Bridging Business & Healthcare : Healthcare Management Consultants for Dispute Resolution, Valuation & Clinical Compliance

2,080. 40 times per week. That’s the number of wrong site surgeries still happening annually in hospitals and clinics across the US, according to a recently released study from The Joint Commission. I read the article with great interest yesterday morning as I was making my way through several airports traveling to a client site. As I walked through an airport I stopped to watch several news stations, expecting to see some outrage at such statistics. Maybe even a catchy new headline – “The War on Error”.  I watched them all - CNN, Fox News, the political gamut – and saw…nothing. Not one story. Not even a passing interest. 

Have medical errors become so much a part of the fabric of our healthcare system that this type of news doesn’t even merit a mention? Has getting the wrong care become not only accepted, but expected?

As healthcare reform continues to press forward, we continue to design fixes that will allow us to slowly evolve into a new delivery system, all while not changing our current system too much or too quickly. We seem to have agreed somewhere along the way that some frequency of errors is acceptable, and that we need to work on this slowly, lest we break the system we have worked so hard to create.

This study proves what we already know – our healthcare system is still broken. How long will we as a nation continue to tolerate slow and steady fixes to the system, and at what cost? 

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Yesterday was no different than many other days in my life as a consultant.  Two clients, three cities, and finally arriving late evening at the hotel. It had been a long day of travel and I was looking forward to getting into my room and off of my feet. As I got onto the elevator, for some reason, the inspection certificate caught my eye and I felt compelled to read it. Capacity 1750 lbs. No more than 5 passengers. Inspection good through January 2012. And then I saw it – Certified by the State Administrator for Elevators and Amusement Rides. Elevators AND Amusement Rides?  Did I miss the “You must be THIS tall to ride this ride” sign? Visions of “approved” rusty carnival rides whirling in the air made me very glad to step out of the elevator and onto something a bit more structurally sound.

This week a new study from Mayo Clinic was released, outlining the volume of colonoscopies a physician must perform to demonstrate expertise as rated by an objective test of endoscopic skill. The study showed that the number of procedures needed to show competence in colonoscopy was nearly double the 140 procedures currently recommended. It also raised questions regarding many procedures and the training required to attain true expertise in performing them.

As we continue to plunge into a world of healthcare accountability based on value and not solely on volume, I have to ask the question: are setting the quality bar high enough? It is a difficult discussion for many practices and health systems to have, but the question of clinical competence must be expanded beyond performance that is simply ”greater than the state or national average.” Have we given our nurses and clinical staff the appropriate training to truly excel in caring for our patients? Are we holding all physicians to the same high standards for every procedure, in every setting?  Have we allocated our financial resources to truly focus on the highest clinical outcomes attainable, not just performing better than our nearest competitor? 

As the concept of measuring value and holding each other accountable for outcomes evolves, we must be cautious not to measure only what we currently can track and assume that it is good enough. We must continue to push to measure that which truly demonstrates a standard of excellence, not just a standard of competence, even if that means that some physicians or health systems won’t be able to provide that service until they can demonstrate a higher level of care. It may be difficult, but until we in healthcare hold ourselves to these new, higher standards, we will never know if we are getting elevator or amusement ride quality.

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As I was getting my daily fix of ESPN this morning, something a bit different than the routine scores and highlights came across my TV. Two very talented men, both potentially bound for NFL stardom, were showcasing their talents for scouts, coaches, recruiters, and reporters – a panel of judges if you will. Although these players have certainly proved their talents in the past, these workouts will likely determine which player an NFL team will choose to build their future around. These workouts are vigorous, competitive, and very, very public. As draft day approaches, there is a running tally of whose stock is up and whose is down. Which player is at the top of Mel Kiper’s big board? Who will be drafted in the top ten? Will they succeed or be a bust?

As I listened to the reporter break down every step of Cam Newton’s latest pro day, I wondered what it might be like if physicians were put through this type of workout and evaluation before we were “chosen to play on a team?” If professional entertainers are subject to this type of scrutiny, shouldn’t we expect at least that from those of us sworn to care for the sick and “do no harm?”

