High Performance Health Care

In 2001 the Institute of Medicine published Crossing the Quality Chasm. This seminal work identified the chasm between what we know about providing high quality health care and what was actually being delivered. Many of the improvements identified in this book can be seen today in the various health care proposals from the White House, Congress and health care advocacy groups.

Progress has been slow, however. As Carolyn Clancy, the director of the federal Agency for Healthcare Research and Quality, recently stated regarding current quality improvement efforts –

“An example of success in 2007 was removal of the quality measure that assesses the delivery of beta blockers to individuals who have had a heart attack to reduce subsequent mortality from the list of measures used to score health plan performance, because performance has become routinely excellent. Any sense of elation, however, is tempered by the slow speed of improvement, that is, the landmark clinical trial results from which this measure derives were published 25 years ago. This is but one example of many illustrating that we face a longstanding challenge assuring rapid uptake of scientific advances.

Belief in the existence of ‘transformative’ interventions – from health information technology (IT) to disease management to many others – which will effect dramatic improvements, feeds the illusion that clarifying the targets of opportunity is equivalent to addressing them. Moreover, the urgent need to build the science (of execution) has not yet been clearly articulated in a persuasive way to encourage much-needed investments in improvement methods, training, and demonstrations.”

The failure to execute is a common problem in many organizations but more so in health care. The barriers are well understood and include an incredibly complex system, splintered leadership, strategies that vacillate between financial goals and patient care, and no external pressure strong enough to force change.

Because we work in the Opus College of Business, we see this failure to execute in contrast to many of our clients and students that work in businesses that do execute well. For example one of our large retailing client’s informal motto is “Speed is life.” Their need to get the right product on the shelf at the right time is a key factor in their success and a high value in their enterprise. Executing strategies effectively and quickly is a known science – but it appears to not have crossed the chasm into the health care field.

Companies that execute well use the following tools:

Business Intelligence systems for analysis and automation
Balanced scorecards and strategy maps
Formal PMI based Project Management with a Project Management Office
A disciplined leadership approach
An ongoing strategy of employee engagement and culture improvement

A number of recent posts by my colleague, professor Jack Militello, have outlined various approaches for strategy formulation. Future posts will provide more details on how these strategies can be effectively executed using these contemporary business tools.

Healthcare organizations can effectively execute – but they need to understand that they do not need to reinvent the tools already successfully being used throughout rest of the business world.

References
Institute of Medicine. (2001). Crossing the Quality Chasm: A New Health System for the 21st century. National Academies Press.

Clancy, Carolyn. “Building the path to high-quality care.” Health Services Research 44.1 (Feb 2009): p1(4).

Posted by Dan McLaughlin at 02:20 PM | Permalink | Comments (0)

As federal health care reform continues to advance, most of the new programs enacted have increased the cost of the American health care system. Recent major federal initiatives include the expansion of the State - Children’s health insurance program (S-CHIP) and a major expenditure of $20 billon for Health Information Technology. Although both of these investments may eventually reduce costs (through better preventive services and automation of clerical tasks) their effects will not be felt for many years.

The Commonwealth Fund recently released a report indicating that, without intervention, U.S. total health spending is projected to double by 2020, rising from a projected $2.6 trillion in 2009 to $5.2 trillion by 2020. This will consume 21 percent of the gross domestic product.

To truly affect health care costs in any immediate time frame, changes need to be made in the actual delivery of care. The care for patients with chronic disease represents a major portion of this nation’s health care costs. According to a recent analysis, virtually all Medicare spending growth from 1987 to 2002 could be traced to beneficiaries who were treated for five or more conditions (1). Fortunately, a chronic care model has been developed by Ed Wagner and colleagues that has been demonstrated to be very effective in reducing costs and improving quality. This model calls for health care organizations to implement delivery system redesign, patient self-management support, systematic decision support, clinical information systems, and links to available community resources (2).

The challenging question is how can this type of care be delivered most effectively? As we reported in an HPHC posting, the Medicare disease management demonstrations were a failure. And a recent article in JAMA showed that only 2 of 15 care management demonstration projects showed any positive financial results (3).

However we do know the chronic care model works and well-managed organizations such as the Marshfield clinic can demonstrate substantial cost savings and quality improvements. The major differences between the failed Medicare demonstrations and the success of the chronic care model are whether these approaches are fully integrated into primary care delivery systems. A model for this type of care is sometimes called the primary care medical home and in Minnesota is known as the health care home.

