Hospital Leader

Do Retail Health Clinics Complement Or Compete With Primary Care Physicians?

2010-08-31T19:54:00.002-05:00

This is the same question that has been faced by many hospitals looking to start up an urgent care center. The primary care physicians usually express outrage that the hospital would compete with them. I have seen this first hand when our hospital contemplated such a move. Never mind that the hours of our center were in the evening and weekends when physician offices were closed. Also never mind that at 5pm the physician's phones shut off and patients got an answering machine that said they were unavailable and that any serious condition should be seen in the hospital's emergency room. I guess that EDs don't present the threat that urgent care centers do.

Well now there is a school of thought that supports the idea that these centers do not actually compete with primary care physicians, but actually help them. Although there may be some patients who use urgent care centers or retail clinics when available that otherwise would have gone to the primary care physician, many more are referred into primary care physicians for followup after an urgent care visit. Also the mix of patients in the clinic is different. Only 40% of these patients even have a private physician compared to 80% in the general population. Finally, because of the hours of operation, many of these patients would be going to an ED as an alternative, not waiting for the physician's office to reopen.

Overall these clinics and urgent care centers are seen as cheap, convenient and providing a high level of patient satisfaction. Maybe the physicians should not be so threatened and view them as a potential referral source that gives patients a great after hours alternative.

More on this later.

Mark Brodeur

Is There A Future For Public Hospitals?

2010-08-30T19:47:00.004-05:00

The current economic climate for hospitals has been described as Darwinian. I think this is a fair assessment considering the current level of performance for many small, rural, community hospitals. Many of these are public hospitals that were developed years ago to provide needed healthcare services to isolated communities.

A recent article in the Wall Street Journal has identified that their current bad credit ratings combined with the expected government cuts under healthcare reform, will further cripple public hospital's access to capital needed for health IT and other infrastructure needs. In other word, banks don't lend money to hospitals that really need it, particularly after the recent banking industry crisis.

Two other characteristics of public hospitals work against them as well. Most are small and stand alone. This gives them less of an edge when negotiating purchasing and managed care contracts when compared to the larger systems. As we move to adopting more "Centers of Excellence" again the stand alone public hospital will have a disadvantage. Finally, those hospitals that have been relying on tax subsidies by their local communities will face strong pressures to see these go away completely and have no prospect of any increases.

Some public hospitals have gone from public to private in the past with no problems. I oversaw one transformation in the early 90's. The move did nothing but benefit our hospital and the community. Perhaps more hospitals will be looking at this or even face a much more devastating alternative.

More on this later.

Mark Brodeur

Admitting Medical Errors: One Hospital's Experience

2010-08-27T11:48:00.004-05:00

Imagine a hospital that actually encourages its employees to not only admit medical mistakes but tell the patient and family the details of the mistake. In addition, if they find that a treating physician was at fault for an error related injury, they offer the patient and family financial compensation. This sounds crazy and is a bolder move than I would have been willing to try, but apparently it works.

This is not a true study since it is the experience of only one hospital and there was no control group. But according to the Annals of Internal Medicine, the University of Michigan Health System tried this and saw the following outcomes:

1) Overall legal costs went down
2) Number of claims requesting compensation went down
3) Number of claims actually compensated went down
4) Time to resolve a claim decreased

I have heard for years that being open about medical errors with patients and family is the way to address them. But the extent of information shared by this hospital as well as linking it directly to an offer of compensation is something new. I would like to see more studies but University of Michigan Health System's experience certainly supports this approach. The hospital was on a downward trend for claims before this was implemented. But claims dipped well below the tend after this program was put in place so there is clearly a connection.

The message here is that a full disclosure with offer program will not drive up liability costs as one might suspect. In this case at least it had a very positive impact in the other direction. Certainly this is worth serious consideration.

More on this later.

Mark Brodeur

The Cost of Medical Care Actually Dropped Last Month

2010-08-25T15:28:00.005-05:00

Maybe its too early to get really excited because one month does not make a trend and the cost of healthcare only dropped one tenth of one percent between June and July. But still, a decrease in the cost of healthcare is a big deal. This has been the one constant in the economy that everyone could count on. Healthcare costs will always increase from month to month. We have only had a decrease like the one last month six times in the last 63 years. Maybe longer since records only go back to 1947. And the last time it happened was 35 years ago.

