High Performance Health Care

David Leonhardt writes “The Economic Scene” for the New York Times. He has immersed himself recently in the economics and political economics of health reform. On Sunday, November 8, he wrote a most interesting article in the New York Times Magazine on Dr. Brent James, the chief quality officer of Intermountain HealthCare. Brent has been recognized for years as one of the best practitioners of the behavior change to high quality, low cost medicine in the country. The article proved Leonhardt gets what health reform is all about.

On November 11, Leonhardt wrote in his column about the two goals of health reform: “The first – insuring the uninsured – carries grand overtones of social justice. The second-- making the health system more efficient – can seem abstract, technocratic, and a bit nerdy.” He then suggests the House bill passed last Saturday passes the first test and flunks the second. The following are his reasons for flunking the system reform test, and my reactions as a policy reformer of more than three decades.

1. Reform is not just about bending the medical cost curve, but about saving lives at risk in hospitals and from over-use of medicine, and passing the financial savings on to insurance premium and tax payers. He’s right. Peter Prenovost’s 18-month experiment in 108 Michigan hospitals that reduced deaths from preventable infections to near zero is not being repeated in the other 6,500 American hospitals because they are still being paid for errors and not being rewarded for no errors. It is CMS obligation and the Medicare and Medicaid payment system to stop paying for preventable mistakes and to steer insured Americans away from the recalcitrant. Nothing in the bill requires that, thanks to the AHA.

2. What works in medicine? Modern medicine is full of uncertainty, but much of that can be eliminated by funded research in effectiveness science. The medical industry at all levels has always objected to performance comparison and to the application of effectiveness science to its work product. The attacks this year on Dartmouth’s landmark work are evidence. So is two decades of industry lobbying Congress against comparative effectiveness. Stimulus investments in this science are being limited in application in the House bill by the industries involved. The White House can change this in conference.

3. A Federal Reserve Bank for Medicare payment reform which would have power to recommend payment changes to Congress which would go into effect unless vetoed or changed by Congress within 40 days of submission each year. The administration is willing to go down this road and the Senate may help. But experience with MedPAC tells us that the medical industry will find a way to own the commission or subvert its results before the days are up each year. This is big. The problem is the industry/Congress/lobbyist relationship, which is so pervasive that only a majority party needing meaningful health system reform can create the language it needs and assure the impartiality of the appointment process.

4. The McAllen, TX, problem references efforts on the part of conservative Democrats and some potential Republican Senate supporters to authorize Medicare to institute payment differentials based on the value of the care rather than the volume. We don’t need an IOM study – which was as far as Pelosi and the New York City/Los Angeles committee powers would go combined with demos. We need pilot projects – in effect different Medicare programs in different regions in the country – which go into effect after a five year demonstration of effectiveness. The MMA 646 Demo proposal from the upper Midwest 7-state consortium three years ago is an on-the-shelf model.

5. Expanding health insurance choice in the workplace. The president promised choice. The House did not deliver. The ERISA preemption for self-insured plans is so sacred to large employers and unions that they oppose efforts by Senator Ron Wyden (D-OR) to require employers over a certain number of employees to offer three health plan choices to their employees. Perhaps link access to these with health management services as well. This is the same “health insurance exchange” that members of Congress and we retirees have – a choice of chances to buy into good health and affordable coverage. The White House must support Wyden and Republicans should support him too even if they do not support the bill.

6. The Cadillac tax is not good tax policy. Every health policy reformer I know has tried to change the code to limit the subsidy to an average individual and average family plan. The unions have always objected. The unions stand to gain so much from the achievement of universal coverage, they ought to consider working with employers to share some of their financial subsidy excess with the uninsured and under-insured. Only the president can pull this one off and he must to take advantage of this once-in-a-lifetime opportunity to start down the path of cost reduction through smart purchasing.

7. The Doctor-Patient Relationship. Universal coverage is the first step to enabling accountable health care organizations to change their health system’s performance. The Congress is likely to treat physician payment reform separately in a bill to change Part B of Medicare. That’s not all that’s to it. How doctors get paid for what is critical to what they do and how well. The growing disparity between primary and specialty care led us to the RBRVS in the first place. It’s getting much worse, and SGR does nothing to make it better. Performance pay is essential. Issues around health professionals’ licensure don’t even come up, but are critical to improving efficiency and productivity in health systems. Access to comparable information is critical, as is removing presumed penalties for doctor’s judgment calls. David Blumenthal’s work on health information technology must be a priority. Informed Patient Choice is a new liability standard which must be combined with shared decision-making.

