privacy

Privacy Policy for www.health-999.blogspot.com/

If you require any more information or have any questions about our privacy policy, please feel free to contact us by email at kangbri.sikbri@gmail.com.

At www.health-999.blogspot.com/, the privacy of our visitors is of extreme importance to us. This privacy policy document outlines the types of personal information is received and collected by www.health-999.blogspot.com/ and how it is used.

Log Files
Like many other Web sites, www.health-999.blogspot.com/ makes use of log files. The information inside the log files includes internet protocol ( IP ) addresses, type of browser, Internet Service Provider ( ISP ), date/time stamp, referring/exit pages, and number of clicks to analyze trends, administer the site, track user’s movement around the site, and gather demographic information. IP addresses, and other such information are not linked to any information that is personally identifiable.

Cookies and Web Beacons
www.health-999.blogspot.com/ does use cookies to store information about visitors preferences, record user-specific information on which pages the user access or visit, customize Web page content based on visitors browser type or other information that the visitor sends via their browser.

DoubleClick DART Cookie
.:: Google, as a third party vendor, uses cookies to serve ads on www.health-999.blogspot.com/.
.:: Google's use of the DART cookie enables it to serve ads to users based on their visit to www.health-999.blogspot.com/ and other sites on the Internet.
.:: Users may opt out of the use of the DART cookie by visiting the Google ad and content network privacy policy at the following URL - http://www.google.com/privacy_ads.html

Some of our advertising partners may use cookies and web beacons on our site. Our advertising partners include ....
Google Adsense


These third-party ad servers or ad networks use technology to the advertisements and links that appear on www.health-999.blogspot.com/ send directly to your browsers. They automatically receive your IP address when this occurs. Other technologies ( such as cookies, JavaScript, or Web Beacons ) may also be used by the third-party ad networks to measure the effectiveness of their advertisements and / or to personalize the advertising content that you see.

www.health-999.blogspot.com/ has no access to or control over these cookies that are used by third-party advertisers.

You should consult the respective privacy policies of these third-party ad servers for more detailed information on their practices as well as for instructions about how to opt-out of certain practices. www.health-999.blogspot.com/'s privacy policy does not apply to, and we cannot control the activities of, such other advertisers or web sites.

If you wish to disable cookies, you may do so through your individual browser options. More detailed information about cookie management with specific web browsers can be found at the browsers' respective websites.

Tough Talk helps people be gentle

Some people at the University of Washington and colleagues from around the country run a wonderful website called Tough Talk: Helping Doctors Approach Difficult Conversations. They call it a "toolbox for medical educators" who want to teach about ethics and communication. Topics include:

Common teaching challenges plus tips for recovering from them • Optimizing small group dynamics • Providing effective, honest feedback • Helping clinicians develop and operationalize personal learning goals • Motivating engagement and self-assessment in reluctant participants

Look at this statement of philosophy:

Many argue that ethics and communication cannot be taught. Since these skills lie in the realm of the interpersonal, they do build on skills and practices we begin developing from our earliest interactions. However, evidence shows that practice and experience can lead to development and enhancement of these skills. This human element is where the moral work of medicine happens. We have a responsibility to attend to these skills and work to develop them, even as we strive to perfect our other core clinical skills. Quality patient care depends on it.

Teaching future medical professionals is a gift. When we interact with students, residents, fellows, or colleagues, we have many opportunities to learn and grow ourselves, in addition to promoting growth in others. We have approached this work of teaching by thinking about it as a service. We are not there to impart knowledge or impress others. We are there, working with learners, because we are genuinely interested in helping them become better doctors. Ultimately, attending to the interests of physicians-in-training will promote better patient care.

This is a nice exception from the findings made by Linda Pololi in her book about the often dehumanizing relationships among faculty in medical schools.

I was curious about how it all got started and how well it is being accepted. Here's the note I received from Kelly Edwards at UW when I asked those questions:

This project started as "Oncotalk" which has a linked site to "Tough Talk", an NCI-funded program to help prepare oncology fellows for difficult conversations with seriously ill patients. We ran two retreats a year, reaching 20 fellows each time, for four years and touched many of the training programs across the country through this program. We then received a five year grant to support a 'train-the-trainer' course to teach Oncology faculty to integrate more communication skills teaching into their clinical teaching of fellows. We have had one 20 person cohort per year for four years, and our last session is coming up in April.

Tough Talk was funded by the Greenwall Foundation and allowed us early on to study our process approach to teaching communication skills and post some teaching materials to share online. I know that our programs have impacted many practicing oncologists - and many patients in return - but we do not have specific data about the public websites that support these courses to know how many additional people find these resources.

Oncotalk was profiled in the New York Times about 5 years ago. And we have several published papers in the academic literature about our program, teaching model, and communication skills. I'd be glad to share any of these papers if you are interested.

We get emails from participants on nearly a weekly basis about how their clinical practice has been impacted by our programs. As one small sign of support, 50% of the Oncotalk alums wrote letters of support for our train-the-trainer course grant. To us, that was very moving, given how busy these oncologists are!

Other faculty-investigators involved with this program are: Tony Back (oncologist at UW, Seattle - Principle Investigator), Robert Arnold (Palliative Care physician, Pittsburgh), James Tulsky (Palliative care physician, Duke), and Walter Baile (Psychiatrist at MD Anderson). They are truly leaders in the field!

How to achieve compassionate end-of-life-care

A very special report is being released right now at the Boston Public Library from the Expert Panel on End-of-Life Care, a multidisciplinary group of 41 stakeholders, including health care professionals, service providers, policy makers, health care advocates and legislators. They were appointed by the state's Executive Office of Health and Human Services, as directed by the Legislature.

The have done very good work on an important topic. It is thoughtful, practical, and compassionate.

Here are some excerpts from the press release:

Included in the report are the Expert Panel’s professional training guidelines to assist physicians with end-of-life consultations with patients who wish to discuss advanced directives.

The panel identified several essential goals toward achieving the highest quality end-of-life care:

- Inform and empower residents of Massachusetts to understand and plan for end-of-life care;
- Support a health care system that ensures high-quality patient-centered care;
- Promote and support a knowledgeable, competent, and compassionate healthcare workforce;
and
- Employ quality indicators and performance management tools to measure results.