On the other hand maybe it is time to celebrate, at least until the August numbers come out. Of course I would feel better if we knew exactly why there was a decrease. No one seems to be able to explain that. All we know is that healthcare did buck the overall trend which showed a consumer spending increase increase of 0.3% between June and July. The Obama administration has not yet claimed this as a victory for healthcare reform. Nor have the Republicans stated that this is the beginning of Americans abandoning our current healthcare system out of fear. People like us at Compirion would like to think it is because we are helping hospitals improve their operating metrics. But the truth is that the decrease is too small to be statictically significant, at least based on one month's data.

Lets continue to look at this and see what the future months bring.

More on this later.

Mark Brodeur

Six Keys To High Performing Hospitals: Key #6

2010-08-23T20:43:00.007-05:00

Today I finish out the list of keys to high performing hospitals as put together by Lawrence Prybil, Ph.D. and Samuel Levey, Ph.D. To say last but not least is an understatement. Today's key is perhaps the most important of all of them.

6) Healthy organizational culture

This concept has not been traditionally discussed, perhaps because it is a bit more difficult to see and measure. In fact in the study, it was cited in only 6 out of the 10 high performing systems interviewed. The culture in these systems was described as having a broad-based commitment to excellence in patient care and operating performance. It was also stated that this culture was not always with the organization but rather had to be developed over time. The culture must embrace the organization's core values and commitment to high performance.

Changing culture in an organization is a marathon, not a sprint. This is something that we work with everyday at Compirion Healthcare Solutions. To assist an organization in changing its culture requires an intense effort over an extended period of time; at least six months. Anything less than this will not have a sustained impact. Managers frequently put a spotlight on a problem area for a short period of time and are gratified to see almost immediate improvement. What they fail to do is follow up a few weeks later to see if the improvement has continued.

This list of six keys is not meant to be inclusive. There were a number of other keys mentioned such as prudent investment in facilities, services and new technology. But these six were considered the most influential on the high performance. If you achieve these six you will have attained a high level of performance.

More on this later.

Mark Brodeur

Six Keys To High Performing Hospitals: Key #5

2010-08-20T09:32:00.007-05:00

The fifth key to high performance may seem obvious, but when looking at hospitals that are struggling on their bottom line, it is not so obvious to them.

5) Defined organizational objectives, targets and metrics.

The only surprise to me in the study is that only 6 out of the 10 high performing hospitals in the study mentioned this. It relates to the popular axiom, "If you can't measure it, you can't manage it". All hospitals have great financial measures, quality standards and customer service scores at an organization wide level. These are usually included in a monthly dashboard shared with the Board. But what about at the department level? Does your facility have metrics to track all key performance areas? And how often is this data collected?

We at Compirion Healthcare Solutions often find this kind of data lacking. And if it is collected, it is not done on a frequent enough basis. The Board level dashboard concept must be applied at the department level (and interdepartment level) for all operations. The data should be monitored on a daily basis. Looking at last month's data will not show all of the performance fluctuations that occur. Plus it is too old to be useful for making the needed adjustments.

Gathering daily metrics is only part of the necessary action to achieve high performance. Knowing where you are today is important, but you must also set the appropriate and achievable benchmark for where you want to be. There are plenty of standards out there, some of which may seem unachievable. We have found in working with hospitals that they are surprised at the high levels of performance that they can achieve. We now resort to sharing the risk and providing them a money back guarantee if together we don't achieve this level of improvement.

So first you meed to measure where you are today, then set the benchmark for where you want to be and track your progress with daily measurement. How you get from A to B is an intensive process that is a whole subject on its own.

More on this later.

Mark Brodeur

Six Keys To High Performing Hospitals: Key #4

2010-08-19T06:47:00.008-05:00

Continuing my commentary on the list of keys to high performing hospitals based on a study by Lawrence Prybil, Ph.D. and Samuel Levey, Ph.D., today's topic deals with the ultimate authority for a hospital's operations.

4) Committed and engaged Board of Directors

With the hospital's CEO being the one in the spotlight, not everyone realizes the critical role that the Board of Directors plays. In fact, if they are doing their job well, they will remain somewhat in the shadows as the hospital excels. Usually Board members are only in the news when a hospital is in some kind of turmoil. A high performing Board is proactive, well informed and collaborates closely with the CEO and the Medical Staff. This was identified as a must by 8 of the 10 high performing Boards in the study. I think the other 2 just failed to mention it.

It is interesting that many of the high performing Boards spoke of the journey they took to get where they are today. It is clearly a development process. They spoke of the past when they were more passive and had a limited awareness of their environment and the importance of maintaining strong relationships. I remember dealing with a Board member who was strongly opposed to physician representation on the Board. His attitude was that the hospital would run a whole lot smoother if we did not have to deal with the doctors. This kind of thinking will hold a hospital back regardless of what other positive things are happening.