I thought about the standard recruiting process for most physicians. A check of our background and training. A reference check from those with whom we have worked. An interview or two and a nice dinner. All of this is usually followed by an offer and a contract. Not exactly the NFL combine when it comes to assessment of quality.

The world of quality in healthcare is at a pivotal point in its history. Tracking of quality data and performance is certainly central to any health reform effort, but when it comes to individual physician performance, we admittedly have a long way to go. The arguments over which data are good enough and whether or not it “applies to me” continue to be the core of many discussions in many physician lounges and hospital board rooms. We may not ever get to the level of intensity seen on NFL draft day, but if we truly hope to deliver the highest level of quality for our patients, we must be more open to increasingly higher levels of scrutiny and evaluation of our performance.

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Over the last several days I have been pouring myself into the latest information from CMS on what lies ahead in the world of quality – that being the proposed rule on Value Based Purchasing as published in the Federal Register. As with most things that the government produces, I prefer to read the original text, not only the summaries, as many of the finer details tend to get overlooked.

As I dug into the first page, I was actually a bit encouraged. We all know that quality will be included in whatever form of reimbursement is on the horizon and CMS’s approach sounded reasonable. 

Scoring methodologies should be reliable, as straightforward as possible, and stable over time and enable consumers, providers and payers to make meaningful distinctions among provider performance.

Makes sense to me. Then I read on….

After a 7 page description on why the metrics chosen were the most appropriate metrics, CMS goes on to dedicate a full 20 pages of the 39 page rule to describing the proposed scoring system, including a discussion of the use of "cube versus linear models" of the exchange function to determine ultimate distribution of payments among hospitals. It reminded me a bit of my vector physics classes from undergrad, but a little less understandable.

As those of you who know who know me well, I am in full support of integrating the measurement of quality into any reimbursement model. However, by trying to so fully objectify this measurement, it appears as if CMS has created (or at least proposed) a system that is begging to be gamed by those that participate in it. How long will it take for vendors to begin promoting “key indicators” that, if focused on and improved, will lead to greater reimbursement? And even if these “key indicators” are met, will we really see any appreciable improvement in quality of care? By focusing on payment reform first and care delivery reform second, we are once again creating another model of measurement rather than a model of improvement.

I don’t have all the answers, but I do believe as do many of my colleagues, that for any new delivery system to succeed, there will need to be a greater degree of collaboration between physicians and hospitals. If a measurement system of this complexity is ultimately implemented, it may very well lead us to the law of unintended consequences. By focusing on the details of the payment system and not the improvement of the delivery system, we make it more difficult, if not impossible, to achieve the integration, alignment, and redesign necessary to build the new delivery system that we can all agree is sorely needed.

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This morning United Health Care announced its new Cancer Care Payment Pilot. According to UHC, this pilot is designed to “advance a new cancer payment model that focuses on best treatment practices and better health outcomes.” As a matter of fact, most agree that the cost of treating cancer under the current model is unsustainable. As evidence for this position, Dr. Michael Neuss, an oncologist from Cincinnati, described existing payment plans that reward physicians for using expensive chemotherapy medications as “our dirty secret” in today’s New York times. In this world of the “new normal” of healthcare reform, I am “all for” exploring new models of care that attempt to provide the best care at the best price, but that does not appear to be the true goal of this model.

In reviewing the details of the model as outlined by UHC, this new pilot will reimburse providers utilizing a bundled payment plan based on the “expected cost” of treating a patient. The physician will choose the care plan, but all reimbursement will be independent of the drugs that are chosen to treat the patient. Basically, the physician will get a flat fee for what it should cost for him/her to see the patient in the office, plus a bit of a bump for case management and drug administration. The drugs will be reimbursed at cost, removing any profit incentive for the physician.

So far so good right? Not so fast. Although the disincentive for profiting on medications may lead to lower costs, what incentive will there be for truly improved quality and better care? Reading on in UHC’s press release, they do mention that they will be measuring the number of emergency room visits  (a cost measure), the incidence of complications (a cost/quality measure), and “health outcomes.” Exactly how they will be measuring outcomes is not said.

