A couple of months ago I wrote about how one percent of adults in the US get free government health care.  While the statistics in the February Pew study were very interesting (and somewhat shocking), I saw a report in a local Connecticut newspaper (The Day, June 26th) that put a face on these statistics.

The Day’s story was about Jihad Abdulshaheed, a 36-year-old man who had been incarcerated since November 2007.  The judge was prepared to sentence to a one year sentence, and since he had already served at least 50% of his time, under the Department of Corrections guidelines for nonviolent prisoners he could have been released the next day.

However, this is where the story gets very interesting.  The man asked the Judge to hold off his sentencing “because he is waiting for the Department of Correction to schedule his surgery for a groin hernia.”  The newspaper also noted that the DOC’s health care budget for its 23,000 prisoners was $99.3 million.  This works out to a little more than $4,300 per prison.  It seems that finding a way to release this man, and still pay for his hernia surgery would make more sense than keeping him locked up until the DOC can pay for the surgery……. I also wonder about his follow-up care? Where will he get it - in prison or outside?  And how will that be paid for?

This man’s situation and the Pew study illustrates how communicating the essence of a healthcare story can involve statistics, analyses, and anecdotes.  The first two provides a framework if the issue, and the anecdote puts a face on that skeleton.  Each one can be powerful, but together they create a remarkable picture that can change policies, attitudes and actions.

The focus on Medicare payments to physicians for the last six months has been on the 0.5% increase Congress enacted for the first 6 months of 2008 to replace the 10.1% reduction that would have occurred under Medicare’s Sustainable Growth Rate (SGR) formula. Legislation to continue this rate for the rest of the year failed a required procedural vote in the Senate last week.* This leaves Medicare physician payments after June 30th uncertain – although it is expected that Congress will do something in the next week, or three.

However, beyond the impending Medicare 10.6% reimbursement reduction for all physicians, the Graham Center of American Academy of Family Physicians published a short report on June 13th that expands the analysis to include pending change in how Medicare reimburses physicians in Physician Scarcity Areas (PSAs), and Health Professional Shortage Areas (HPSAs). As the report’s summary table below shows, the PSA 5% reduction would effect about 25,000 primary care physicians and over 7.5 million Medicare beneficiaries. And these payment reductions would be on top of the impending 10.6% Medicare payment reduction.

With the general consensus being that we have a shortage of primary care clinicians, cutting Medicare payments to physicians in underserved areas seems truly unwise. And doing it at the same time that Medicare’s overall reimbursement formula for physicians is being so contentiously debated is really a bad idea.

If the PSA and HSPA programs would benefit by being adjusted to redefine their geographic or other targeted goals, then that should be done as part of comprehensive strategies and plans for improving Medicare’s payment system to ensure Medicare beneficiaries have continued access to physicians – particularly those providing primary care services. Making reductions to the PSA and HSPA programs right now seems like the right and left hands of government don’t know what they are doing.

* This legislation would have also implemented a 1.1% increase for 2009 instead of the SGR formula’s reduction of 5%

The Medicare Payment Advisory Commission released its annual report to Congress on Friday. In chapter 2 of its report, MedPAC makes two significant proposals for improving the financial incentives for primary care providers.

Great Incentives for Primary Care Practitioners Not Just Primary Care Services
First, it recommends changing Medicare’s reimbursement system for “evaluation and management” (E&M) services. While last year Medicare increased payments for E&M services, they couldn’t differentiate between types of physicians providing these E&M services, i.e. the Medicare system doesn’t distinguish between a family physician and a cardiologist if they are providing the same type and level of intensity of service.

Therefore, MedPAC recommends that a subset of primary care related E&M services, (e.g. office visits, home visits, long-term care patient visits), provided by clinicians who meet a minimum percentage threshold of a clinician’s total Medicare billing, (and thus would be identified as being “primary-care-focused practitioners”), should receive higher Medicare payments. (MedPAC choose to identify primary care clinicians based upon a percentage of primary care services - rather than specialty designation - because it would be administratively simpler and ensure that the incentives would be directed towards clinicians actually providing primary care services.)