So how did the transformation happen for these Boards? It starts with education and a commitment by all Board members to be engaged in the process. The hospital can not afford to have valuable Board seats occupied by members with their own agenda or passive individuals who just occupy a chair and enjoy dinner. It also involves having the Board be clear on its role versus the role of the CEO. All high performing Boards understood this distinction. Having a strong trusting relationship with the CEO is essential. Finally, much of the work of strong Boards is done through effective committees. Most Boards are too large to have the kind of in depth discussion needed for many issues. Also there are just too many issues to deal with. So having committees that do most of this before the Board meeting is important. At the main meeting, the in depth work of the committees can be summarized rather than totally rehashed. This allows input from everyone without getting bogged in the details.

The Board is the ultimate authority for a hospital. This is not to say that it is more important than a strong CEO or cohesive Medical Staff. But without this third leg of the stool, the hospital will not excel.

More on high performance tomorrow.

Mark Brodeur

Six Keys To High Performing Hospitals: Key #3

2010-08-18T10:07:00.005-05:00

I have previously commented on strong value based CEO leadership and a clearly articulated mission, vision, and values. Today I want to move on to the critical importance of clinical excellence and the leadership it takes to achieve it.

3) Strong clinical leadership and capabilities

Eight of the 10 high performing systems interviewed mentioned this as essential to their success. This actually touches on several subjects. The first is my favorite mantra "quality first, finances follow". The second is the critical importance of having a competent and supportive medical staff. To achieve both of these you must have strong physician leadership. No hospital can achieve enduring success without it.

I have seen hospitals that have dissension within the medical staff and conflict between the medical staff and the board. This makes for a dysfunctional environment and will certainly hold the hospital back from becoming a high performer. The analogy that a hospital is a three legged stool comes into play here. It is supported by the Board, the Medical Staff and the CEO. If one of the 3 is missing, the stool falls over. This often requires some give and take on both sides. Some of the high performers mentioned the value of joint ventures with their physician groups. While some Boards may not be willing to share revenue with their physicians, the high performers have learned that sacrificing something in the short run will pay larger dividends down the road when strong relationships have been developed.

Strong clinical performance also extends beyond the medical staff to include nursing which is the backbone of the care provided as well as the other clinicians who provide care and support. Effective leadership in these areas is also key to high performance.

One final thought. With the advent of healthcare reform, there will be a stronger push for fully integrated care systems that include prevention, primary care, outpatient services and hospitalization under a single billing structure. Maybe we will finally see that capitated payment system that we all got ready for in the late 90's. Either way, systems that have all of these elements integrated will excel.

More on high performing hospitals tomorrow.

Mark Brodeur

Six Keys To High Performing Hospitals: Key #2

2010-08-17T12:23:00.007-05:00

Yesterday I discussed the importance of strong, value based leadership to a high performing hospital. Today I comment on my experience with the second key which involves setting a clear direction at the hospital that others are inspired to follow.

2) Well understood mission, vision and values

This was covered in my previous series of posts on what makes a great leader. But it is certainly worth repeating. There is a reason it is listed under attributes of a great leader as well as keys to high performance in your hospital. When surveyed, trustees from 8 of the 10 high performing systems that were identified for the study stated the importance of a meaningful mission statement, compelling vision for the system's future, and a clearly stated set of core values. It is important that they not only be understood but also supported by all key stakeholders both internal and external.

I have seen firsthand the difference that that a clear, concise and internalized set of mission, vision and values can make on an organization. There is no right or wrong message to convey. But it must be true to the real purpose of the hospital. More importantly it must be lived by everyone in the organization. In some hospitals the mission is just words on a dusty plaque. In a high performing hospital it is the daily motto that actually motivates employees. All key stakeholders from Board members to front line staff should be able to state the essence of the hospitals mission, vision and values from memory because they have been exposed to it every day.

This does not happen easily, nor can you change the culture overnight. It takes months if not years of repeated effort to "spread the mission". I found it useful to post these widely throughout our hospital; to make them a laminated page at the beginning of every Board meeting; to begin every new employee orientation with a thorough explanation of them; and to remind employees every day why we are here.

We talk about, "no money , no mission". I add to that, "no mission, no purpose".

More on high performing hospitals tomorrow.

Mark Brodeur

Six Keys To High Performing Hospitals: Key #1

2010-08-16T10:21:00.004-05:00

In an intensive study conducted by Lawrence Prybil, PH.D. and Samuel Levey, PH.D. which covered 123 hospitals in 40 states, they determined the short list of factors that made the high performing hospitals able to achieve that success. This study included interviews with key leadership at 10 high performing health systems. In today's post and subsequent ones I will provide my commentary on these factors. You will note that there is clearly overlap with this list and the ten key aspects of great leadership covered previously. This is no surprise, rather an affirmation of the bond between great leadership and high performance.

