The Healthcare Imperative Lowering Costs and Improving Outcomes: Workshop Series Summary (2010) / Chapter Skim
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9 Care Culture and System Redesign
9 Care Culture and System Redesign
Pages 281-334
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From page 281... ...
Lyn of the Duke University Medical Center discusses refocusing the paradigm from physicians in healthcare facilities to one of multidisciplinary partnerships involving community members, nonprofit organizations, governmental health and human services entities, hospitals, and medical practices. Illustrating the impact of these community-based strategies, Lyn discusses two examples of success that have not only improved clinical outcomes and decreased acute care needs, but also yielded significant savings.
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From page 282... ...
However, he concludes that the apparent success of the MGH Care Management Program suggests that prospective payment for the enhanced management of high-risk patients holds some promise for reducing costs. Building on the idea of integration, coordination across providers, and information technology as central elements of care coordination, Ashish Jha of Harvard University describes interoperability of health information technology as a method of facilitating health information exchange (HIE)
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Bovbjerg of the Urban Institute discusses the potential for malpractice liability reform to lower liability premiums and decrease the practice of defensive medicine. Although he calculates that tort reform could decrease medical expenditures by 0.9 percent (almost $20 billion in 2010)
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We also continue to demonstrate deficiencies in preventing and managing the chronic diseases that dominate healthcare needs and costs. Chronic disease management and prevention require the patient to change what he or she does on a daily basis, a challenge that requires ongoing education and support.
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Launched in 1998 for Medicaid, CCNC is composed of networks of physicians, hospitals, health departments, social services agencies, and so on. These networks form community-based delivery systems and collaboratively deploy teams of social workers, nurses, health educators, dieticians, community health workers, and others who work in concert with physicians to provide care and disease management and assure appropriate access to services.
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We should be cautious about claims that any system change will rapidly improve outcomes cheaply. One study of primary care case management programs, for example, showed that many changes did indeed reduce healthcare expenditures for their enrollees.
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Virginia Mason Medical Center President Barack Obama's Council of Economic Advisers estimates that 30 percent of U.S. healthcare expenditures do not contribute to positive healthcare outcomes (Romer, 2009)
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Flow production Production of small lots of work take place as the needs arise, instead of batch production, which is usually associated with waiting times, delays, errors, and higher costs of work (Virginia Mason Medical Center, 2004)
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patient safety (Figure 9-1)
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The Boeing Intensive Outpatient Care Program followed the VMMC production system to provide patients with standard care management in their medical home, complete with enhanced phone care enabled by a modest per member per month additional reimbursement. The results exceeded Boeing's goal of a 15 percent reduction in healthcare costs.
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. Extrapolating Nationally Continuing with the example of diabetes, where disease management programs are most evolved, national savings could be as high as $35 billion from this effort.
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Patient Safety Savings Lastly, the VMMC production system reduces costs and improves outcomes by enhancing patient safety in several nationally monitored metrics. This starts with all staff being empowered to call a patient safety alert (Figure 9-2)
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Extrapolating Nationally Applying the same trends in the reduction of ventilator-associated pneumonia, central-line infections, and surgical site infections, the VMMC production system experience translates into national savings deliverable to patients, payers, and employers estimated at $4.1 billion. Summary Our experience with the VMMC production system suggests production systems can reduce institutional waste and medical errors while improving patient safety.
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From page 294... ...
And although many factors have been cited as drivers of this state of affairs, one key driver is often overlooked: unmanaged variability in patient flow. Artificial Flow Variability Variability, particularly in the flow of patients through the healthcare delivery process, impedes cost reduction and improvement of patient safety and quality of care (Aiken et al., 2002; Joint Commission Resources, 2009; Litvak, 2005, 2007; Litvak and Long, 2000; McManus et al., 2003)
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2003. Variability in surgical caseload and access to intensive care services.
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Variability Methodology The size and complexity of healthcare delivery systems makes it impossible to manage operations based on intuition, feeling, brainstorming, and benchmarking. While there is a robust science of operations management, it does not address the problem of artificial variability we see in health care.
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. And the work satisfaction of the care providers substantially improved (Litvak, 2007)
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From page 298... ...
. National Opportunity Until recently, the most common approaches to addressing the problem of hospital overcrowding has been to add more capacity and to decrease the length of the care delivery process, thereby increasing throughput in existing capacity (Litvak and Long, 2000; McManus et al., 2003)
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From page 299... ...