I really like all these, especially the last one. Like all process improvements, if you don't measure, you don't achieve. I also like that the report talks about guidelines, clearly being sensitive to the preogatives of doctors and nurses in their relationships with patients.

Notable quotes from two fine people:

"Any health care system should help doctors and other caregivers ensure that patient's wishes are understood and honored, perhaps most of all in the last phases of life," said Dr. Lachlan Forrow, Director of Ethics Programs at Beth Israel Deaconess Medical Center.

“Meeting with residents throughout the state, it is clear to me they want to talk about ‘a good death,’ and how will we respect and honor their wishes at the end of life," said Jim Conway, Senior Fellow at the Institute for Healthcare Improvement. "Implementing systematically the report’s recommendations will go a long way to ensure we, as a community, do that in partnership 100% of the time.”

Why cognitive specialists lose out

His father is a cardiac surgeon. His mother is an internist.

The little boy, aged 3 1/2, is asked by his girlfriend(!), "What do your parents do?"

"My father is a surgeon. He saves people's lives. My mother is just a regular doctor."

Father shamelessly promotes Florida performances

For those readers in the Tampa area, here are surely excellent performances at the New Seeds Festival on March 19, 25, and 26th.

Cars, planes, and trains. And later, there are the doctors.

I have great admiration for the Massachusetts Health Quality Partners. The mission is sound, and the organization uses what exists to good purpose.

But this post is about what exists, and it is not good enough. MHQP just published its annual review of primary care practices in the state, available here. You would like to think that you could use the information provided to conduct a comparative review of your MD's practice group compared to others, looking at compliance with generally accepted guidelines.

But you can't. Why not? Because the data are old.

If you review the report's technical appendix, you find that "This report provides information on the 2009 performance of Massachusetts Medical Groups on the selected HEDIS® Measure Set. ...The measurement periods vary somewhat by measure, but in general, HEDIS® 2010 measures report on performance during calendar year 2009."

What would be really useful is current information.

The data for this report come from the five major Massachusetts health plans. I have heard over and over from these insurers about the advanced information systems they have in place. So why does it take so long to collate rather simple data from that which was collected well over a year ago?

In contrast, let's look at the currency of the auto repair data provided by Consumer Reports. Here's how they do:

All our reliability information is completely updated annually. We begin sending out each year's survey in the spring. By late summer, we have collected and organized responses, and we complete our analysis and update the information online by late October. The new information first appears in print in the Consumer Reports Best & Worst New Cars, on newsstands in mid-November. ...All reliability information we publish is based on subscribers' experiences with cars in the 12-month period immediately preceding the survey.

How about airline on-times rates? Collected monthly, reported within three months. Curious about annual figures on that metric, but also many other quality metrics that might influence your choice of carriers (flights cancellations; chronically delayed flights; causes of delays; mishandled baggage; bumping; incidents involving pets; complaints about service; complaints about treatment of disabled passengers; discrimination complaints? Within two months of the end of the year.

The Boston transit system -- not always viewed as the paragon of efficiency! -- on-time rates? Monthly, published within weeks.

Don't you think we deserve more timely information about the quality of our primary care group than we can get about cars, airplanes, and commuter rail?

Patient and Family Advisors on WIHI

Health Care’s Newest Improvers: Patient and Family Advisors
Thursday, March 10, 2011, 2:00 PM – 3:00 PM Eastern Time

Guests: Kristine White, RN, BSN, MBA, Vice President, Innovation and Patient Affairs, Spectrum Health System
Cindy Sayre, MN, ARNP, Director, Professional Practice and Patient and Family Centered Care, University of Washington Medical Center
Dorothea Handron, EdD, APRN, Faculty Emeritus, College of Nursing, East Carolina University; Patient-Family Advisor, University Health Systems of Eastern North Carolina
Brandelyn Bergstedt, Coordinator, Patient and Family Advisor Program, Evergreen Hospital Medical Center
Martha Hayward, Executive Director, The Partnership for Healthcare Excellence; Founder, Women’s Health Exchange; Member, Dana Farber Cancer Institute Patient Advisory Council

Not that long ago, Patient and Family Advisory Councils (PFACs), where they existed at all, were pretty much concentrated in children’s hospitals. We have these pediatric pioneers to thank for their courage and for laying the groundwork for what’s now becoming a new standard for all hospitals that are serious about patient safety and better patient care.

As PFACs gain traction and acceptance and respect, the myriad of initiatives that their members have undertaken across hospital departments is truly mind boggling. That’s just one reason WIHI Host Madge Kaplan hopes you’ll tune in to the program on March 10. Kristine White, Cindy Sayre, Dorothea Handron, Brandelyn Bergstedt, and Martha Hayward are going to describe what it’s like to engage with board members, be part of teams to redesign physical space, round with health care providers, rewrite educational materials, and much, much more. As leading patient advisors, all five guests also have valuable wisdom to share about what makes for an effective PFAC, what sort of homogeneity and heterogeneity matter, how to establish ground rules for members, and how to become more knowledgeable about quality improvement.

In Massachusetts, the creation of PFACs is mandated through legislation. But the best reason to collaborate with patients and families at your organization is because of the perspective anyone who receives care brings to the table. In other words, the most complete team to drive change at your facility is one that includes patients and families.

To find out why, to add to the picture, or to get some tips on how to start a PFAC, please join this next WIHI. Encourage a colleague or two to sign up as well!

To enroll, please click here.

Observations about the Israeli health care system

As I share this view from my room in Tel Aviv after leaving the conference in Haifa, it is a good chance to consider the features of the Israeli health care system and draw some comparisons with that of the US. You can find a full description here, but let me hit the highlights as I understand them, based on discussions over the last two days.

Israel has had universal coverage for many years. It is provided by four HMOs, one with about 55% of the market, another with 20% or so, and the remaining two splitting the rest. The competition that exists is not based on price. Indeed, the cost of care is covered by a payroll tax and other government funding in the form of a capitated payment to each HMO based on enrollment. People are free to shift from one HMO to another as often as every two months, but only a very small percentage (well under 2%) shift each year.

Supplemental insurance, privately paid, is also available. However, the basic coverage offered to the population is very inclusive, and the supplement is for the small number of elective items that are not of great interest to most people.

The HMOs offer a strong primary care network and then contract with the hospitals for secondary and tertiary care. Some hospitals are owned by the HMOs, but many of the patients go to hospitals that are not owned by the HMOs. These are either government owned or are private, non-profits.