Even if you give UHC the benefit of the doubt that they are going to create robust, meaningful, outcomes-based quality metrics (which I am admittedly skeptical of), they have missed the boat on one very important piece of this equation. None of these quality metrics appear to be tied in any way to the physician’s income. How much the physician is paid is tied solely to the time likely to be spent caring for the patient – a bundling of expected fee for service payments, nothing more.

Creating appropriate incentives for any behavior is complicated, but B.F. Skinner showed long ago that negative reinforcement is short-lived. If you desire to have long-term change, you must reinforce a desired behavior. We must create new models that help us reign in cost. However, without including positive financial incentives that reward the best care, we will simply end up with another band-aid approach that rewards the payer, frustrates the physician, and fails to provide incentives to improve the outcomes of those at the center of care, the patients.

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As we continue to move further down the path of healthcare reform, finding ways to focus on and measure the quality of clinicians is generating more and more discussion. An article published this week in the Columbus Dispatch highlighted the value of board certification as a proxy for quality. The article even went so far as to reference the possibility of a higher rate of pay for physicians who maintain their certification. Opponents to board certification argue that performing well on a multiple choice exam does not truly represent good clinical quality, and that the cost to the physician as well as the time lost caring for patients in this era of physician shortage is not warranted. 

In a related article from NPR, the dying art of physical examination of the patient was highlighted.  In a 2002 study of family physicians, less than 40% could correctly identify 12 common heart sounds.

It would seem to me that these two studies cry out for the same solution – include hands on testing as a component of demonstrated competence for physicians. Now, before I cause a revolt at the ABMS, let’s think about this for a minute. Nurses are required to continually demonstrate hands on competencies in most hospitals to continue working in individual units such as the ICU. To be certified as an open water lifeguard you must demonstrate at least 4000 hours of open water experience to even be considered. If you want to fly a multiengine commercial jet you need at least 280 hours of experience, 10 of which are under the eye of an inflight instructor while demonstrating all the requisite skills needed to fly in a myriad of different circumstances. Why then would it seem so far fetched to require the same demonstration of skill for physicians? Combine a written course to assure mastery of knowledge with a live demonstration of clinical skills relevant to each physician specialty.   Putting something of this nature into practice would of course be very challenging, but if we are truly going to demonstrate quality, this may be a good place to start the conversation.

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This past week, Nevada’s state board of health found itself in the middle of an all too familiar debate – just how much information should hospitals be required to share directly with the public.  The debate arose over a new regulation that would require Nevada hospitals to report hospital acquired infections to the CDC’s infection database. That information would then be available to state regulators to track, trend, and respond to as needed.  The information would not, however, be available directly to the public. In leading the debate against full public disclosure, Bill Welch, the president of the Nevada Hospital Association, stated that although he was against allowing the public to identify which hospitals had which infections, he was in favor of “meaningful transparency.”
 
This debate over how much to share already has taken place in at least 27 other states. But as I read how others had solved this, I began to believe we aren’t looking for the right answer as much as we are asking the wrong question.
 
As an industry, healthcare is going through a transition in the realm of quality.  It is moving (or in some cases being moved) from only measuring processes of care – did the patient get an aspirin - to measuring outcomes of care – did the patient live or die?  Forces from within the industry, such as doctors Pronovost and Gawandi, and external forces as great as the new healthcare law itself are driving healthcare quickly toward this goal. While progress is being made, we are far from the end of this transition. 

Focusing on “how transparent we are” misses the point.  When we can focus on and achieve meaningful quality as demonstrated by consistently improved outcomes, debating over who sees the data won’t seem very meaningful at all.

