cost is another man’s income.

And that last phrase is the heart of the matter. Our income, my income, all providers’ income, is someone else’s cost. My predication is that if we align ourselves with excellence in patient satisfaction, outcomes, and cost controls, then the rehab professions have a bright future. But nobody owes it to us. We become “preferred” by delivering results at the most reasonable cost compared to alternatives. Evidence will prevail over relationships and marketing.

In that same New Yorker article, Gawande describes the comments of a hospital CEO who had worked hard on the utilization issues. Under our current system, successful management of utilization means lower census and outpatient business—not exactly a sign of success for a hospital CEO. But that leader responded this way,

The Atlantic City economy, he said, could not sustain his health system’s perpetually rising costs. His hospital either fought the pressure to control costs and went down with the local economy or learned how to benefit from cost control.

And there are ways to benefit. At a minimum, a successful hospital could attract patients from competitors, cushioning it against a future in which people need hospitals less. Two decades ago, for instance, Denmark had more than a hundred and fifty hospitals for its five million people. The country then made changes to strengthen the quality and availability of outpatient primary-care services (including payments to encourage physicians to provide e-mail access, off-hours consultation, and nurse managers for complex care). Today, the number of hospitals has shrunk to seventy-one. Within five years, fewer than forty are expected to be required. A smart hospital might position itself to be one of the last ones standing.

Note re the Denmark comment: In Oregon, the bed ratio is 1.8/1,000 residents; in Denmark, it’s 3.5/1,000. For comparison, in Florida it’s 2.9/1,000 and in New York state it’s 3.1.   Nobody really knows how far we can go with reducing high-cost care,  but that's the journey we are on.