Now, as we explore transactions among these entities, it gets interesting. What is the process by which the rates for the government hospital are set with the HMOs, for the services purchased by the HMO out of its capitated budget? This is a negotiation in which the government is a participant. But recall that the government also owns those hospitals for which it is negotiating the rates with the HMOs. The HMOs are not permitted to joint together to negotiate with the government.

The government has also established uniform salaries that can be paid by HMOs to their executives and doctors. Even accounting for exchange rates and different standards of living, the salaries paid to doctors are well below those in the US. This is possible, in part, because the cost of medical education is highly subsidized by the government.

Finally, if any of these institutions -- government hospitals or HMOs -- runs a deficit, the finance ministry makes up the losses.

For those in the US hospital and physician practice world who are aghast at the idea of rate-setting, you find it here in a very interesting form. In essence, there is little in the way of market forces in place determining the level of financial transactions within or among the major entities providing health care services. And, the whole system is subject to a budget that is set, directly or indirectly, by the parliament.

Regular readers may recall observations I made a few years ago about the Icelandic health care system. There, too, the annual national budget for health care, as a percentage of GDP, was set by the parliament. I asked my Icelandic hosts the following questions and derived a conclusion:

Is this percentage based on a quantified assessment of the actual health care needs of the public, i.e., is it driven by public demand (e.g., a growing aging population)? No. Does it take into account the government's expectation for certain quantifiable levels of service quality, medical quality, or operational efficiency of hospitals and other parts of the system? No.

In essence, this appropriation by the parliament is a politically derived decision, just as it would be for any appropriation for a program of important national priority, and it therefore competes with other worthy national programs for resources.

Such is the case in Israel, too.

It is instructive to compare the differences among these systems, and it is worthwhile to understand the trade-offs that have been made in each political jurisdiction. There is no right or wrong way to do this. The system in each country is a composite societal judgment call.

It is important to recall, though, that all developed countries face similar structural challenges for the future: An aging population that is living longer and demanding more in the way of hospital service; a rapid introduction of technological innovation in diagnosis and treatment that tends to increase the cost of health care; a greater expectation on the part of the public of the "rule of rescue," i.e., devoting more and more resources to the more unusual, but emotionally charged, medical conditions; and a growing base of consumers/patients who are better informed through social media and who therefore have higher expectations of the services provided to them.

These trends intersect with the ability of a society to pay for them, and the bulls-eye for that intersection will be the hospitals. Why? Hospitals are capital-intensive and staff-intensive organizations. In essence, they are characterized by large fixed costs or by variable costs that are hard to vary very quickly. In competing for business, hospitals are prone to engage in the "medical arms race," prompted by their doctors, companies who cleverly market expensive devices and equipment, and ultimately by patients who want the latest and best -- even if clinical efficacy has not been demonstrated.

Hospitals also often have an overlay of responsibility for medical education, the costs of which cannot be easily shed, and many also engage in research for which they are not fully compensated.

In contrast, the HMOs in Israel or the multi-specialty physician practices and primary care groups here in the US have the most potential to change their ways of delivering service to get ever more clinically effective and cost-effective. For one thing, they are not burdened by high levels of fixed overhead. For another, they are better situated to use technology to deliver care more efficiently. For example, they can start to use home-based, remote reading devices to check on a congestive heart failure patient's weight and other vital signs -- or they might use other types of remote testing devices to review a diabetic patient's blood levels and other metrics. These technologies, in the hands of primary care doctors, will enable patients to get the care needed in a low-cost setting and help avoid hospitalization.

The hospitals that succeed in the future will need to do everything possible to avoid incurring large increments of capital expenditures. To do that and otherwise minimize cost increases, they will also have to learn to engage in front-line driven process improvement (whether of the Lean variety or something else) to redesign their work flows. A strong emphasis on quality and safety improvement will also be a virtue rewarded over time. These latter steps do not happen without a strong commitment to transparency: You can't improve unless you acknowledge where you are failing.

Mideast drama

A storm passes through Haifa this morning (posted at 6:45 Israel time on March 9).

Hospital Governance Issues in Israel

I am currently in Haifa, Israel, addressing a conference being held by the Israel National Institute for Health Policy Research entitled "Governing Hospitals." Here's the summary of the program:


As explained here, Israeli hospitals come in several varieties. An excerpt of the context:

Israel has a national health insurance system that provides for universal coverage. Every citizen or permanent resident of Israel is free to choose from among four competing, non- profit-making health plans. The health plans must provide their members with access to a benefits package that is specified within the NHI Law. The system is financed primarily through taxation linked to income (through a combination of earmarked taxes and general revenue). The Government distributes the NHI funds among the health plans according to a capitation formula which takes into account the number of members within each plan and their age mix.

The Ministry of Health has overall responsibility for the health of the population and the effective functioning of the health care system. In recent years the Ministry has developed strong capabilities in the areas of health technology assessment (HTA), the prioritization of new technologies, health plan regulation, quality monitoring for community-based care, and strategic planning to set goals for population health, along with strategies for achieving them.

In addition to its regulatory, planning and policy-making roles, the Ministry of Health also owns and operates about half of the nation’s acute care hospital beds. The largest health plan operates another third of the beds, and the remainder are operated by means of a mix of non-profit-making and profit- making organizations.

As you might expect, therefore, the questions of hospital governance in this country are complex and multivariate. It is impressive, therefore, that this conference was organized to provide the leaders of the hospitals with a chance to join together and consider future directions.

Speakers included Richard Saltman, from the Department of Health Policy and Management at Emory University, and Dr. Antonio Durán, from the Andalusian School of Public Health in Sevilla, Spain. You see them here with one of our hosts, Schlomo Mor-Yosef, Director General of the Hadassah Medical Organization. Nigel Edwards, from the UK's NHS, was supposed to attend but got busy with the issues mentioned above and sent a video of his remarks.

Professor Saltman summarized European efforts to restructure how public hospitals are governed. Starting with the introduction of self-governing trusts in England in 1991, policymakers in a number of countries have sought to design more independent decision-making capacity into public hospitals. The goal has been to generate more innovative and entrepreneurial behavior, while simultaneously preserving the social advantages that accompany publicly operated institutions.