The specific recommendation from the MedPAC report is:

The Congress should establish a budget-neutral payment adjustment for primary care services billed under the physician fee schedule and furnished by primary-care-focused practitioners. Primary-care-focused practitioners are those whose specialty designation is defined as primary care and/or those whose pattern of claims meets a minimum threshold of furnishing primary care services. The Secretary would use rulemaking to establish criteria for determining a primary-care-focused practitioner.

This is a sea-changing proposal in that it seeks to differentiate how Medicare Part B reimburses primary care providers versus subspecialists – and thus makes Medicare Part B payments more granular than was done when the RBRVS system was first installed in the early 1990s. (Back then, the fight was between so-called cognitive and procedural services.) This refinement will enable Medicare in the future to use its payment system as a more managerial tool for shaping the healthcare delivery system to increase the supply and access of primary care practitioners. The need for such changes is evident by the shrinking number of medical school graduates going into primary care:

However, because the proposal is intended to be budget-neutral it explicitly pits the financial interests of primary care practitioners against subspecialists, which means that the subspecialists will not eagerly welcome these changes to Medicare since they would be getting a smaller piece of a same-sized pie. (Note – MedPAC’s analysis shows that using the a cut-off of 65% of primary care services for clinicians to receive a 10% increase in payments for these services, would increase reimbursements for these services by a total of 6.2%, and would require a reduction for all other services of 0.9% to achieve budget neutrality.)

Build a Medical Home
MedPAC’s second proposal to promote more primary care is to increase the number of Medicare beneficiaries with medical homes.

Medical homes are the latest name for initiatives to give patients a single clinical practice or practitioner to ensure that their care is coordinated with the goal of improving the quality of care, and controlling costs by avoiding unnecessary complications and unnecessary testing. Medical homes are particularly important for people with chronic conditions for ensuring appropriate compliance with recommended treatments, disease monitoring and preventive testing. As the MedPAC report states, “Unlike the current fee-for-service (FFS) payment system, which emphasizes treatment for acute conditions and face-to-face care, medical home programs encourage practitioners to coordinate their patients’ care between visits and among providers. In improving care continuity and coordination, medical homes can enhance the role of primary care practice … [and] … increase our health system’s quality and efficiency.”

Medical homes are not new concept, as care coordination has been discussed since the original concept for HMOs several decades ago. Recently they have been promoted by primary care associations, and Medicare will start a medical home demonstration project in January 2009. MedPAC’s proposal builds off of the planned pilot, and would provide additional monthly payments to medical home practices providing the care coordination services. (Signing up with a medical home would be voluntary for Medicare beneficiaries and they would not have to pay any additional co-payments or premiums.)

MedPAC’s specific medical home proposal, which goes beyond the planned pilot project, is:

The Congress should initiate a medical home pilot project in Medicare. Eligible medical homes must meet stringent criteria, including at least the following capabilities:

• furnish primary care (including coordinating appropriate preventive, maintenance, and acute health services) [and medication management]
• conduct care management
• use health information technology for active clinical decision support
• have a formal quality improvement program
• maintain 24-hour patient communication and rapid access
• keep up-to-date records of beneficiaries’ advance directives, and
• ‘maintain a written understanding with each beneficiary designating the provider as a medical home.

Medicare should provide medical homes with timely data on patient utilization. The pilot should require a physician pay-for-performance program. The pilot must have clear and explicit thresholds for determining whether it can be expanded into the full Medicare program or should be discontinued.

MedPAC recommends an enhanced pilot project - rather than a national initiative -because there are administrative and technical factors that still need to be worked out, including, how to structure monthly payments to medical homes, and how to provide medical homes information about services provided to their patients by other providers so they can do care coordinating. The good news proposals for specialist physicians in MedPAC’s is that the pilot is not being proposed as budget neutral, but would cost between $250-750 million over 5 years.