1) Strong values based leadership

Nine of the ten systems interviewed stressed how important it is to have strong leadership skills from the CEO. Leadership is different than management. It includes attributes such as commitment to the system's organizational mission and values, stellar communications and relationships with the board and medical staff, expertise in financial management and cost controls, a passion for continuous improvement and strategic vision.

It was also noted that the strong leadership must extend beyond the CEO position to all of the senior management team. Each of them brings their own area of expertise to the organization. Having a top leader who can attract this kind of talent and bring them together as a cohesive team is vital for the high performing hospital.

I can tell you from experience that this is more difficult than some people may assume. First you must create a culture that will be attractive to high performers. Even in today's economy with many people looking for work, high performers are difficult to attract. Then you must get these strong individuals to work as part of a team with other strong willed types. This part can be just as difficult. For some of these types, playing as part of a team is new to them. But it can be done and it must be done to achieve superior performance.

Ultimately though, it falls on the CEO to put this team together and to get them working collaboratively. If it is not happening, it is the Board's responsibility to make the necessary change in the top position.

More on keys to high performing hospitals tomorrow.

Mark Brodeur

Smaller Rural Hospitals Provide Surgical Care That Is Just As Safe As Larger Urban Hospitals

2010-08-13T10:51:00.007-05:00

A new study released in the July issue of the American Journal of Surgery compared the compliance of hospitals to the latest safety standards. It showed that smaller community hospitals were as responsive or even more responsive to new safety standards than their larger urban and tertiary care counterparts. It shows that you do not have to go to the big city to have a high quality, safe surgical experience. This is very important since currently 40% of Americans have their surgery in centers that are not large, urban, or tertiary care facilities.

In my years of experience I always knew this to be true, but it is nice to see it documented in a study. Most previous studies have bypassed the care given in the smaller and rural community hospitals. This has helped perpetuate the myth that for the best surgical care you must go to the large teaching hospital with cutting edge, expensive technology. If your surgery is that specialized that you need this type of care you will be referred there. But for more routine operations it was found that the smaller hospitals more quickly adopted new safety standards because there are fewer bureaucratic levels to cut through.

Specifically the study focused on how well hospitals implemented the expanded surgical time out procedure. The basic time out occurs before the patient is put under for surgery to verify that it is the correct patient, the correct surgery and the correct site. The expanded time out has a long checklist of additional safety items to check. Major surgeries such as hip and knee replacements, hysterectomies and colon resections were looked at for the study. It showed and overall compliance rate of 97% for the smaller hospitals with clinicians showing an extremely high standard of care.

So unless a patient needs a Cyberknife or DiVinci device for their care, they should feel comfortable going to their community hospital for surgery even if it is not listed in the U S News and World Report's Best Hospitals in America list.

More on this later.

Mark Brodeur

Paying Hospital Based Physicians Must Be Contingent On Far More Than Productivity

2010-08-12T13:05:00.004-05:00

The pendulum that swung away from making physicians hospital based ten years ago has clearly swung back. Hospitals are moving away from contracting with independent groups for many services and returning to salaried arrangements. But this time the payment arrangements are far more complex. It appears the hospitals have learned from mistakes made in the 90's when hiring physicians was last popular. In that era many physicians benefited from the naivete of hospitals in negotiating these arrangements.

I know of one hospital that plunged headlong into hiring physicians not just for hospital based services but they also set up a large primary and specialty care group. This new practice was largely responsible for the subsequent year's $5 million dollar profit for the hospital. The problem was that the practice itself lost $11 million that year.

There is also the case of two primary care physicians who sold their practice to a large hospital chain and made a big windfall. The chain kept them on seeing their same patients for a nice salary. This continued until the chain decided to dispose of all owned practices and paid these two doctors another nice windfall to take responsibility back for their patients, which they did. They are now back to where they started except they have pocketed two nice checks in the meantime.

Well this time the hospitals have started protecting their investment with payment tied to performance measures. It started with simple productivity measures. Physicians get paid for the number of patients they saw. Then it was discovered that not all patients took the same amount of resources, so RVUs were developed. It soon became obvious that there were other duties involved and time spent in a physician's day can be far more complicated than this.