Dr. Durán discussed the Spanish experience, noting that the country has explored various hospital self-governance arrangements over two decades. It has done so, however, via ad hoc, politically-driven, last-minute legislation, resulting in a confusing regulatory framework, with national and regional norms superseding each other. Various self-governing hospitals with different ownership status, legal characteristics, and degrees of autonomy and accountability now co-exist with traditionally managed public hospitals.

My talk was on the evolution of governance of US hospitals from a traditional focus mainly on financial management to an expanded view of a board's fiduciary responsibility, with a concern for issues of quality, safety, and efficacy of clinical care. My theme was that a well-functioning governing body can enable hospital leaders and management to harness the experience, wisdom, and judgment of members of the community to build a stronger hospital.

By the way, someone pointed out today that there is no Hebrew word for governance, making it an elusive concept here, perhaps culturally as well as linguistically. This suggests that some degree of flexibility will characterize the evolution of this concept in this country. But let's not be purists about this. After all, even in other parts of the world where governance is clearly part of the vernacular, it is not universally well executed. This conference suggests that we all can learn from one another.

Why do we need a regulatory crosswalk?

In a post below, I talked about the unfortunate marketability of a book that explains The Joint Commission standards in plain English -- both for the hospitals it surveys and for its own surveyors. Now arrives another email with an ad for a $399 service called Patient Safety Monitor, that, among other things, allows you to:

Find and compare state, CMS, and Joint Commission regulations on high-profile patient safety issues such as:

• Verbal Orders;
• Critical Test Results;
• Handoffs
• Infection Control: Hand Hygiene

I don't want to get into the issue of state regulations today, but the idea that you might pay for a service to provide a "crosswalk" to help you reconcile CMS and Joint Commission regulations is troubling.

The CMS Conditions of Participation are basically the terms that make a hospital eligible to see Medicare patients, and by extension, other patients whose bills are paid by private insurers. In essence, you can't stay in business as a hospital if you do not satisfy the Conditions of Participation.

The Joint Commission has been delegated "deeming authority" by CMS to review a hospital's compliance with the Conditions of Participation.

So should there be any difference between the reviewing standards of the JC vis-à-vis that of CMS? If there is no difference, why is this service being sold? If there is a difference, we have a troubling difficult situation.

The advertised service, by the way, also provides updates in a Patient Safety Monitor Journal of new developments in regulatory review standards. As in the previous post, I wonder why there is a need for a commercial product to offer such advisories. Don't CMS and The Joint Commission offer plain English advisories and interpretations of their own regulations?

All of which reminds me, while we are at it: Whatever became of the idea of The Joint Commission making its library of best practices open to the public? Why doesn't CMS require it as part of the delegation of authority? After all, the JC acquires this information as part of its surveying function. In that sense, it should be public information, like other government sponsored work.

In good company

Just in case you thought it was just the United States health care system that is facing financial issues, here comes this story about the British system from today's Financial Times: "Reforms of NHS take back seat to cash fears." (Sorry, I can't find a link to the story.) Here's the lede:

Health bosses are far more worried about keeping control of the NHS finances over the coming year than they are about implementing the government's sweeping reforms, warns the NHS confederation, the body that represents health authorities and trusts.

And later in the story:

[S]aid Nigel Edwards . . . "We are already picking up worrying signals from a number of hospitals and primary care trusts about significant money pressures emerging -- and this is before the challenging rigours of next year's tight financial settlement."

After years of sustained growth, the NHS faces a real-terms freeze in spending for the next four years.

. . . The service is being asked to make £15bn to £20bn of efficiency savings by 2014 at the same time as administrative costs are being cut by a third and management costs by 45 per cent.

It is no surprise that these pressures are emerging. The same demographic, technology, and patient care issues exist throughout the developed economies.

What is sadly surprising is that, whether in the US or elsewhere, there seems little coordinated interest in the use of process improvement to redesign work in the health care environment, which would improve quality and safety and also garner financial savings. Why can't the lessons of Spear, Toussaint, and Kaplan take hold?

Wanted: New, unblinking eyes

An op-ed by Joseph Hallinan in the New York Times discusses a form of cognitive error that is worth considering in the health care environment.

Goldovsky’s experiment yielded a key insight into human error: not only had the experts misread the music — they had misread it in the same way. In a subsequent study, Goldovsky’s nephew, Thomas Wolf, discovered that good sight readers report that they do not read music note by note; instead, they rely on their recognition of familiar patterns and on their ability to organize the music into those patterns and dependable cues.

One day, a student of his was practicing a piece by Brahms when [Boris] Goldovsky heard something wrong. He stopped her and told her to fix her mistake. The student looked confused; she said she had played the notes as they were written. Goldovsky looked at the music and, to his surprise, the girl had indeed played the printed notes correctly — but there was an apparent misprint in the music.

At first, the student and the teacher thought this misprint was confined to their edition of the sheet music alone. But further checking revealed that all other editions contained the same incorrect note. Why, wondered Goldovsky, had no one — the composer, the publisher, the proofreader, scores of accomplished pianists — noticed the error? How could so many experts have missed something that was so obvious to a novice?

. . . In short, they don’t read; they infer. Moreover, this trait is not unique to musicians: pattern recognition is a hallmark of expertise in any number of fields; it is what allows experts to do quickly what amateurs do slowly.

Goldovsky’s insight offers a useful metaphor for understanding the crisis on Wall Street: Not only did hedge-fund managers, bankers and others misread the danger involved in many of their investments, but they misread them in the same way.

The author's conclusion: "These types of errors are most likely to be discovered by those who, like Goldovsky’s young student, look at the world with new, unblinking eyes."

In an earlier post, I discussed forms of cognitive bias that have been documented by psychologists and neurologists. Also, you may recall this presentation by Pat Croskerry about intuitive decision-making, and the "cognitive miser function," a tendency to get comfortable with the form of decision-making that you find most used and useful.

The application of these thoughts to process improvement in the health care setting is obvious. It is very difficult to overcome cognitive biases in the delivery of clinical care, especially when the field remains such a cottage industry, in which in which each person is expected to be an artist, relying on his or her creativity, intuition, and experience when taking care of a patient. The resulting lack of standardization -- the high degree of practice variation -- creates an environment that is inimical to process improvement based on scientific methods.

But I wonder if the some of the same types of biases are spilling over into the business aspects of hospital finance, too. In Hallinan's words, "It may be too much to suggest that we let adolescents run Wall Street.... But it wouldn’t hurt to let them check the math." Maybe it is time for some "new, unblinking eyes" among business reporters.