Conclusions
Most experts think these proposals will be effective in improving the healthcare delivery system in the US, and I agree – provided that they are structured and implemented so they actually change the actions of physicians and patients. To be successful they need to change physicians’ practice patterns to focus more on primary care and care coordination, and to change patients’ behaviors so they use their primary care clinicians for more of this care management. In addition, as is reflected in the charts above, these proposals face the logistical challenge of finding enough primary care clinicians to provide these services. These changes will take time - it takes years to alter patient-physician relationships, shift how physicians practice or increase the supply of primary care clinicians – but this is not a reason for further procrastination.

p.s. I’m writing this from the road, so my editing and grammar may be somewhat deficient – my apologies.

Peter Orszag, (the Director of the Congressional Budget Office), delivered a very interesting speech last week to the National Academy of Social Insurance about “Health Care and Behavioral Economics.” He discussed how behavioral economics - which combines insights from psychology and economics - can both help to explain cost and quality problems in the US health care system and be used to begin developing solutions to these problems. This seems - at least to me - to be a very reasonable approach to understanding why individuals and populations don’t respond according to standard economic theory - which assumes both perfect knowledge and benefit maximizing actions.

For example, he uses behavioral economics to account for the significant regional variations observed across the US in the use of many advanced health care services. He notes that this may be because, “the social norms among local physicians seem to drive regional approaches in the use of these innovations.” (He also refers to a recent CBO study that found regional variations in health care costs have not changed in 20-30 years.)

However, his discussion of using behavioral economics to solve health system problems was limited, and focused on the actions of physicians and patients - which may be because he had only a short time for his speech. The three routes he did propose for shifting the norms of behavior are:

1. The use of evidence-based medicine - the current practical limitations and distortions of which I have previously written about
2. Better use of default options for both physicians and patients in both clinical and benefit design choices - a tool that is clearly underutilized
3. Financial incentives - particularly to increase healthier lifestyles and use of preventive services

I find it refreshing that the CBO Director appears to be embracing such qualitative perspectives, since before his tenure as Director, CBO had been criticized for being too conservative in its analyses of policy options. For example, by not embracing so-called dynamic scoring to consider costs and savings from secondary and tertiary behavior changes produced by policy proposals.

His perspectives and approach in this area also intersect with one of the main themes of a book about healthcare reform that I am striving to finish. Since my writing is not primarliy for academic audiences, (and I’m not an academically trained economist), I use the term “culture” to encompass the attitudes and behaviors of stakeholders - versus the term “norms” which Orszag uses - and I look to influence stakeholders beyond physicians and patients. But overall our solutions seek to achieve the same results by altering stakeholders’ attitudes, behaviors and actions to improve the structure and operation of the US healthcare system.

Like Peter Orszag, I do believe that economic incentives are part of the solution’s equation, but I more strongly believe that forces other than economics need to be considered and deployed. Specifically, the concepts developed by Everett Rogers about the adoption of innovation need to be used so that the social forces acting on physicians, other clinicians, large healthcare organizations, patients, payers (public, private and employers), regulators and legislators can work synergistically with economic forces to promote improvements in our healthcare system. Rogers’ principles also highlight the importance of deploying policy options so that they are embraced rather than resisted. Such considerations would certainly be important for turning Peter Orszag’s insights about default choices into specific policy proposals, so that people view the default options as acceptable choices rather than forced mandates.

These are just some of my thoughts on Peter Orszag’s comments and my own thinking about changing the culture of our healthcare system. I look forward to hearing more of his ideas in this area - which I hope will permeate the public debate about healthcare reform in the coming months and years.

What do you think are the best ways to change attitudes and actions of different stakeholder groups - particularly patients, physicians and payers?

Placing health reform in an historical context shows how the debate has evolved. For example, the National Bipartisan Commission on the Future of Medicare was formed to address Medicare’s projected insolvency - at a time when the overall focus for health reform was on cost containment. However, while the Commission met and deliberated, the booming economy shifted the debate away from cost containment towards access and coverage expansion, and the Commission’s 1999 final report, proposed adding an expensive outpatient drug benefit to Medicare.

Comparing two more recent perspectives on the future of the US healthcare system also illustrates how thinking about health reform evolves.