If 5 percent of the staffed beds are actually not staffed, then the savings estimate without growth would decrease from $35 billion to $112 billion to $26 billion to $82 billion per year. Second, while the estimates here reflect only inpatient beds, other opportunities for cost savings can be found in clinics, ambulatory surgery centers, and post acute care facilities.
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[D] 26,531 10 year Average annual savings estimate 1 ($ M)
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Torchiana, M.D. Massachusetts General Hospital2 In all the current attention to healthcare costs, the concentration of healthcare costs among a relatively small fraction of patients presents one 2 The authors would like to acknowledge the contributions to this work by the staff of the Office of Research, Development, and Information at the Center for Medicare and Medicaid Services, the MassGeneral Care Management Program staff, RTI International, ARC Cor
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From page 302... ...
Care coordination services for high-risk patients are a key component of so-called medical home proposals. Research on care coordination programs has shown mixed results; this highlights the difficulty of effectively improving quality and simultaneously reducing costs (Bott et al., 2009; Holtz-Eakin, 2004; Peikes et al., 2009; UnitedHealth Group, 2009)
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jointly applied to participate in the CMS Care Management for High Cost Beneficiaries demonstration (CMS, 2005)
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These patients averaged 3.4 acute care hospitalizations per year and had 12.6 active medications on their medication list. The eligible high-risk patients had average annual costs of $22,520 and total costs of $58,716,619 in the year prior to enrollment.
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Shaded Cells Identify the Risk and Cost Cells from Which the Eligible Patients Were Selected for the MGH Program HCC Annual Cost Risk Score $0 $500 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 15,230 14,154 12,163 8,859 6,799 5,481 4,615 4,009 3,587 3,264 ≥0 5,009 4,975 4,826 4,282 3,729 3,306 2,982 2,727 2,531 2,363 ≥ 1.5 4,557 4,528 4,423 3,973 3,493 3,109 2,829 2,602 2,426 2,269 ≥ 1.6 4,128 4,103 4,024 3,657 3,250 2,923 2,676 2,471 2,304 2,161 ≥ 1.7 3,747 3,732 3,671 3,373 3,024 2,738 2,521 2,336 2,187 2,056 ≥ 1.8 3,434 3,421 3,373 3,126 2,832 2,584 2,395 2,228 2,090 1,974 ≥ 1.9 3,113 3,103 3,064 2,870 2,622 2,405 2,241 2,096 1,982 1,874 ≥ 2.0 1,921 1,919 1,912 1,841 1,752 1,659 1,566 1,496 1,449 1,394 ≥ 2.5 1,222 1,222 1,221 1,210 1,179 1,137 1,097 1,063 1,032 1,005 ≥ 3.0 795 795 795 791 779 757 743 732 720 703 ≥ 3.5 506 506 506 506 503 496 493 488 482 474 ≥ 4.0 335 335 335 335 335 332 332 328 327 324 ≥ 4.5 216 216 216 216 216 216 216 216 215 214 ≥ 5.0 142 142 142 142 142 142 142 142 141 140 ≥ 5.5 93 93 93 93 93 93 93 93 93 92 ≥ 6.0 * Higher risk score indicates greater illness burden and greater likelihood of higher costs in future years.
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From page 306... ...
The major types of interventions included in the MGH Care Management Program are: • Annual nurse assessment and care plan review with an MD, • Telemonitoring for appropriate patients, • Surveillance calls, • Regular pharmacy review, • Assistance with transitions from home to hospital or hospital to home, • Advanced directives and end-of-life counseling, • Facilitated communication among care team members, • Urgent response and facilitated office access, and • Psychosocial evaluations and management. Even with this list, care managers had considerable flexibility to be creative in addressing their patients' care coordination issues.
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, completion of assessments on all patients, and high contact rates between care managers and enrolled patients suggest that opportunities for care coordination were identified. The high retention of care managers (100 percent)
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With regard to the care managers' work, the patient load for each nurse care manager was relatively high, with an average of 30 active patients at any one time and approximately 170 patients receiving routine surveillance. Weekly case discussions helped the care managers address the unavoidable tension between spending less time with more patients or more time with fewer patients.
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Policy Considerations The apparent success of the MGH Care Management Program suggests that prospective payment for the enhanced management of highrisk patients holds some promise for reducing costs. Nonetheless, several important considerations limit the translation of this demonstration to policy.