Essays from Ernie's students - 1

Some of you will recall that about a month ago, I gave a guest lecture at Ernst Berndt's course at MIT's Sloan School, entitled "Economics of the Health Care Industries," and gave the students this essay assignment:

First, read this blog post. Then, the question is: What methodology would you propose for the allocation of an annual global payment, to divide it up among primary care doctors, community hospitals, tertiary hospitals, specialist doctors, nursing homes, etc. -- all of whom are involved in caring for a given population of patients? How would you make the transition from the current fee-for-service approach?

Those in the field will grasp the difficulty of this assignment, and it may have been unfair to pose it at the beginning of the semester. But, hey, these are MIT students, and so we should expect a lot. I said I would post the best answers, and I start with this entry. I don't have room for the entire essay, so I will take excerpts. Others will follow in three separate posts.

The first is from Joshua Copp. Feel free to offer your grade and observations, as if you were his professor, in the comment section below. Here is the excerpt:

Examining the costs in order of priority for payment, we would need to start by paying for any materials consumed in the care of the patient. Think of these as the direct costs for treating a patient...

Following direct material costs, a fixed payment will have to be negotiated between physicians groups and care centers. This contract between the physician group and the hospital or nursing home would be very similar in nature to the contract between BCBS-MA and BIDPO...

Base compensation will be a difficult policy to establish, but it is the final cost before considering any efficiency gains or bonus payments. In order to set base salaries, the physician work relative value unit established by Medicare will be the most objective and accurate way to account for training requirements, skill, and time needs. Initially, using a weighted average RVU for each specialty group (cardiologists, nephrologists, orthopedic surgeons, etc) multiplied by the PCP base salary will set that group’s base salary.

The PCP base salary is the compensation level corresponding to an RVU equal to one. For example, if a PCP base salary is $100,000 per year, and the average RVU for nephrologists is 1.2, then a nephrologists’ base salary would be set at $120,000 per year. An inherent assumption for base compensation is that the number of specialists relative to PCP’s will likely decline under the AQC in equilibrium.

Now we must consider how efficiency gains by physicians and quality bonus payments are allocated. First, with efficiency gains, this should tie directly into the direct material costs associated with patient care, and therefore one should be able to tie gains directly to physician groups. For example, if the orthopedic surgeons identify a lower-cost knee implant that saves $500 per implant, then the total savings should be allocated to the orthopedic group. However, to ensure that the least efficient groups are not being over-compensated, target efficiency gains should be normalized across all provider groups.

The next consideration is how to handle quality of care improvements. Specifically, this is targeted at the additional 10% payment available upon meeting certain quality benchmarks for the contract as a whole. First, because the hospital influences the metrics used for bonus payments, the fixed payment contracts established with the care centers should include bonus payouts if the hospital meets certain quality standards. Further, payments to the hospital should be tied to the total AQC bonus payment, ensuring that bonus payments to hospitals only happen when quality benchmarks were met by all, not just the hospital.

In order to tackle the bonus payments to physicians, consider first only those group practices which as a whole delivered on their quality improvement metrics. For those groups, the bonus payment should be divided evenly across each division, and no bonus is paid to groups who, as a whole, did not meet the improvement threshold. The next layer is the individual physician within those groups that improved. For the individual physicians, only those which delivered on their quality levels will be awarded a bonus, evenly split across all physicians who delivered on quality of care. Therefore, an individual’s ability to receive a bonus is directly tied to the ability of the team to gain a bonus, reinforcing the teamwork necessary to develop an efficient system.

The final consideration with bonus payments and incentives is how they fund and support the overall mission of the physician organization and provider network. Thinking specifically in the case of BIDPO, this is an academic institution that has a large teaching contingent. Therefore, in order to support their mission of research and instruction, all bonus payments should be ‘taxed’ at an appropriate rate each year before any distributions are made. For example, if BIDPO received $100 million in care quality bonus payments, then 30% of this is automatically set aside to fund research and training, before any consideration is given to group payouts. This tax would be used to fund research, training and continued education across the institution.

The final consideration is how to transition from the fee-for-service model to the global payment system. Two main points need to be addressed to ensure an effective transition. First, negotiations need to begin immediately with all care centers to accurately gauge the annual effective rental expense for each center, based on the mix of procedures and usage. Second, communication with specialist physicians must begin immediately. There will likely be attrition from the specialist groups as the transition is made, and as such retaining the best trained physicians will be imperative to providing the highest quality care. The key for retaining the top specialists will be to explicitly demonstrate how they will not suffer in compensation, research opportunities, or in their ability to care for the patient.

Essays from Ernie's students - 2

Here is the second of the selected essay's from Ernst Berndt's Sloan School class at MIT. David Berlin is the author. Please submit your observations and grade in the comment section. There are three other essays.

The most complex question raised by the AQC is how to allocate the global payment among various care providers encountered by a patient. Evaluation of this question requires analysis of methods for data aggregation, a structure for determining the relative value of various services provided to a particular patient and a plan for implementing the change from fee-for service reimbursement to global payments.

The logistics for managing care under an AQC arrangement are significant. Providers are responsible for orchestrating the spectrum of care received by patients, and concurrently optimizing both outcomes and costs. The initial hurdle in achieving these goals is to provide reliable and consistent data to the primary care physician decision makers. The AQC relies on physicians adjusting to new incentives that incorporate costs. Therefore it is essential that physicians who choose where to refer patients are fully informed as to the costs of various referral options. If physicians are blinded from this cost data they cannot be expected to make rational decisions regarding the best locations to refer patients. Secondly, these physicians should be provided aggregated outcome data for referral sites. By pairing aggregate outcomes with the costs of services, physicians will be able to determine where patients will receive the greatest value. The data should be aggregated through the insurance provider, as they are a source of continuity between patients and therefore the only party that is privy to the totality of a particular patient’s care and cost tally. By aggregating this data through the insurance provider and distributing it to primary-care physicians, these physicians will be empowered to make rational decisions on behalf of their patients.