According to Hospital Review, the following are key factors in payment formulas for salaried physicians today:

-Clinical services provided
-Administrative duties performed by the group
-Call coverage
-Quality measures, which still tend to be process oriented
-Measures tied to strategic objectives
-Professional fees

There are many factors driving physicians and hospitals toward salaried arrangements in today's environment. Clearly hospitals do not need to repeat the mistakes made 20 years ago. But the contracts will need to be based on a number of factors that include volume, complexity, quality, customer service and strategic initiative indicators.

More on this later.

Mark Brodeur

A Pilot Project For Tort Reform That's Worth a Try

2010-08-11T12:52:00.007-05:00

One of the major areas for reducing healthcare costs that is being largely overlooked by the Obama administration and the new healthcare reform law is tort reform. This is not a popular subject with the Democratic majority because of the support they receive from from all of the trial lawyers. Nevertheless it is an important area to address in today's economic climate and at least one initiative snuck through with some federal funding.

According to the Wall Street Journal there is a pilot program in New York State that looks promising and deserves some wider attention. Rather than allowing many of the cases to just go to trial which occurs under the current system, they are taking a different path using judge-directed negotiations.

Five hospitals in New York City are participating in the program. They are looking to reduce their malpractice costs by revealing any medical mistakes early, quickly offering settlements and using special health courts that have been set up where judges can negotiate agreements before they go to trial.

The pilot is being funded by the federal government for three years at a cost of $3 million. But the goal is to reduce the $1.4 billion spent each year in New York State on medical malpractice premiums. Some of the savings will come from quicker and hopefully more reasonable settlements, but the big savings will be from reduced attorney's fees for both sides. Obviously the trial lawyers association is not behind this pilot project.

Some will argue that we already have a mechanism in place to negotiate settlements and many cases end that way. Hospitals will argue that most of those are nuisance suits that are settled just to avoid the cost of going to trial. This process with a judge directed health court to hear cases should get the nuisance suits thrown out entirely.

I applaud New York State for this pilot and the Federal Government for funding it. I will be anxious to see the results.

More on this later.

Mark Brodeur

When Addressing ED Throughput, Don't Forget To Check The Back Door

2010-08-10T10:10:00.005-05:00

Yesterday's post covered the anticipated increase in ED visits for most hospitals because of the impact of healthcare reform. As hospitals prepare for this they will most certainly look to improve ED throughput, which is certainly what I would recommend. Many efforts I have seen hospitals attempt focus on the front door of the ED to get patients into the system faster. This is important but it is usually only part of the solution to faster throughput in the ED.

A number of approaches have been tried to get patients into the treatment cycle faster. Door to doc time or door to treatment time is a metric we all look at. Some innovative approaches have been used to shorten this. Some of them work and some of them don't. For example, hospitals have tried a policy of not using the waiting room unless absolutely necessary. The idea is to have enough treatment rooms in the ED to whisk new arrivals instantly into a room. This gives them the idea that treatment has begun. But the plan backfires when a patient waits an hour in a room without seeing anyone. Its like entering a crowded restaurant and immediately getting a table only to wait an hour for the waiter to show up. To improve throughput you need to begin service earlier.

But while many hospitals do effectively reduce waiting on the front end, fewer recognize the impact of the backlog on the back end of the ED. I'm talking about the patients waiting to be admitted upstairs. Disposition to Admit time is the metric to look at. Admit is defined as the patient has left the ED and is in an inpatient bed on a unit. Not all EDs recognize the significant impact this can have on ED throughput, patient satisfaction, ED productivity and ultimately new ED business.

The primary reason that ED patients who need admission remain in the department is the lack of available beds upstairs. We sometimes see a lack of cooperation from nursing staff to accept new patient in available beds, but usually its because the beds are full. And often they are full with patients who have been medically ready to be discharged for hours. They just haven't left yet. This is often because they are waiting on a family member who works or because the attending physician makes rounds late. These are both challenging issues but they can be addressed. We have helped many hospitals do it.

So when focusing on improving ED throughput, don't forget to address the inpatients lingering in the beds upstairs. Your ED bottleneck may well be bigger at the back door than it is at the front.

More on this later.

Mark Brodeur

Prepare for Increased ED Usage Under Healthcare Reform

2010-08-09T11:17:00.012-05:00

Healthcare reform will provide insurance coverage to millions of Americans who are currently uninsured. Many of them seek access to healthcare only through Emergency Departments. The initial thought would be that once they get health insurance coverage under the new reform law that they would immediately stop using the Emergency Department inappropriately and go instead to primary care physicians thus causing ED visits to decline. But actually just the opposite will likely occur. There are a number of factors that point to a surge in ED volume under healthcare reform. These include:

1) It is a misnomer that the uninsured use the ED more than insured patients. Many of them (though certainly not all) are wary of accumulating large bills. Suddenly having coverage will more likely drive them to seek healthcare. Since they have not established a relationship with a primary care physician or clinic, they will likely begin by going instead to the nearest ED to flash their new health insurance card.