Posted by Dave Durenberger at 01:12 PM | Permalink | Comments (0)

At the Medical Group Management Association’s (MGMA) annual meeting in Denver on October 12, T.R. Reid of the Washington Post reminded us what the health care conversation in this country should really be about. Mr. Reid’s new book, The Healing of America: The Global Quest for Better, Cheaper, and Fairer Healthcare, is the culmination of a three-year project to understand and document HOW and WHY every industrialized country in the world (other than the United States) provides universal health care coverage to its citizens. His book addresses these questions, but fails to find the answer to “Why doesn’t the U.S., the richest country in the world, provide universal coverage for its citizens?” Mr. Reid argues that until we make the commitment to health care for all, true reform in the U.S. will be impossible. Here are the highlights of his presentation:

First, what he did NOT find. He did not find that universal coverage is “all the same.” Every country does it a little differently and their systems reflect the cultures and national priorities of the country. He did not find a predominance of “socialized medicine.” Private health care works in other rich democracies. Although some countries do have a single payer system, many more have a system of private payers. (Japan has more than 3,000 payers, Germany more than 200, and Switzerland around 70.)

Of the nearly 200 countries in the world, he could categorize all health care systems into four general models, determined by “who is the provider?” and “who is the payer?”

1. The Beverage model (developed in the UK): It is government’s role to pay for 100% of health care, “cradle to grave.” Taxes are high, but they pay half of what the U.S. does for health care. The government owns hospitals, pays doctors and pays bills. This is real socialized medicine. This is also used by Spain, Italy, New Zealand, Cuba and much of Scandinavia.

2. The Bismarck model (developed in Germany): Everyone is required to have insurance and premiums are split between employers and employees. There are private doctors, hospitals and insurance, but insurance is highly regulated and insurers are required to cover everyone and pay all claims. This model is also used by France, Netherlands, Switzerland and Japan.

3. National Health Insurance model (Canada): The program features private providers, but the government pays. “Premiums” (taxes) are paid to the government and they call it “medicare.” A gatekeeper system is used in which general practice doctors must make the referral to specialists. Reid singled out Canada’s approach for criticism because Canada has limited numbers of specialists and advanced equipment which leads to “lots of waiting" for non-emergency care. The model is popular in newly-rich countries such as Taiwan, which has avoided the waiting problems of Canada.

4. Out of pocket model (all poor countries of the world). Patient pays at point of service; if you have money, you’ll get care. Others rely on barter, charity or do without needed care.

All four models are in effect in the United States: the military and Native Americans have the Beverage model; the elderly have the NHI model though Medicare; more than 50 million employed people have the Bismarck model; and about 47 million Americans fall into the “out of pocket” model. This differs from the rest of the world in which most countries have just one model.

Why do most countries have one model? The reasons resonated strongly with the medical group managers at the MGMA conference:

1. It's simpler and cheaper to administer. Reid says in the U.S. we spend 18-25% of our health care dollars on administrative costs--which include only the administrative costs of the insurers, not the processing done by the providers. Other countries with private insurers, such as France or Japan, average around 5% administrative costs.

2. There are strong incentives for preventive health care and keeping people healthy. In the U.S., the average tenure of an individual in a health insurance plan is less than five years, so there is no incentive to spend the money to keep you healthy if you’ll soon be “someone else’s problem.”

3. It is "fairer" to have everyone have the same access to the same health care at the same cost.

Reid ended his remarks by saying that each country’s design of a health care system fundamentally reflects the country’s values. To summarize his book in one sentence, he said that, “If the U.S. could find the political will to commit to provide health care to everyone, the other rich countries of the world could help show us the way.”

Perhaps looking at other countries can help us envision a uniquely American health care system that reflects our national values and plays upon our strengths instead of emphasizing our weaknesses.

By Cindy Lorah

Posted by Erica Lyons at 02:38 PM | Permalink | Comments (0)

It is very likely that the health care delivery environment will changes significantly over the next four years as elements of health care reform are implemented. Organizations need effective implementation tools, and the Balanced Scorecard has proven very successful in many organizations as a way to move strategy to action.

The key element of the Balanced Scorecard is, of course, balance. An organization can be viewed from many perspectives, but Kaplan and Norton identified four common perspectives from which an organization must examine its operations:

1. Financial
2. Customer
3. Internal process and innovation
4. Employee learning and growth

As an organization is viewed from each perspective, different measures of performance are important. Every perspective in a complete Balanced Scorecard contains a set of objectives, measures, targets and actions. These measures are displayed graphically in performance dashboards. In addition, each measure in each perspective must be linked to the organization’s overall strategy.