Determining the relative reimbursement for various services is also a major issue within the AQC model. Under the traditional fee-for-service model each service is independently reimbursed at pre-defined rates. However under the AQC model, a significant portion of potential revenue is realized through outcomes based bonuses. Were this bonus to be distributed proportional to a physician’s share of reimbursement for a given patient, the system would again incentivize the provision of high-cost services. Therefore providers should find a mechanism of distribution that links payment to the value of services received by a particular patient, as measured through outcomes. Within the physician practice network various specialties should negotiate their payment rates with the practice administration. This provides internal market forces that allow the individual practice network to determine the relative value of various services. Furthermore, since the primary-care physician is tasked with orchestrating the spectrum of care, they should be entitled to a more significant share of performance based payment than specialty providers.

The transition from fee-for-service to a global payment system creates significant changes in provider incentives, and therefore should be executed in a gradual manner to allow an appropriate market reaction. Initially it would be most reasonable to keep reimbursement rates at existing levels, with efficiencies being extracted through changes in referral volume. Over time in-network physician specialists should be required to negotiate with their practice administration to determine reimbursement rates. Should those services ultimately be priced at too high a level relative to the value provided to patients, one would expect the volume of referred patients to diminish accordingly as a result of changing referral patterns. If provided with adequate information regarding utilization and outcomes, practice administrators should recognize which physicians provide improved value to patients, and can subsequently allocate an increased share of overall reimbursement to these physicians. By leveraging these market forces, a system of continual improvement will be created with incentives for investment in both improved outcomes and efficiencies.

The objective of modifying physician incentives is both challenging and important for creating a sustainable healthcare system. The recent AQC contract between BIDPO and BCBS-MA provides an encouraging framework for modifying incentives to align with the overall value provided to patients. While the theoretical structure of this contract should provide both improved outcomes and restrained costs, the results remain to be seen. Among the challenges facing the AQC are questions regarding implementation, allocation of global payments, and uncertainty regarding the true impact of these changes on physician behaviors.

Essays from Ernie's students - 3

Here's the third essay from Ernst Berndt's Sloan School class at MIT. This one is by Anna Capetanakis. Please offer your observations and grade in the comments section. There are three selected essays.

Implementing such a large and different payment system will be a challenge. Multiple ideas will have to be tested on a small scale to determine the best way to divide the funds. Below are a few ideas on how to approach this issue.

One main question is how to divide the patient budget across primary doctors, hospitals, specialists, and so on. I believe the answer entails both a technological and human aspect. The technological aspect is to analyze past data to determine the historical breakdown of treatment costs per ailment. Basing it off of data will make it difficult for the various stakeholders to refute. Once the breakdown is calculated, experts from more efficient systems (for example from the European countries) would assess where cuts could be made. These new adjusted ratios would act as general guidelines for how funds per patient should be divided amongst the various caretakers. It will be critical to make the process iterative so that as costs change, the allocation of funds shift accordingly.

Despite these general guidelines, it will be important that care be determined on a per-patient basis. To do this, the hospital organization should create a group of specialist physicians who have been trained on how to optimize the care of patients within budget constraints. These doctors will act like consultants to settle dispute, help primary care physicians adapt and make decisions, and decrease the risk associated with physicians making a decision.

In addition to this team of physician experts, it will also be critical to give all primary care physicians appropriate training on the new system. Which procedures are critical and which can be avoided? How do you communicate to your patient that his requested procedure is unnecessary? How do you solve conflicts among your patients’ caretakers? These doctors will need a support network and training to address these and other questions. These doctors have become accustomed to ordering tests rather than decide based on their intuition, so they will need support to make decisions. The group of experts will be invaluable to break the primary care physicians’ habits, increase their risk tolerance, and help them share some of the risk that comes with determining a patient’s critical procedures.

Another revolutionary but potentially very rewarding solution would be to completely revamp the hospital organization. Quite often we find in the business world that companies will piece together arcane IT systems rather than create one new, overarching system, resulting in a more inefficient, cumbersome, and expensive system than if the company had just started from scratch. With respect to hospitals, the hospital organization has evolved to support the fee-for-service system. Why not completely overhaul the system? Create a central database to track all patients. Change the relationships between departments in order to increase communication. For example, for common ailments like a heart attack, have a team of cardiac team (a radiologist, a cardiologist, etc) work together on the patient – essentially realign departments according to the payment scheme. It sounds farfetched, but why not try it? There would certainly be huge organizational resistance, but as we see in business, organizational change can be painful but it can pay off too.

Essays from Ernie's students - 4

Here's the last of the four chosen essays from Ernst Berndt's MIT class at the Sloan School. As above, please offer your observations and suggest a grade in the comments below. This one was written by Ramesh Chandra. I include the entire essay, as it was the only one to include an alternative payment and patient care mechanism. There are three other selected essays.

Do AQCs solve the U.S. HealthCare System’s Woes?

1 Introduction

It is widely accepted that the U.S. health-care system is highly inefficient, with estimates of up to 30% inefficiency. The important causes of this inefficiency are considered to be: (i) fee-for-service payment methods that result in over prescription of care by doctors even when there is no significant benefit [6] (ii) lack of coordination in care delivered to the same patient by different doctors (iii) overuse of care by patients due to moral hazard, driven by the perception that more care is better care, and (iv) relatively little attention to prevention and wellness programs compared to treatment programs (also a fallout of the fee-for-service payment policies.)

One solution suggested to address these issues is to have care providers have more “skin in the game” by using global payment schemes. The idea is to allocate a fixed annual budget per patient and have the care provider manage it to deliver the care required by the patient, with bonuses awarded to the provider if it efficiently manages the budget.

In this essay, we study a specific type of global payment scheme designed by the BCBS of MA, called the Alternative Quality Contract (AQC). We look at the AQC model’s goals and analyze it to understand its limitations. We also briefly look at an alternate design, which we believe works better than the AQC in practice.

2 Overview of the AQC model

The salient features of an AQC are as follows:

1. The contract is between BCBS and provider organizations with primary care physicians (eg: HMOs, POS) for a period of five years.

2. Each patient that the provider organization provides primary care for, is allocated an annual budget. All health care expenses for the patient come from this annual budget, even if care is provided by a different organization. If the expenses are lower than the budget, the provider organization gets to keep the savings; if the expenses exceed the budget, the provider is liable for the extra cost.

3. To incentivize providers to take care of their patient’s health (and not optimize for the short term by denying care), they are paid an additional bonus of up to 10% if they hit certain health quality measures for their patients.

4. The first year’s budget is determined by the patient’s prior year’s medical expenses. The rate of increase of the budget is also negotiated based on trends.