In June, 2003, (6 months before Congress passed the Medicare Modernization Act), I gave a presentation to the Presidents of the State Medical Associations about the future of the US health care system. My conclusions were:

1. We will continue to have a patchwork system of private and public delivery and financing
2. Innovations – primarily genetics/individualized medicine and information technology – will change how medicine is practiced
3. Budgetary pressures will be a prime driver of change
4. Individual empowerment will continue to increase the role patients play in their own healthcare
5. There will be growing emphasis on demonstrating actual clinical and economic outcomes as a prerequisite for payment or regulatory approval.
6. There are (were) three directions the US healthcare system can go:
   A. “Consumer Opportunity”
   B. “More Medicare”
   C. “Comprehensive Care Management”

I posited that “Comprehensive Care Management” was the most likely outcome, and that integrated care management organizations that would be responsibile for the cost and quality of a patient’s entire range of healthcare services would become more prevalent and be the best way to improve the healthcare system.

I recently had the opportunity to reflect on this presentation while listening to Dr. David Blumenthal (Director of the Institute of Health Policy at Massachusetts General Hospital) give brief keynote remarks about the future of US healthcare to a group of policy interested medical residents. His top-line comments about where the US healthcare system is heading in the next several decades were:

1. The economy is a key indicator of healthcare spending – countries with higher per capita GDP spend a higher percentage of their GDP on healthcare.
2. Technology is changing the nature of clinical medicine as well as patient-physician interactions and relationships. In the future, these relationships will likely be more collaborative.
3. The private insurance market will change over the coming decades, with movement away from the current employer-based model to more individual based insurance decisions.
4. Making changes in Federal laws and programs will be very different after the 2008 election, and changes in Congress may be more important than changes at the Presidential level
5. Globalization will affect medicine, with more international delivery of medical care.
6. Change is going to be more of a constant feature of healthcare. Success in the future will require being ready for change, embracing change, and managing change.
   

First, Dr. Blumenthal’s comments where much more coherent than mine. And second, although I disagree with his views on the eventual demise of the employer based insurance system, it is valuable to see how the health reform debate has evolved because of real-world changes over the last 5 years:

• The use of information technology by physicians in care delivery is no longer speculation
• Genomics-based diagnostics and therapies are now realities
• Safety and quality are much more prominent issues in the public debate
• Budgetary issue are still important, and the pendulum is in the process of swinging from how do we pay for universal coverage to how do we contain costs as part of an overall strategy for promoting economic growth.

There will continue to be lots of debate about health reform – particularly during this election year, and in the next Congress. I don’t think we’ll see the singular focus on health reform like we had in 1991-94, but it will certainly be a big topic for the President, the Congress and the Country, and as Dr. Blumenthal noted (and I wrote last month), the economy will be a major influence on public and private health reform discussions and actions.

What do you think will happen, and when?

Cost Containment
Controlling Healthcare Costs
Reducing Health care Spending
Eliminating Waste, Fraud and Abuse
Creating More Value from Healthcare Spending
Increasing Cost Effectiveness for the Healthcare Dollar

These are the types of headlines and catch phrases that we are going to see over the next 6 months as the healthcare focus in the 2008 elections zeros in on spending and costs.

A couple of weeks ago I wrote about how the economy has become the #1 issues of concern for the 2008 elections. Because of this, costs and spending will be the major focus for the political debate about healthcare reform. The two main traction points within these political messages and speeches will be about how healthcare spending is:

• Draining resources from the rest of the economy
• Increasing the public’s concern about becoming unemployed because it could mean losing their health insurance

As CNN recently pointed out, how to actually reduce spending – or at least lower the growth rate for spending – is the $2 Trillion puzzle. One of the harsh realities is that there is often very little connection between a candidate’s proposals for solving a problem and their ability to actually use those proposals to address the problem – because either the solutions won’t do much, or the politics won’t let them implement their proposals. As H.L. Menken said, “For every complex problem there is an answer that is clear, simple, and wrong.”

While each of the three remaining major candidates’ healthcare proposals has been widely discussed, it will be informative to see how they reposition themselves around reducing costs and spending. The Democratic candidates in particular have focused on increasing coverage, so how they add to or modify their positions will be particularly interesting to see.

It will also be worth watching how different advocacy groups position themselves along the continuum from increasing access to controlling spending ­– and what their proposals actually say.