2) Currently the biggest users of EDs are Medicaid recipients. Under reform, their ranks will increase by nearly 16 million. Their trend of using the ED to access the system will continue at least for a significant period until stronger primary care access is established. The new recipients will be much more prone to visit their local ED than they are today.

3) The new healthcare reform law does address improving access to primary care providers over time, but unfortunately it is much more effective in increasing the demand first. There is funding and incentives to create innovative models of care such as medical homes. But first of all these will take time to get approved and developed. Second they will take time to get staffed. And third, it will take time to shift usage patterns into these settings. In the meantime, EDs will stay busy.

Massachusetts has frequently been looked to as a model of what will happen under healthcare reform because they have had a law since 2006 requiring health insurance for almost everyone. They reported a 7% increase in ED visits between 2005 and 2007. Their increases may not be overwhelming but they still remain above the national trends.

How do you prepare for the anticipated increase in patients? A surge plan is certainly beneficial, but we have found it to be much more effective to focus on streamlining your current daily operations. Reducing ED throughput and facilitating earlier discharges has never been more important. We at Compirion Healthcare Solutions have assisted many hospitals to achieve amazing improvements in these areas and would be happy to meet with you to help your hospital prepare for the changes ahead.

More on this later.

Mark Brodeur

Public Opinion Seems Strongly Against Healthcare Reform

2010-08-06T09:54:00.006-05:00

This week Missouri voters drew national attention by solidly passing a measure that would ban one major aspect of healthcare reform; the requirement that everyone purchase some type of insurance. The measure is largely symbolic since federal law will take precedence over state law in this case, but the Missouri voters were well aware of this when they voted. In fact it was publicized by some that voting for this measure may jeopardize some federal funding down the road because of the embarrassment it would cause the Obama administration. That didn't seem to matter to Missouri voters who passed the measure with a more than two to one margin.

The Missouri Hospital Association weighed in on the matter with a mailer to all Missouri residents strongly opposing the measure. They made a very good point. If there is no mandatory health insurance coverage then who pays for the services consumed by the uninsured who certainly can't afford to self pay. Voters don't want it covered through taxes. So I suppose it is to fall on the shoulders of the providers to eat these costs. The MHA argues correctly that this could threaten the very existence of some struggling community hospitals.

The Tea Party and others also make a compelling argument that we want less government intrusion into our personal decisions. This certainly may fall into that category. But I argue that being able to provide needed healthcare services to someone regardless of their ability to pay supersedes that personal decision. Will that person who decides not to purchase health insurance also decline any medical treatment that might possibly be needed? I don't think so, nor should they.

Right now healthcare services are available when really needed for anyone. By putting our heads in the sand and saying we will not pay for some will not make those costs go away. Yes, healthcare costs are too high and yes, there are ways to improve the efficiency of service delivery and payment. But just ignoring the cost of the uninsured will not address these issues.

More on this later.

Mark Brodeur

Ten Aspects of Strong Leadership: Point #10

2010-08-05T12:46:00.007-05:00

Today I finish up my commentary on the ten aspects of leadership that were put together by Chuck Lauer. He has done a good job of covering all the bases for distinguishing strong leaders from weak ones. The final point sounds like an entreaty to all leaders.

10) Have courage

There is no safe comfort zone for leaders particularly in trying times like we are seeing now. A leader must be willing to take risks that will ultimately benefit the entire organization. At the same time he or she may be putting their own career on the line, but that's what it takes. To paraphrase a popular saying, 'When the going gets tough the leaders start leading'. This does require courage even if you have solid information to base decisions on. In the real world, the proper direction to follow is rarely that clear cut.

At this point I would like to recap the 10 aspects of strong leadership.
1) Leading is not the same thing as managing
2) Don't live in a bubble
3) Cherish and respect employees
4) Choose a clear mission
5) Demonstrate integrity
6) Be transparent
7) Embrace responsibility
8) Share credit
9) Leadership isn't for everyone
10) Have courage

This is a pretty comprehensive list, but it does help to define who is a strong leader in the healthcare field. How do you measure up?

More on this later.

Mark Brodeur

Ten Aspects of Strong Leadership: Point #9

2010-08-04T11:41:00.002-05:00

We are nearing the end of the list from Chuck Lauer on important aspects of leadership. But there are still several important points to make.