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HEALTH INFORMATION EXCHANGE AND CARE EFFICIENCY Ashish Jha, M.D., M.P.H. Harvard University It is widely believed that the adoption of electronic health records (EHRs)
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These savings did not focus on electronic health information exchange per se. A more targeted modeling exercise was performed by Jan Walker and colleagues, who estimated that the implementation of standardized, encoded, electronic HIE infrastructures would lead to $337 billion in savings over a 10-year implementation period (Walker et al., 2005)
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Current Strategies for HIE The framework for a comprehensive HIE strategy may be developed from a regulatory approach, a market-based approached, or a combination of the two. To date, the main mechanisms for HIE in the United States are regional health information organizations (RHIOs)
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From page 313... ...
RHIOs' efforts are focused on convening stakeholders, determining a governance approach, securing funding, designing and implementing technical infrastructure, launching the organization itself, building a sustainable business model, and planning for long-term growth. A recent Health Affairs publication describes the current state of RHIOs in the United States, based on a survey of all identified RHIOS between January 2001 and June 2009 (Adler-Milstein et al., 2009)
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The formation of a national strategy and standardized infrastructure protocols, as well as the ability for healthcare reform efforts to catalyze changes in the delivery system, will drive the success of HIE and its ability to improve patient outcomes while concurrently eliminating inefficiencies and saving billions of dollars. ANTITRUST POLICY IN HEALTH CARE Roger Feldman, Ph.D., M.S.
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. Other evidence suggests that quality suffers as well; the quality of care for Medicare patients with acute myocardial infarction has been found to suffer as a result of hospital mergers (Kessler and McClellan, 2000)
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in 2007, hospital mergers from 1990 to 2003 added about 2.75 percent to personal health spending in 2007. Some of this increase in spending could have been offset by increased efficiency that would reduce costs after a merger.
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. These cases, known respectively as "Evanston Hospital" and "Inova," have demonstrated the FTC's willingness to use its internal administrative processes to challenge hospital mergers rather than seeking relief through the federal courts.
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Antitrust cases are long, complex, and expensive, and the outcome is subject to the whim of a court. Enforcement agencies have a poor track record in opposing hospital mergers and have not challenged a single physician merger.
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The Medical Arms Race The argument goes as follows. Because of widespread health insurance coverage, healthcare consumers are isolated from the costs they incur when
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Insurance coverage was more complete for hospital services than for physicians' and other types of personal health services. Thus, the medical arms race in the hospital sector was most evident.
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Under retrospective cost reimbursement, inefficiency is rewarded in that a dollar of additional cost results in about a dollar of increased revenue. In contrast, under prospective payment, a dollar of extra cost results in virtually no additional revenue.
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Other states, such as Ohio, have repealed CON for acute care services but retain CON regulation of nursing homes. The Future -- Will Capacity Reduction Achieve Cost Containment?
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Overall, the empirical evidence suggests that CON programs have not succeeded in cost containment, and the evidence on their accomplishments in improving patient access to care and quality of care is mixed (see Salkever [2000] for a review of much of this evidence)
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enhanced savings under other reforms enacted simultaneously. In addition, reforming liability as part of health reform also adds value for patients; successful health reform can offer better ways than do traditional liability laws to promote patient safety, rehabilitate the injured, and compensate for injuries (Berenson et al., 2009)
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The following discussion details the three forms of tort-reform savings just noted and ends with consideration of broader safety-oriented reforms. Lower Liability Premiums Some state tort reforms have reduced malpractice payouts (Danzon, 1986)
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. A recent review of medical liability issues in health reform mentioned potential savings on defensiveness of 1 percent of health spending, though without documentation (Mello and Brennan, 2009)
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How Inclusion Within Health Reform Makes Tort Reform More Positive for Patients Finally, apart from dollar savings, making tort reform part of larger health reform also makes changes in liability more positive for patients. Healthcare reform shifts the policy discussion dramatically from the political-legal context of prior battles over tort reform geared to benefit providers.
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U.S. regional health information organiza tions: Progress and challenges.
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2009. Migrating toward meaningful use: The state of health information exchange.
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, May 21-22, Washing ton, DC.
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The Healthcare Imperative: Lowering Costs and Improving Outcomes Workshop, May 21-22, Washington, DC.
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2009. Transforming the healthcare delivery system: Proposals to improve patient care and reduce healthcare costs.
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1990. Effects of tort reforms and other factors on medical malpractice insurance premiums.
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