For example, I noted an ad from the American Medical Association (AMA) that ran in the National Journal a couple of weeks ago, (and I presume in other policy oriented publications), that laid out 4 things they support for “controlling rising healthcare costs”:

1. Disease prevention and wellness programs
2. Comparative effectiveness research
3. Eliminating excessive administrative costs
4. Value-based decision making

These all sound good, but how effective would they be to actual control rising healthcare costs? This obviously would depend upon what time frame you’re using to measure costs, and whose costs you’re measuring. Nevertheless, Professor Stuart Altman – one of the very best health policy people I know – last fall laid out in ranked order ways to limit the growth in health spending. (See page 41 of his presentation) According to his assessment, the effectiveness of the AMA’s proposals range from “Very Limited Impact” for #1, to the better end of “Limited Impact” for #2 and #3, and possibly “Greater Impact” for #4, but I’m not really certain what the AMA means by “Value-based decision making,” because value to whom is always an important question.

Before I leave this issue (for now), I also want to point out that one of the easiest political message points in this area is to propose “reducing waste, fraud and abuse.” Since nobody is for “waste, fraud and abuse” this has great traction with voters, but it is important to remember that eliminating any part of the up to 50% of healthcare spending that is estimated to be wasted, is a lot harder than it sounds for two fundamental reasons. First, these waste calculations often don’t account for the healthcare delivery system’s need for “surge capacity.” For example, rarely do hospital emergency rooms run at truly full capacity, but they need to be staffed most of the time to do so, since emergencies aren’t planned and their treatment can’t be rescheduled for a slower time. Second, what may be considered waste in one analysis is generally someone’s salary, and is represented by an advocacy organization that will resist efforts to reduce the size of their piece of the pie.

I have a friend who thinks that the situation has gotten so bad that the political barriers to a single-payer healthcare system will be breached - since that’s the “best” way to control costs – and that’s what we’ll have in a few years. I don’t agree with his perspectives, and think we’ll have continued rationale migration towards a more efficient and coordinated system – particularly once the economy picks up again.

What are your favorite proposals for reducing healthcare spending?

A year ago the hype in healthcare was about state-based reform initiatives. Massachusetts was implementing its law, and several other states - including California - were considering their own proposals for increasing insurance coverage as a first step towards universal coverage and cost containment.

How things have changed in a year. Not only has California’s initiative crumbled under the expected costs to employers, but the economic downturn has undercut states’ healthcare expansion ideas, and may force them to cut back Medicaid enrollment and/or services. This week’s National Journal has an article titled “State’s Rapidly Shifting Gears,” that discusses these and other issues, including how a few years ago states cut their Medicaid payments to providers, so that on average Medicaid pays physicians 69% of Medicare levels, and how pending Federal Medicaid rules and proposals would reduce funding for State Medicaid programs making it difficult for states to reverse these payment reductions.

The importance of our current economic uncertainty for health reform initiatives is tremendous. Consider the following facts:

• Massachusetts’ Medicaid waiver is up for renewal this summer. If this isn’t successfully negotiated and renewed, it could mean the collapse of the state’s insurance expansion program - which is already running well over budget because of underestimates of the number of uninsured who would enroll.
• As the economy falters, not only do more people end up out of work, but they also end up uninsured - with about 40% of them enrolling in Medicaid or SCHIP.
• Medicaid costs represent about 20-24% of state budgets, and 49 states have requirements for balanced budgets.
• National Journal’s poll of political insiders (April 12th issue) showed that 83% of Democrats and 79% of Republicans believe that the economy is much more important issue national security for the 2008 presidential election. AND, these percentages are WAAAAY up from November 2007, when they were only 35% (D) and 34% (R), and national security were deemed more important at 56%(D) and 59%(R).
• The Kaiser Family Foundation’s analysis of public opinion polls found a similar dramatic rise in voters’ interest in the economy as an issue for the 2008 campaign:

The key factors that I believe will determine the fate of health reform intiatives over the next several years are:

• How deep the economic downturn goes
• How long it lasts
• What actions the states and the Federal government take to preserve or dismantle the healthcare delivery, financing and public health systems
• When the economy rebounds, how well prepared the states and the Federal government are to pursue health reform initiatives, and what resources are available for these initiatives

The economic drain imposed by the ongoing conflicts in Iraq and Afghanistan, and the inflationary ripple rising energy costs are sending through the world economy are also factors that may very well undermine anyones ability to expand coverage, while at the same time, increasing incentives and efforts to control healthcare costs.