9) Leadership isn't for everyone

There is a saying that leaders are born and not made. You need to have that intestinal fortitude it takes to deal with the pressures of leading. In my CEO days I can't even recall how many times people came up to me and said, "I sure wouldn't want your job. Its too much stress". Of course this doesn't include the physicians who were convinced that the job was a cake walk and anybody could do it.

Most of those who do not have this inner strength needed recognize that fact and do not pursue a leadership role. Unfortunately there are some who are missing this key element but pursue the career field anyway. They usually get chewed up by the pressures and stress of the job. While no one enjoys the negative and stressful aspects of a leadership position, the strong leaders can cope with these and move on to the more positive aspects.

And that is the other side of being born to lead. Strong leaders derive great internal satisfaction from the accomplishments that a leader can help direct. While doing this he or she remembers that they did not do it alone. I forget the movie where a character says, "I love it when a plan comes together". But that is the satisfaction that a great leader feels. I have felt a strong sense of accomplishment over the years for the things that our team has achieved. This more than offsets the other stresses that come with the job.

Leadership is an opportunity that is also filled with a great deal of responsibility. Strong leaders live for this.

Tomorrow we will wrap up the series on leadership.

Mark Brodeur

Ten Aspects of Strong Leadership: Point #8

2010-08-03T11:27:00.002-05:00

As we begin to wrap up the ten aspects of leadership, there are still some important ones to cover. Today's topic is recognizing the efforts of those around you as your organization moves forward.

8) Share credit

This skill like some others is linked directly with being secure as a leader. I have seen insecure leaders over the years be quick to grab credit for anything positive that happens. It seems they need to justify their existence by claiming responsibility. A few delusional ones even believe that they did it alone. I know someone who felt that he alone was irreplaceable. Everyone else around him was inconsequential and could be easily replaced. This is the antithesis of a strong leader.

Chuck Lauer states that a leader is best when people barely know he exists. This is tough for some leaders for many of us are drawn to the spotlight. But sharing it with all the people who make good things happen is extremely important. Recognizing someone publicly is a powerful motivator for them. We all want recognition. It may be the strongest reason why many people do what they do. One of the best bits of advice I got was to recognize employees who did something particularly well by sending a thank you note extolling their virtues to their home. This way it is seen by their spouse and family. It also is more personal and heartfelt.

The other side of publicly sharing the glory is stepping up and taking the blame alone. To publicly admonish employees in public will not achieve the desired result. It will destroy morale. Praise in public and criticize in private is a very true axiom. Everyone will realize the part they played in a failed initiative. A true leader is someone who takes it for the team and moves on.

More on leadership tomorrow.

Mark Brodeur

Ten Aspects of Strong Leadership: Point #7

2010-08-02T12:35:00.006-05:00

Moving on with Chuck Lauer's list of leadership traits, today I want to cover one that can be clearly seen in many leaders but is even more obvious when it is lacking. Not everyone who is elevated to a leadership position has everything that it takes to lead. A leadership role is very demanding and you must be willing to take on these challenges.

7) Embrace responsibility

There are two aspects of taking on responsibility and decision making. The first is making that enlightened decision in a timely manner and the second is standing by it under pressure. Regarding making the right decision, it must be fair and balanced taking into account all the factors in play. These are usually contradictory so the decision making is much more difficult. Responding without knowing all of the facts can be bad, but being frozen with indecision during critical times is certainly worse.

Great leaders actually enjoy the challenge of taking on responsibility and making the tough decisions. These are people who thrive under stress. Not that they go about purposely creating stressful situations. There are some people who do that. But great leaders derive an inner strength under stress and find a way to show peak performance. They do not waffle under challenge of their decisions. Any tough decision, even the right one is bound to have some challenges to it. Making the right decision in the first place is a leadership skill. But sticking with it under challenge is just as important.

Clearly this is not for everyone. I have seen people in leadership positions who freeze under pressure or back away from tough decisions hoping that they will resolve themselves. Obviously these people do not survive long term in a leadership position. The organization is looking for someone to take charge and take a stand. Even if they do not personally agree with a position, many people will follow a leader who clearly articulates his or her position.

It is during times of crisis that strong leaders clearly differentiate themselves.

More on leadership tomorrow.

Mark Brodeur

Ten Aspects of Strong Leadership: Point #6

2010-07-30T13:06:00.002-05:00

Up to this point a number of key attributes for leaders have been discussed, with yesterday's discussion on integrity being the most important one in my opinion. But integrity alone will not make you a great leader. I have seen some truly ethical and well intentioned people in a leadership position fail because they did not possess the other skills required. Today we will cover one of those skills.