The indicators of performance in each of the four perspectives must be both leading (predicting the future) and lagging (reporting on performance today). Indicators also must be obtained from inside the organization and from the external environment.

Although many think of the balanced scorecard as a reporting technique, its true power comes from its ability to link strategy to action. Balanced Scorecard practitioners develop strategy maps that link projects and actions to outcomes in a series of maps. These maps display the “theory of the company” and can be evaluated and fine tuned. The illustration at the top of this post is a strategy map for implementing a medical home model in a clinic. Each initiative (in a box) is linked to other initiatives that eventually result in better patient care and improved financial performance. Follow this link to a set of videos that shows how to create Balanced Scorecards and strategy maps with PowerPoint and Excel.

Balanced Scorecards and performance dashboards have begun to be used more widely by health care organizations. In an extensive study of 139 hospitals, Kroch found that “greater hospital quality was linked to shorter, more focused use of dashboards for operations management and strong influence of board quality committees in dashboard content and implementation.” Denham undertook a study a health care leaders and found that “If the quality destination determines the performance profile required . . . then leaders really do need to be involved in the design of their performance measures, especially if they are taking a new transformative trajectory to high performance.”

The Balanced Scorecard approach is an effective tool to execute strategy and measure performance. To quote Don Berwick from the 10,000 lives campaign, “Some is not a number . . . soon is not a time.”

References
Denham, C. R. 2006. "Leaders Need Dashboards, Dashboards Need Leaders." Journal of Patient Safety 2(1)

Inamdar, N., and R. S. Kaplan. 2002. “Applying the Balanced Scorecard in Healthcare Provider Organizations.” Journal of Healthcare Management 47 (3): 179–95.

Kaplan, R. S., and D. P. Norton. 2001. The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Boston: Harvard Business School Press.

Kroch, E., T. Vaughn, M. Koepke, S. Roman, D. Foster, S. Sinha, and S. Levy. 2006. "Hospital Boards and Quality Dashboards." J Patient Saf 2(1): 10.

Mankins, M. C., and R. Steele. 2005. “Turning Great Strategy into Great Performance.” Harvard Business Review 83 (7): 64–72.

Niven, P. R. 2002. Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results. New York: John Wiley & Sons.

Posted by Dan McLaughlin at 01:47 PM | Permalink | Comments (0)

This country has a misplaced over-reliance on litigation, poorly trained lawyers and ambulance chasers (including attorneys general) to remedy errors in products, professional services and public policy.

The quest for value (quality/price) has led to CQI and error-free products delivered by producers around the world. How long does a supplier of defective product survive contracts with Wal-Mart or Target? Zero hours from discovery, not years, as in medicine.

In medicine, we have always relied on the medical professions to police themselves via a combination of education, licensing, credentialing and state medical boards. It doesn't work in an age of sophistication in diagnosis, treatment, technology and the like. The data on medical errors, including deaths, is incontrovertible, and yet the medical professions refuse efforts to change, preferring to blame others for their "defensive medicine."

The professions have ready allies in patients like us who have always relied on our trusting relationships with them to deliver exactly what we need or want. It's a rare doctor who doesn't take his own precious time to excoriate insurance, managed care, Medicare, the government, regulations, lawyers or "the business of health care," whenever patients raise questions about prescriptions or cost.

The medical industry (professions and products) have come up with an easy rationale for what they conveniently label "defensive medicine." It's called "cap punitive damages." In Minnesota, no cap is necessary because juries of Minnesotans don't like to penalize their doctors. Damage awards are so low as to induce settlement of even egregious cases. In other states (follow the power of the trial bar a la a Grisham novel) legislative caps are necessary.

The trial bar and the Ralph Nader crusaders fight back and the Democrats fall in line behind "consumer protection" and the American Trial Lawyers Association. So we have a stand-off, and the medical errors, the unnecessary deaths and the poor comparative quality of medical care and over-priced products continues unabated. I am a policy veteran of the wars to get past this stand-off with medical liability reform. It doesn't work because "public opinion" refuses to deal with the fact that their doctors and hospitals make mistakes.

This is a policy debate worth having apart from "health insurance reform" or whatever we currently call the legislative effort at policy change. However, it would require physician, hospital and medical technology leadership. If they won't come forward and be honest about what really goes on in the "practice of medicine," we don't stand a chance.

Posted by Dave Durenberger at 03:38 PM | Permalink | Comments (0)

The 2009 William E. Petersen Symposium on Physician Leadership will feature Dr. James Mongan, president and chief executive officer of Partners HealthCare, Boston, MA, an integrated health system founded in 1994 by Brigham and Women’s Hospital and Massachusetts General Hospital.