As Homer Simpson might paraphrase James Carville from the 1992 Presidential campaign, “It’s the Stupid Economy.”

Like many complicated problems in the US healthcare system, setting a goal can be easy, but achieving it can be hard. In recent years there has been a number of proposals for increasing the use of primary care clinicians to help patients with chronic diseases (like diabetes) manage their care and avoid long-term complications - and to presumably lower long-term healthcare spending. For example, the “Patient Centered Medical Home” proposal supported by a dozen organizations, (including companies and family practice and pediatrics associations), doesn’t specifically use the term “primary care,” but it gets to the same result - heightened relationships and communications between patients and a particular clinician or clinic. This .

Increasing the use of primary care clinicians is a great concept, but as has been seen in Massachusetts, increasing relationships between primary care clinicians and patients often runs into a wall when you improve insurance coverage. A recent New York Times article reported on what people here in Massachusetts have been talking about for some time: Before the start of the Massachusetts insurance expansion program there were parts of the state where it was hard to find primary care doctors taking new patients. Now that the program has expanded insurance coverage to about 340,000 more people, it has gotten really hard - particularly in Western Massachusetts. (A friend of mine moved to the most Western part of the state last summer, and almost had to go 90 minutes to Hartford, CT to find a primary care doctor.)

The options for increasing the number of primary care clinicians have both logistical and cultural challenges: Training more physicians takes many years, and as the Wall Street Journal on-line reported, until a few years ago, it had been 30 years since a new medical school granting the MD degree had opened in the US. (Several new osteopathic medical schools have opened.) Another option is retraining specialized physicians to practice primary care. This not only takes time for the retraining, but almost invariably, the potential income from practicing primary care will be less than practicing in a specialty area - which is why physicians aren’t lining up to go back into primary care.

The cultural barriers to increasing the supply of primary care clinicians involve biases that vary in different parts of the country towards osteopathic physicians (ODs DOs) and foreign born physicians, as well as against physician assistants (PAs), and nurse practitioners (NPs). Too many patients - and particularly around places like Boston - want to see an MD that trained at an Ivy league medical school and hospital. (Having graduated from an Ivy league medical school, I can tell you that’s a credential which alone is certainly not a perfect measure of a clinician’s quality.)

Another interesting proposal has been raised in the United Kingdom, where according to the Financial Times, the UK’s National Health Services wants to start having pharmacists provide some primary care services - “pharmacists prescribing drugs and administering tests for minor ailments will free up time for family doctors.”

Of course what this all comes down to is money. The UK pharmacists welcome the proposal, as long as it is backed up with funding to pay them for their increased work. And with the battle over Medicare payments to physicians looming with the 0.5% increase in the Sustainable Growth Rate set to expire at the end of June, (and then revert to the default formula’s 10.1% reduction), it would be nice if Congress (or Medicare itself) could weigh into this policy problem and adjust how they pay clinicians to increase incentives for primary care services. However, my understanding is that Medicare still pays according to the type of service (e.g. intermediate office visit), without regard to the type of physician (e.g. primary care or specialist).

So my conclusion is that while money seems to be a driving force behind the primary care clinician shortage, there needs to be some more good thinking about how to redirect money to increase the supply and availability of primary care, as well as how to use other forms of influence to address some of the cultural and logistics problems keeping the functional supply of primary care clinicians smaller than it could be.

Any ideas? Criticisms? Rants? Raves?

Culture change is one of the core messages of a book I’m working on, so I was interested to see an article about “cultural transformation” in Modern Healthcare by John Mitchell, CEO of Harbor Community Hospital in WA.  He notes that there is frequently a disconnect between a hospital leader’s stated goal of wanting to create a great culture and their actions: Retaining a central command and control structure does not empower people, and forcing solutions onto hospital staff who feel uninspired to excel will not produce sustainable improvements. Rather cultural changes leading to improved quality and reduced costs requires the leader to inspire the staff to perform while also empowering them to achieve shared goals.