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This past week, CMS announced a public comment period on several newly released quality metrics focused on stroke outcomes – 30-day all cause mortality and 30-day readmission rates. As I spend most of my day working on healthcare reform and quality, I spent the weekend diving into these metrics, wanting to be sure exactly which clinical improvements CMS was looking to incentivize physicians and hospitals to achieve. I quickly scrolled down through the 30-page “Measure Information Form,” looking to find the definition of the metric and why it was chosen. I had to go about 10 pages into the document, but there it was.  I came upon the section titled “Measure Justification” with the subtitle "Importance.” Under this impressive heading, CMS went on to say it would define this "Importance” by the "Extent to which the specific measure focus is important to making significant gains in healthcare quality (safety, timeliness, effectiveness, efficiency, equity, patient-centeredness) and improving health outcomes for a specific high impact aspect of healthcare where there is variation in or overall poor performance.” OK. Makes sense so far.

Not too much further into the document, CMS goes on to define the Summary of Evidence of High Impact. Perfect. This is just what I am looking for. Let’s see – Affects Large Numbers. I can buy that. Stroke affects almost 800,000 people every year in the U.S. Next. Leading Cause of Morbidity/Mortality. Stroke is the third leading cause of death in the U.S. after heart disease and cancer. Well said. CMS seems to be right on point. Next. Severity of Illness Stroke survivors frequently experience significant long term disability. And finally – High Resource Use. The estimated direct and indirect cost of cerebrovascular disease for 2010 is $73.7 billion. Hey, wait just a minute. I thought we were talking about improving clinical quality. How did this get in here?

When I was a young physician in training, we spent hours learning to read and interpret clinical studies, always keeping current on the latest trends to assure we were providing the best clinical care to our patients. It wasn’t that we were trained to ignore the cost of care, but we didn’t include it as we defined whether or not quality was improved. Quality was on one hand, cost on the other, and we weighed them together in our decision. Now it seems as if that line has become a bit blurred. 

In 2007, CMS released a report to Congress entitled “Plan to Implement a Medicare Hospital Value-Based Purchasing Program.” The report's goal is defined by moving more towards a value-based system of care as follows:

CMS recommends replacing the current quality reporting program with a new program that could include both public reporting and financial incentives for better performance as tools to drive improvements in clinical quality, patient-centeredness, and efficiency.

When you critically examine current demonstration projects, the trend continues. Right alongside of "Post-operative stroke” you will find "Average and median length of stay” both listed as metrics to measure quality.

When the definition of whether or not quality is achieved is dependent on the resources consumed, are we limiting our focus to only those outcomes that also provide financial savings? Has cost become the new sine qua non of quality? Maybe the new line isn’t that blurred after all….

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Traditional medical staff development has a very singular focus – getting the right number of physicians to serve the community’s needs. Although meeting the demand for services is crucial, the importance of choosing the candidate with the “right stuff” is often an understated step in this process. Many organizations dive right into the relationship with little or no thought as to organizational fit, practice style, or whether or not you can get along with each other.  The following are a few pointers to follow to ensure that you don’t find yourself stuck in a loveless marriage. 

•  Assure Fit First –Determine the “deal or no deal” qualities for which you are recruiting before you start the dating process. Screen for those traits that a candidate absolutely must have to be successful.  New practice? You need an entrepreneur, not a physician ending his or her career.   Part timer? A younger physician may be a better fit.  Most importantly, don’t try to make the candidate fit. If they don’t fit the mold, move on.
• Date Before You Commit – Take time to get to know the physician and his or her family before you put a contract in their hands. The physician should meet people outside of the medical staff, such as hospital executives, other physicians and community leaders. 
• Quality Matters – It is no longer enough to simply fill the slot on the medical staff development plan. Set standards in advance for the quality of practitioner you want on your staff. Make certain that he or she can adequately demonstrate their patient outcomes, not just the volume of patients seen.
• Don’t Compromise – Many a recruitment has gone awry when clinical quality is there, but behavioral issues are suspected.  Listen to your gut. If you suspect there are behavioral issues, there probably are. If you have any concerns around a physician’s behavior or ability to get along with staff, this is a patient safety issue.  Make sure you resolve any concerns in this area before moving on with any recruitment.

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I work with clients daily who are trying to best prepare themselves by implementing quality-based incentive compensation into their physician alignment strategies. As healthcare reform continues to be better understood and begins to be implemented, it is critical that hospitals understand how these bonuses/penalties will work.