A professor of health policy and a professor of social medicine at Harvard Medical School, Dr. Mongan also serves on the board of the Commonwealth Fund and chairs its Commission on a High Performance Health System.

Dr. Mongan is a member of the Institute of Medicine of the National Academy of Sciences. He has served on the boards of the American Hospital Association and the Kaiser Family Foundation, and was a member of both the Medicare Prospective Payment Assessment Commission established by Congress and the Institute of Medicine’s Commission on the Consequences of Uninsurance.

He has received numerous awards and was most recently recognized by Modern Healthcare as the Most Powerful Physician Executive in the U.S. in 2008.

The presentation will be held on October 7, 2009, at 6 p.m. in the Schulze Hall Auditorium, with a reception to follow in the Atrium.

Dr. William E. Petersen was chief medical officer for Allina Health System. Prior to that, he served as vice president of medical affairs at Abbott Northwestern Hospital. He was in private practice, specializing in internal medicine, for 32 years. He served as director of the Center for Health and Medical Affairs from 1995 until he retired in 1999. Throughout his career, Dr. Petersen has modeled the most positive aspects of the physician executive and leader.

Register online for this free event.

Posted by Erica Lyons at 03:02 PM | Permalink | Comments (0)

The GOP can't lose what they never had - public confidence that they understand the problems real people experience accessing and affording health care. The current party comes from parts of the country where medical practice culture is oriented around “more is better” and the doctor is always right, individuals need to take more responsibility for their choices, abortion and euthanasia are not cost containment but liberal values, and the problem lies elsewhere than with me or us (people like me).

Democrats believe that access to health care is a right, that private and for-profit institutions are less likely than public and some nonprofit to guarantee access and care quality and contain cost increases. They believe the success of programs such as Medicare or the VA health system prove that health care is not a commodity but a social good, the right to which is a public necessity and a public responsibility. Democrats represent older, more populous parts of the country which are more attractive to immigrants and low-income persons from Republican parts of the country because of a long tradition of health and social services.

Starting with something like this, you can add your own observations of the two sides represented at the health care town hall meetings across America this past August. Then ask yourself, who is representing the millions of families we all know whose behavioral, mental, disability and medical problems are such that they haven't ever had a consistently confident experience with any institutional or professional resources regardless of where they live in America? Their problems are often compounded by family, education, economic situations and bad relationships, threat of crime, addictions, etc.

The rising cost of medical care ($2.9 trillion this year) in a pluralistic system is a greater threat than Obama care today. Ours is a system in which everyone has choices, few have good information, and no one has any notion of what's quality care nor a "health home" they can count on to be there for them.

So a GOP congresswoman from Minnesota can call for "a covenant, slit our wrists, be blood brothers" to stop any Democratic health reform. And an equally naíve (not the word I'd like to use) Catholic Bishop from Sioux City, Iowa, can argue “the Catholic Church does not teach that government should directly provide health care. Preserving patient choice (through a flourishing private sector) is the only way to prevent a health care monopoly from denying care arbitrarily, as we learned from HMOs in the recent past.”

Posted by Dave Durenberger at 10:27 AM | Permalink | Comments (0)

On November 6, we will once again be presenting the UST Executive Conference on the Future of Health Care. We are very excited about the outstanding speakers who will be making presentations. Although this year has been dominated by health care reform, there are many significant changes occurring in health care delivery and we believe we have identified trends and speakers that are leading change in the system.

This year’s conference is “Where Innovation and Quality Will Take Us” and is presented in partnership with LarsonAllen and Fredrikson & Byron.

The conference will feature keynote speaker George Halvorson, Chairman & CEO, Kaiser Foundation Health Plan and author of Health Care Will Not Reform Itself (2009).