The health care (medical) home is characterized by:

1. Personal physician or other primary care provider who establishes an ongoing relationship, is the first contact, and provides continuous and comprehensive care.
2. Provider-directed team that collectively takes responsibility for ongoing care.
3. Whole person orientation.
4. Care coordinated and integrated across all elements of the complex care system.
5. Quality and safety as a priority.
6. Enhanced access to care through systems such as open scheduling, expanded hours and new options for communication between patients and providers.
7. Payment that appropriately recognizes the added value of the health care home.

Minnesota passed significant legislation last year and is currently in the process of implementing the health care home. The state has a number of work groups that are defining it in more detail, adding chronic care elements and developing new payment methods to support it. More details can be found here >>

In its report, the Commonwealth fund modeled the effect of the medical home and a number of other coverage and payment reforms. They estimate these changes could slow the growth in national health spending by a cumulative $3 trillion through 2020, compared with current projections.

Successfully implementing the health care home in a variety of practice settings will be challenging. However, it is one of the few options for significant change that can both increase quality while reducing cost. Minnesota can lead the way.

References:

1. K.E. Thorpe and D.H.Howard, “The Rise in Spending among Medicare Beneficiaries: The Role of Chronic Disease Prevalence and Changes in Treatment Intensity,” Health Affairs 25 (2006): w378–w388 (published online 22 August 2006).

2. E.H.Wagner, B.T. Austin, and M. Von Korff, “Organizing Care for Patients with Chronic Illness,” Milbank Quarterly 74, no. 4 (1996): 511–544.

3. Deborah Peikes; Arnold Chen; Jennifer Schore; et al. Effects of Care Coordination on Hospitalization, Quality of Care, and health care expenditures among Medicare Beneficiaries: 15 Randomized Trials, JAMA. 2009;301(6):603-618.

For an overview see: Berenson, Robert A., Hammons, Terry, Gans, David N.,Zuckerman, Stephen, Merrell, Katie Underwood, William S,, Williams, Aimee F, A House Is Not A Home: Keeping Patients At The Center Of Practice Redesign. Health Affairs; Sep/Oct2008, Vol. 27 Issue 5, p1219-1230, 12p.

Posted by Dan McLaughlin at 02:06 PM | Permalink | Comments (6)

In a recent post we discussed today’s financial pressures and the strong possibility of significant health care reform tomorrow that are forcing many health care organizations to reexamine their strategic plans. We reviewed some of the key theories of strategic planning that may be helpful in confronting this challenging environment.

Henry Mintzberg, in Strategy Safari, provides a comprehensive review of strategy and defines it in terms of a number of differing management activities. He provides a series of perspectives to view strategy. In my previous post I described strategy as a plan, strategy as a position and strategy as a pattern of behavior. In this post we explore other strategy models and issues.

Strategy is a perspective. – An organization’s fundamental way of doing things. This is also an emergent strategic approach.

Educators, managers and consultants ask for employees to think more strategically about their role in the business. On the other hand, employees are regularly asking for their leaders to develop and communicate a vision for the firm. Most strategic activities are wrapped up in hands-on tasks, such as creating matrices, aligning performance with measurements and leadership training programs. Little, if any, time is spent on thinking through the complexities of the business or the industry even though thinking is what is needed. Engaging in activities may be a way managers avoid thinking.

"Herbert Simon, winner of the Nobel Prize in Economics, popularized the notion that the world is large and complex, while human brains and their information-processing capacities are highly limited in comparison. Decision making thus becomes not so much rational as a vain effort to be rational." –Mintzberg, et. al. p. 151.

Strategic thinking and vision might be more important in today’s business environment that ever before. Information advances, production innovations and the globalization of capital are rapidly changing our world. Adapting to fast- moving change may demand emergent strategies which, in turn, may demand more nimble management thinking.

"Chess is a game of moves and countermoves. Assessing the differential power of each piece and each square on the board, the player conceives of and then executes a series of moves that creates a strategically advantageous position – for a while." – Slywotzky (1996), p. 11.

We must learn to better understand the human mind and how individuals in strategic roles make decisions. Perhaps we start with understanding ourselves as decision makers.

A health care example will be the emergence of Health 2.0 Internet technologies. A growing percentage of the population uses the Web 2.0 tools of social networking, blogs and wikis. Progressive healthcare organizations will immerse themselves in this world view and structure their strategy to use these tools to compete effectively for increased market share.

Strategy is a ploy. – A specific maneuver intended to outwit an opponent or competitor. This involves short-term, here-and-now positioning.