5. Patients are unaware of whether their PCPs are part of an AQC.

The goal of the AQC is to contain the ballooning costs of health care, and it plans to achieve that by making providers more “accountable” for the costs of their primary care patients. At a high-level, it appears that the AQC’s design is aligned with its goals—Ideally, the annual budgets would motivate physicians to reduce spending on unnecessary care, while the performance bonuses would motivate them to keep their patients healthy, thereby not skimping on necessary costs.

Accountable Care Organizations (ACO) are similar in concept to the AQC, and are designed for Medicare; the main difference appears to be that the provider is not liable if expenses exceed the budget, but receive rewards for reducing costs and meeting quality improvement markers.

3 Will the AQC model work in practice?

To understand the AQC model better, let us consider a simple thought experiment. Imagine that the entire healthcare system consists of Reliable Insurance Corp. (RI) and Expert Medical Center (EMC). Let us further assume that the only illness that patients acquire is backache. EMC operates in two states, A and B, with one primary care physician and five orthopedic surgeons per state (ratio consistent with current ratios of PCPs vs specialists). Assume that 1000 patients get backache each year in each state, out of which 100 need surgery, 800 can be cured in 2 weeks by getting ergonomic chairs, and the remaining 100 are the “indeterminate” group—they can either be operated on or can be cured in 2 months by getting ergonomic chairs. A new chair costs $100, whereas back surgery costs $10K, of which $5K goes to the surgeon and $5K to EMC.

Now, to keep the example simple, assume that all orthopedic surgeons in state A recommend chairs for the patients in the indeterminate group, whereas surgeons in state B recommend surgery. Correspondingly, EMC has over the years built enough facilities to accommodate 100 surgeries in state A and 200 surgeries in state B. Thus, the total annual healthcare costs for the entire system are $3.17M, out of which $990K could be saved with no change in outcome.
Let us say RI wants to realize these savings by entering into an AQC with EMC. Would it succeed? Let us look at it from each party’s perspective. (here we assume that all parties are rational and that earned income is the motivating factor):

1. Will EMC be motivated to enter into a contract? If so, at what annual budget? Since EMC already built the facilities needed for doing 300 surgeries per year, it cannot forgo the $500K it gets for the 100 surgeries in the indeterminate group. So, it needs the annual budget to be at least $2.18M + $500K = $2.68M

2. Will the orthopedic surgeons agree to enter into the contract? If so, at what budget? The orthopedic surgeons in state B lose half their income if surgery is not done on the indeterminate patients. So, they would resist the AQC, unless their $500K of salaries is incorporated into the budget and EMC assures them that their income will not be adversely affected.

3. Will the primary care physicians want to enter into the contract? In this example, PCPs won’t see any difference to their income levels and so would be fine entering the contract. However, they may ask for additional perks to “sweeten” the deal.

4. Will RI be able to realize these savings by entering into an AQC with EMC? From the above analysis, we see that in practice, RI will not be able to realize the savings. In fact, it may cost RI more, due to the administrative overheads, and because each of the other parties may expect perks for the inconvenience of getting involved in the contract.

The above example is arguably simple, but gives a flavor of the challenges involved in implementing AQC. We believe that the points made above would hold in real world scenarios. Consider the following examples:

• It is widely agreed that there is 30% waste in the system. However, the current AQC contracts that BCBS entered into start above the current spending levels. This seems to be tacit acknowledgement that this waste cannot be recovered.

• In addition, it appears that BCBS “has offered physician groups and hospitals sky-high reimbursement rates to persuade them to sign up for a new type of health care plan," which contributed to its loss in 2009.

• Some ACO providers in Medicare “want to avoid being financially responsible for patients who go outside for care”, they want to be able to “pick and choose” patients, or have asked “to limit quality measures” [2]. All of these point to providers trying hard to protect their income sources.

The above trends validate our simple thought experiment. The take-away point is that one man’s expense is another man’s income. In other words, the waste in the health care system is income to a significant portion of the providers, and it is natural that they will only enter into contracts (or try to mold the contracts so) that their income is not jeopardized. This would run against the grain of efforts to reduce waste in the system.

There are two other issues with the AQC, which we briefly discuss below:

1. The AQC, as it is currently structured, is more of a risk-transfer mechanism from the insurance provider to the care providers. This makes the provider organizations more like insurance companies. This means that they get more complicated and they need finance/insurance personnel who can negotiate AQC contracts, purchase reinsurance, manage budgets etc., This increases the already high administrative costs in hospitals. More importantly, this further detracts hospitals and doctors from their primary job—practicing good medicine.

2. Another key issue with the AQC is the glaring lack of any role for the patient in it. The fact that the AQC participation of PCPs is hidden from patients can make them distrustful of their PCPs and the AQC model, and lead to perceptions that care would be withheld from them.

The above fundamental issues can jeopardize the success of AQC in achieving its goals, and instead result in a more expensive and more complex system, with more dissatisfaction and distrust among the different parties. Given these limitations of AQC, we believe it would have a difficult time succeeding in its current form, regardless of the allocation of resources among care providers.

4 Is there an alternative?

The AQC suffers from poor system design (as does the rest of the healthcare system), as it does not account for human behavior. Given that the current health care system is a supply-driven market, it is rather difficult to negotiate with the suppliers to agree to restrict supply, unless they are promised no reduction in profits. This fundamental conflict works against the AQC/ACO model’s goal to reduce waste.

So, what is the alternative? We look to the end user/patient for a solution — one whom the AQC model ignores. We feel that the end user is likely the only party with enough wherewithal to provide the required counterbalance to excessive supply — after all, the entire system exists for the end user. But for that to happen, we need to have informed patients who have a basic understanding of healthy living, understand how to navigate the health care system, and have the confidence to not blindly go along with whatever their doctor recommends. Let’s go through the above thought experiment again with informed patients in the mix.

Imagine that our informed patients have full knowledge of all the past procedures done by the orthopedists. It would be apparent to them that the outcomes of treatments by all the orthopedists is the same, but that orthopedists in state A do fewer percentage of surgeries than those in state B. Also, our knowledgeable patients understand that surgery can have long-term ill-effects. So, when a patient is recommended surgery by a orthopedist from state B, she would solicit a second opinion from an orthopedist from state A. If the opinion differs, she may (i) ask her original orthopedist for the reason for difference in opinion, and/or (ii) use an ergonomic chair for 2 months to see whether her condition improves. Once enough number of patients realize that they can be cured without surgery, the orthopedists in state B would be “pressured by the market and the cause of science” to revise their treatment procedure, to avoid falling out of favor of their customers (or worse to avoid getting sued). This leads to much better outcome than RI trying to negotiate an AQC with EMC. Note that the care providers are still paid on a fee-for-service basis.