The clients I work with are prone to latch on to the concept of a 1% to 2% bonus for quality outcomes, citing Pay for Performance and similar programs. However, the industry is moving away from a “carrot” and more to a “stick.” Healthcare reform will continue this movement. I found an interesting article that lays out the direction of quality-based incentive compensation in the future.

For hospitals that want to be on the forefront of the quality-based incentive compensation movement, it is important to start now by:

1. redesigning metrics based on outcomes;
2. requiring improvement year to year to continue earning incentive; and
3. incorporating down-side as well as up-side criteria in the agreement.

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There is no doubt that cost control will be a major component of efforts to overhaul the current healthcare system.  These efforts are now only vaguely spelled out in the Patient Protection and Affordable Care Act (PPACA) and include such approaches as the development of accountable care organizations (ACOs), implementation of patient-centered medical homes (PCMH) and utilization of global payment methods (perhaps a new and improved version of capitation).  Quality of care will continue to be a driving factor, which incidentally means that pay-for-performance (or value-based purchasing) will be emphasized in payment reform.  For example, the PPACA outlines the implementation of the hospital value-based purchasing program with a proposed effective date of October 1, 2012.  Acute care hospitals will receive bonus payments for performance in five measures.  In the following year, hospitals will also be evaluated utilizing efficiency measures such as Medicare spending per beneficiary in addition to the five core measures. 

Similar to the Balanced Budget Act of 1997 (BBA), it is also quite likely that a reduction in physician payment for services may also become necessary (termed "productivity adjustments" in the PPACA).  However, while physicians did see a cut in payment during the initial years of the BBA, payment was increased in subsequent years.  The report issued by the CMS actuary determined that "projected Medicare cuts could drive about 15 percent of hospitals and other institutional providers into the red."  It seems that it would be somewhat counterproductive to open up healthcare coverage to additional millions while jeopardizing coverage for others.  Another potential impact of cutting payment to physicians, other than its effect on current physician practices, hospitals and Medicare beneficiaries, is fewer physicians entering the field of medicine in the future.  Should the proposed payment cuts actually be enacted, it is probable that fewer graduates will commit to practice medicine.  This would be very detrimental to healthcare access. 

It seems that cutting costs while attempting to improve quality and increase access to care will require extensive creativity and great sacrifice on many fronts.  The Rolling Stones said it best - You can't always get what you want.  I just hope that as we try very hard as a nation to find the best solution to our healthcare issues we will get what we need. 

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Approximately 4 years ago, a family friend who was a practicing attorney in his early 60's had a moderately complex valve surgery performed at a reputable hospital. He was told he would eventually need the surgery, but it was not critical to have immediately. He decided to proceed with the surgery.  He was in relatively decent health. He survived the surgery and recovered well, getting moved from CCU to private room within a couple of days. Then he acquired an infection (sepsis). He never returned home, leaving a widow and many loved ones.
 
Risks are inherent in any invasive procedure. But the incidence of hospital-acquired sepsis and pneumonia are preventable and manageable. Without doing so, the costs are extraordinary. For example, Healthcare Financial Management Magazine recently reported that in 2006 alone there were 48,000 people "killed" due to these two hospital-acquired infections. The cost of these infections totaled 8.1 billion dollars....and this does not include the cost associated with the loss of a productive life, as in the case of my friend.
 
The ultimate face of real healthcare reform will likely include more accountability for these types of results as, indeed, government payers such as Medicare have already begun to reduce payments for such infections. Clinical outcomes must be the centerpiece of real reform. Time will tell if PPACA will accomplish this or not. But rest assured that a central tenet  of any health system strategic plan we are privileged to lead will include a focus on improving clinical outcomes. Consumers cannot easily discern quality in healthcare (see Michael Millenson's post about misunderstood Joint Commission data.), but numerous efforts are under way to provide real direction for consumers. This will, of course, eventually impact market share, as it should.
 
We are interested to learn more from our clients and friends about how they discern quality. Are there websites you utilize? Reports you read? Let us know. We will of course keep you posted on all things Quality, Strategy, and Finance related to healthcare, so check our healthcare blog often for updates.

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