Ploys are a part of positioning rooted in game theory. How do airlines price? Where are the lowest priced items in a Wal*Mart? How did Domino’s pizza establish its market share? The answer to each of these questions resides in an understanding of competitive games and positioning against a well-understood competitor.

A primary care clinic that quickly expands its hours of operation into the evening to compete with a new “Minute Clinic” is executing a ploy.

What strategy is not.

Strategic management involves many moving parts. At times, single elements take over the planning process and make the firm lose sight of its true strategic process. Be careful to avoid the following traps:

•Strategy is not forecasting alone. Forecasting requires past data to predict future directions. The world would have to hold still in order for the past can catch up to the future. Forecasting can give us an idea or hint of what will happen in the future, but it can not be relied upon as the principal tool of strategy.

•Strategy is not operational excellence alone. Managers tend to see their organizations from in-house eyes. They see where they can improve the things and people that they can control from day to day. This activity may distract them from focusing on their strategic positioning.

"The quest for productivity, quality, and speed has spawned a remarkable number of management tools and techniques: total quality management, benchmarking, time-based competition, outsourcing, partnering, reengineering, change management. Although the resulting operational improvements have often been dramatic, many companies have been frustrated by their inability to translate those gains into sustainable profitability. And bit by bit, almost imperceptibly, management tools have taken the place of strategy. As managers push to improve on all fronts, they move farther away from viable competitive positions." – Porter, p. 61.

•Strategy is not facilitated participation alone. Many organizational groups need to develop cohesion.They need to know how they fit into the strategies of the firm and what sort of operating culture makes the firm most effective. Process consultants apply a number of group dynamic techniques to encourage creativity and cooperation. These processes tend to focus on personal behavior change and not on the business concerns of the firm. Participation is subject to individual error in that good feelings are not necessarily translated into good strategy.

Strategy creation and execution is difficult, but the survival of an organization can depend upon it. I will continue to explore other aspect of strategy formulation in future postings.

References:

Mintzberg, et al. Strategy Safari: A Guided Tour Through the Wilds of Strategic Management. New York: Free Press, 1998.

Porter, Michael and Elizabeth Olmsted Teisberg. Redefining Health Care: Creating Value-Based Competition on Results. Boston: Harvard Business School Press, 2006.

Slywotsky, Adrian. Value Migration: How to Think Several Moves Ahead of the Competition. Harvard Business School Press, 1996.

Posted by Jack Militello at 03:01 PM | Permalink | Comments (0)

In November, the University of St. Thomas Opus College of Business hosted the annual William E. Petersen Lecture on Physician Leadership. The guest speaker this year was Lois Quam, managing director of strategic investments, Green Economy and Healthcare at Piper Jaffrey. However, Lois has also had a long career of contributions to the health policy of Minnesota and the U.S. - both through her work on various governmental task forces and her creation of innovative services for the elderly and disabled as the CEO of Ovations Healthcare.

Lois’s address focused on the role of leadership in health care reform. (The text and video of her address is here.) Although the address was in November, she very accurately predicted what many now see as the shape of health care reform this year. One particularly important point was the role of Medicare as a platform for health security and reform. It seems counterintuitive that one of largest government bureaucracies in the world would be this vehicle.

This idea provoked a number of questions from the audience and some excellent dialogue. Recently Dr. Atul Gawande expressed a similar viewpoint in the New Yorker in his article Getting there from here. He reviews the history of health care reform in many of the developed countries and demonstrates that almost all of the change in those systems was built on the foundation of existing successful health care programs.

For those interested in experimentation and innovation within the context of government programs please review the health care reform report of the Congressional Budget Office and the White paper by Senator Max Baucus, chair of the Senate Finance Committee.

An example of Medicare’s willingness to test new concepts was its very large disease management demonstration project begun in 2002. For a number of years, proponents had argued that disease management would be a significant tool to save costs. We recently posted a summary of the poor results of this project. Disease management will be a part of health care reform in the United States, but its aims will be much more modest due to this test sponsored by Medicare.

Much of the future of health care in this country is probably contained in the experiments and demonstration projects now underway under the direction of the 43-year-old Medicare program. Change is coming this year – hang onto your stethoscopes!

References
Gawande, Atul. “Getting there from here.” The New Yorker. January 26, 2009.
The Congressional Budget Office. Key Issues in Analyzing Major Health Insurance Proposals. December 2008.
Baucus, Max. Call to Action: Health Reform 2009. U.S. Senate Finance Committee, Washington, DC. November 12, 2008.

Posted by Dan McLaughlin at 11:39 AM | Permalink | Comments (0)