So, how can RI get its users to be more informed? Here’s one potential design: RI can encourage the formation of a health advisor organization, whose sole charter is to guide consumers through the health care process and keep them healthy. RI can compensate the health advisor with a minimal fixed fee per user and tie the majority of compensation to the health care savings of its users (with compensation spread over several years and weighted by the health of its users to avoid short term optimizations). A health advisor itself does not perform any procedure and does not offer medical advice. Its users are not bound to take procedural advice it offers—the only leverage it has with its users is mutual trust. Also, to avoid conflict of interest, it cannot obtain revenue from any other sources. Given these constraints, the health advisor can only increase its revenue by (i) chasing down major waste in the system (ii) finding ways to mitigate this waste while maintaining user health (or even better, improving it, as in the case of avoided surgeries) (iii) gaining user trust, and (iv) convincing them to do things that are good for their health, which also happen to reduce waste. We can imagine several ways in which the health advisor organization can do this (collect effectiveness metrics on healthcare providers; gather scientific studies on effectiveness of various procedures; suggest users take second opinions; run ads to convince customers to practice prevention; build health IT systems to take care of customers—reminders for pills, for appointments, preventive care etc.,) If we reflect on the the above thought experiment again, it is easy to see how these steps of a health advisor would map to the actions of informed patients.

If the guidance of health advisors convinces customers to reduce consumption of health care services, that acts as a market signal to providers to throttle expansion of unnecessary services, achieving the desired result of reducing waste.

5 Concluding remarks

In this essay we analyzed AQC, a global payments proposal to contain health care costs, and show that its design suffers from a fundamental challenge — convincing suppliers in a supply-driven market to reduce their revenues. We outlined an alternate consumer-centric mechanism that instead focuses on educating and guiding consumers on how to be healthy, while at the same time reducing consumption of unnecessary medical care, thereby reducing demand. We believe that a consumer-driven approach provides the right counterbalance to the supply glut. The limited size of this essay does not permit a more detailed discussion of this approach, and the rationale behind the arguments against current approaches; however, we end with a
note on the wider applicability of the consumer-driven approach, by pointing out how it applies to the Indian healthcare scenario. The health care system in India is also increasingly suffering from a supply-driven approach. Modern hospitals are outfitted with expensive equipment, and doctors are prone to prescribing procedures to put this equipment to use. Furthermore, the fee-for-service approach leads to more focus on treatment than on prevention. Patients are typically timid, rarely question their doctor’s analyses, and do not generally seek second opinion. All this, even though most patients pay for their medical expenses out of their own pocket. We believe that a health advisor organization, as proposed above, would also work well in that scenario.

JetBlue's Dave in the air

Back in April, 2008, I wrote about JetBlue's use of homesourcing:

The idea is simple and elegant. For some staff functions, those relying mainly on computers and telephone, why not allow people to work from home and avoid the mess of commuting? Also, people who are otherwise tied to home for physical or family reasons can be active members of the workforce and get better jobs if they are permitted to work from home.

We tried a variant of this at our hospital, and while it could not be expanded to the full extent of the reservations assistants at Jet Blue, the concept showed some promise for the health care sector.

Anyway, because of this and other things, I had always admired Dave Barger, JetBlue's President and CEO. What a pleasure, therefore, to run into him on a flight earlier today and have a chance to extend my appreciation in person.

Based on my conversations with the staff, he is very well regarded as a CEO, displaying a real concern and affection for the people who work in all capacities in the firm, and joining in to help out as a flight progresses and on the ground. You see him here with Kiwi flight attendant James Harbour.

Update from Cape Verde

You may recall a post from November, in which I described a mission from BIDMC to Cape Verde. Well, I had the story a bit backwards. I thought it was initiated by the doctor, but the impetus actually came from one of our interpreters. In any event, these wonderful people together did good for the community. It is a lovely story.

Here's a video update. If you can't see the video, click here.

Time for the wisdom of the crowd

On the post below, "nonlocal MD," a regular contributor, asks:

I would next like to see a series on how you think all this could be done better, perhaps drawing on your international experiences.

And Barry Carol says:

As I understand it, the German population is generally satisfied with their healthcare and health insurance system. However, people can opt out and access more comprehensive private insurance if they want to and can afford to. About 10% of the population chooses the private system. One way or another, the wealthy and upper middle class will always be able to trade up creating, in effect, a two tier system. Personally, I don’t have any problem with that as long as what’s available to the bulk of the population is widely perceived as “good enough.”

Here is my reply, to you and to her:

Dear nonlocal,

It is not a question of doing better: It is the political imperative at work. My purpose in writing about all this was to describe the natural sequence of events.

As Barry suggests, people are generally content with this kind of system. The broad base of the population, the voters, gets security and a plan that is "good enough." The wealthy buy the "upper tier" plan.

It's the same as coach and first class on airplanes; Ford and Lexus in cars; McDonald's and luxury restaurants.

For years, we have rationed primary care in the US based on income. Now, like Europe, it will be reversed: We will ration high-end care based on income.

An underlying problem remains: There is little about the new order here in the US nor the European system that has dealt with the need to improve quality, safety, transparency, and promote continuous process improvement. And so demographic cost pressures will continue to build on both sides of the Atlantic. Governments and other payers will try to use the hammer of rates and regulatory changes to accomplish the kind of process improvement that can truly create better value for the population. That will fail. Those changes should come from the medical profession, but that profession has been recalcitrant and engaged in denial. We have seen that over and over: "The data are wrong" or "Our patients are sicker."

Changes are most likely to come as a result of strong advocacy from patients who are more and more empowered because of the internet and social media. In health care, the future is Egypt -- if and when the patient advocacy community gets its act together.

Places like Institute for Healthcare Improvement and the Joint Commission will finally succeed at their jobs when they facilitate the engagement of those thousands of people throughout the country. But you can not "own" those individuals or prescribe the approach that should be taken: You have to cede control of the agenda to let the wisdom of the crowd come through.