He lays out four components for creating cultural transformation, and my interpretation of those components are:

1. Get help - A leader can’t do something this fundamental alone
2. Be ready to change - Create internal teams that fosters champions and an inclusive process
3. Budget - Culture change is an investment in the core competencies of the organization
4. Hold everyone accountable - Voluntary compliance without accountability will not produce changes

John Mitchell reports that changes in his hospital have turned a $1M/month deficit into a $1M/month profit, and greatly improved their quality scores, employee and patient satisfaction levels, and on-site reviews by JCAHO and others.

One difference between John Mitchell’s observations and my prescriptions are their scope: He focuses on hospitals, and my work encompasses all types of healthcare organizations and stakeholder groups.  Specifically, Part Four of my book looks at how to use social and economic forces to solve cultural problems by fostering champions, creating inclusive process and targeting economic incentives. The goal of these actions is to create healthcare cultures within organizations and systems so that the behaviors and actions of individuals and organizations are directed toward outcomes related to system-wide value as opposed to only benefiting the individual or the single organization.  Creating such a culture - along with making synergistic structural changes - can produce healthcare systems that provides higher quality care at lower costs, and are prepared to efficiently continue to improve and adopt value-producing innovations.

While John Mitchell talks about his success in turning around the economics for his hospital, I am always curious to learn more details:  Did they improve their finances by reducing costs? Improving efficiency? Increasing revenue with better/more accurate billing, or from increasing patient volumes? And what have been the effects on the region’s healtcare system? Are other hospitals in the area losing patients to Harbor Community Hospital, and are they now running deficits?

It reminds me of the story about the person who says that because of a hospital’s poor reputation they, “wouldn’t be caught dead in that hospital.” While a reputation like that certainly doesn’t help increase the hospital’s revenues, if the hospital actually has sub-par quality and only fixes their reputation and not their underlying problems, their finances could improve while overall healthcare costs would go up, and quality of care might actually go down.

Any thoughts or insights into culture problems or changes at healthcare organizations and how it relates to improving quality or reducing costs?

The National Federation of Independent Businesses (NFIB), just launched their health reform campaign called Solutions Start Here. Their 10 small business principles for healthcare reform includes:

Evidence-based:
The healthcare system must encourage consumers and providers to accumulate evidence and to use that evidence to improve health. Appropriate treatment choices and better wellness and preventive care should be key outcomes.

Current information and decision systems make it difficult to accumulate, interpret and use evidence affecting treatment decisions. One result is overspending on treatments and underspending on prevention. Decision-makers must understand the impact of their decisions on both costs and outcomes. Such an understanding must be based on solid clinical and economic evidence.

(The NFIB’s other 9 reform principles are Universal, Private, Affordable, Unbiased, Competitive, Portable, Transparent, Efficient, and Realistic.)

As I’ve said before, evidence-based medicine is great in theory, but like a lot of good theories, it can go sour in practice. Thinking about the NFIB’s membership and how they might do business based upon evidence-based value of their products and services, selling undercoating for automobiles came to mind. I’ve been told that buying this dealer sprayed on stuff (versus what’s applied at the factory before the car gets trucked hundreds or thousands of miles to you) is a waste of money - and of course getting undercoating applied to used cars makes even less sense.

Applying evidence-based standards to many products and services would be great, but it could also drive many small businesses into bankruptcy - because either the evidence shows there is no value, or the business isn’t big enough to pay for the research to generate the evidence. Of course I realize that healthcare companies are generally not small businesses, but the same principles of investing scarce resources should apply - What goals are we trying to achieve (improve quality? control costs?); How much are we going to invest in a particularly project or problem area (both dollars and experts’ time that can only be used once); What are the expected returns towards our goals from those investments, and how are we going to measure that progress? Many of these questions seem to remain unanswered in the healthcare debate, and in the push for more “evidence-based” medicine.

Any other thoughts on EBM?