In addition, it will feature lively panel discussions on:

Innovators on the Fast Track – Breakthrough thinkers reveal their new models of health care excellence.
Featured speakers:
o Lou Cornacchia, President & CEO, Doctations, Inc.
o Marcus Osborne, Director of Health Clinics Design & Development, Wal-Mart Stores, Inc.
o Dr. Garrison Bliss, President & CMO, Qliance Medical Management

Providers Revolutionizing Quality – Organizational leaders share how their forward-thinking quality initiatives protect and enhance their bottom lines.
Featured speakers:
o Diane Gross, Vice President/General Counsel, Poudre Valley Health System – Fort Collins, CO (2008 Malcolm Baldrige National Quality Award winner)
o Ken Paulus, President & CEO, Allina Health System – Minneapolis, MN
o Dr. Edward Shultz, Director of Information Technology Integration, Vanderbilt University Medical Center – Nashville, TN

Registration is now available at http://ustfutureofhealthcare.com/

Posted by Dan McLaughlin at 03:25 PM | Permalink | Comments (0)

Depends on what the question is. Kathy Dodge from Bloomberg News called me this past weekend. She is visiting HealthPartners, a staff-model HMO in Minnesota which doesn’t want to be called that and is legally a co-op, and heard I was a skeptic. Not at all, I told her. “I’m one of those health reformers who believe everything we need to do to change the system has already been invented.” For example, if you are a multi-specialty medical practice group which also owns your hospital and an insurance plan, you can share the benefits of your quality and efficiency improvement with your staff and your plan members. Makes no difference whether you are legally organized as a for-profit, nonprofit, or cooperative. The tax breaks under state and federal law which go with the nonprofit theory of community benefit, or with the co-op in some states, is a subsidy that can make them more competitive than tax-paying for-profits.

You can find purchasing cooperatives in some states as well, including Minnesota. Usually they are financing access to public programs for specially eligible populations. Senator Jeff Bingaman (D-NM) and I authored legislation to make them available to individual and small group purchasers back in 1990-91. It would have made it possible to spread the risk of small groups across much larger numbers of members, ages, gender, and medical conditions. Sort of like insurance exchanges might today. At the same time, I was doing small group insurance reform legislation with Senator Daniel Patrick Moynihan (D-NY). Adopted from Delaware and Minnesota models, it would require insurance companies to compete on risk assumption, not avoidance, with guaranteed issue (no pre-existing conditions limitations), guaranteed renewal with limits on premium price changes through rating bands, as they are called, and others.

If you are a member of Congress and genuinely interested in health care cost containment, try real health insurance reform. Repeal the McCarron-Ferguson Act as it applies to health insurance so every insurance company can sell anywhere in the country if it plays by the same rules, not 50 different rules. Do what Moynihan and I tried for all plans and add an evidence-based basic benefit, some cost-sharing rules, standard claims process for all companies and all benefits, and a few other things I don’t understand and we’ll save billions. Then ask Bingaman to bring back the Health Insurance Purchasing Cooperative (HIPC) instead of the Association Health Plan and you’re good to go. You bring Grassley and Hatch on board by jettisoning the public plan and you give Kent Conrad the authority he seeks for co-ops that maximizes the value of private insurance, however organized, rather than calling it “keeping them honest.”

At that stage, even CBO should be able to score savings and you can go on to creating legislative authority to pay more appropriately for high performing health systems like HealthPartners or Intermountain Healthcare in Utah or Group Health Cooperative of Puget Sound in Seattle. That list goes on and on with examples that can be emulated even in McAllen, TX; Miami, FL; Los Angeles, CA and New York City. If the local medical-industrial-political complex is willing.

Last word. Co-ops are not THE answer. THE answer is competition and consumer choice. Of readily comparable consumer products. Like health insurance and health care. I’ve read about AHIP spokespersons who imply that competition means the more health insurance in a community, the more consumer choice and competition. Wrong. It’s no accident that the lowest utilization, lowest per member cost, and highest quality care is in states with virtual monopoly insurance companies like the Blues of Montana, North Dakota, Iowa, and Maine.

They are also nonprofit with a community benefit, not shareholder benefit, obligation. It's what happens when insurers are not adversaries of providers and purchasers and patients are people and citizens, not just consumers. Minnesota is the only state to require its HMOs to be nonprofit.

The same can be said for real insurance competition where only a few plans are in the market able to leverage on behalf of health care improvement. With five large plans in a metro market, providers have to respond. With 100, there are no incentives for providers to change or for informed choices by consumers. Republicans believe markets are made up of hundreds of medical specialty companies from which consumers in need make choices. To take on the problem of chronic illness they took a good idea, called special needs benefits, converted it into private Special Needs Health Plans in MMA 2003, paid them lots of Medicare money, and today we have thousands of these plans in illness specialties you can't even imagine. Are costs coming down? No. Just the opposite.

What makes for health system reform? Cooperation, not competition as we currently know it. In medium-sized Wisconsin communities with two medical clinics and hospitals, they call it “co-opetition.” Doctors cooperating to keep people well and out of hospitals and competing on the most productive and efficient use of hospitals, when needed.

Posted by Dave Durenberger at 03:10 PM | Permalink | Comments (0)