6) Be transparent

This sounds easy to do, almost a passive exercise. But in reality it is a challenge for most leaders. It goes against many people's natural instincts. Some leaders, particularly insecure ones feel threatened by others. They live by the adage that "Knowledge is power". Actually this is true. But rather than empower all those around them with knowledge, some leaders feel this gives away their power. The more confident leaders tend to share information readily.

Now this can be taken too far. For example I do not agree with the speaker I alluded to in an earlier post who suggested that hospital CEOs conduct their business in the hospital lobby in front of everyone. There are sensitive and confidential issues discussed which must occur in private. But key decisions affecting the organization should be readily shared with all employees on a timely basis.

I used to hold a management meeting for all mid level managers and above the morning after each Board meeting to share all the important issues discussed and decisions made. I also met with all employees at least quarterly (this means covering three shifts) to share the organization's performance measures, both good and bad. Employees loved it. They were surprised sometimes that some not so good news was being shared. But they also took ownership in these performance metrics and improved their overall performance.

By sharing information with all employees you empower them and build their trust. A few may abuse this trust, but they probably didn't belong in your organization in the first place.

More on leadership next week.

Mark Brodeur

Ten Aspects of Strong Leadership: Point #5

2010-07-29T07:07:00.004-05:00

As we continue with Chuck Lauer's list of key aspects of leadership, today I want to cover the one that I consider to be the most important.

5) Demonstrate integrity

Being a strong leader requires having a number of skills but none of these mean a thing if they are not based on a foundation of solid ethical standards. How a leader acts in this regard not only directs his or her behavior but also the behavior of all those who are faithfully following. The most dangerous combination is an inspiring and charasmatic leader who pursues an unethical path to quick gains.

Successful leaders are quick to recognize that they do influence the behavior of others who are following them. With this comes an enormous responsibility. It is not alright to say that we have to bend the ethics of the organization to survive in today's environment, or that this is what the competition is doing. Being a leader means you have to stand up for what is truly ethical and setting an example for the organization.

Throughout the years I have seen a number of leaders who posess questionable ethics. They do not all crash and burn. This is not Hollywood. In real life some of these people succeed in the business world. Keep in mind that many of them possess other strong leadership skills. But they are still not doing right for their organization or the community they serve. A few end up on the cover of Modern Healthcare in handcuffs but many other operate under the radar.

At the end of the day a leader must be able to look in the mirror and ask, "Did I do the right thing?".

More on leadership tomorrow.

Mark Brodeur

Ten Aspects of Strong Leadership: Point #4

2010-07-27T08:18:00.007-05:00

In the previous posts, the leadership traits have focused on the ability to interact and motivate people. But just as important for a strong leader is the ability to provide a clear direction for the organization and a sense of purpose.

4) Choose a clear mission

Healthcare is very mission oriented. In fact some organizations in the past have focused so much on mission that they did not keep the financial realities in proper perspective and threatened their organization's very existence. Obviously a balance is needed. The old adage "No money, no mission" is very true. So it is up to the strong leader to identify the proper mix of services that will support the organization while fulfilling its overall mission.

This all starts with the organization's mission statement which should be to the point and clear to everyone that reads it so that it can be internalized. I once came to an organization with a mission statement that was a page and a half long. If you read the whole thing it sounded very nice but it did not convey a clear sense of purpose to the organization. Working with the Board we shortened our mission to a single sentence that still expressed what we are about.

But the job of establishing mission awareness only starts here. Once you have a statement that will inspire and direct people, the real work is to make it a living, breathing part of the organization. Everyone from the Board members to all front line staff should not only be aware of the hospital's mission but also see it as a guiding principle for their everyday activities. I had our mission, vision and values framed and hung on the walls throughout the hospital including the Board Room. I had them laminated and put in as the first page of the Board book every month. I went to every new employee orientation and gave a 15 minute talk about what our mission, vision and values meant to us. Even with all of these efforts, there was more that could have been done to make the mission completely internalized in the hospital.

Selecting the appropriate mission that balances meeting community needs with protecting the long term financial viability of the hospital is a daunting task. Getting this mission completely internalized in the organization is even harder.

More on leadership tomorrow.

Mark Brodeur

Ten Aspects of Strong Leadership: Point #3

2010-07-26T10:38:00.006-05:00

The third aspect of strong leadership overlaps with the second point that was covered on Friday. It addresses how effective leaders deal with employees.

3) Cherish and respect employees

The first thing that a real leader recognizes is that you can not do it all by yourself. You must rely on others and get your work done through other people. The key is how to properly motivate them. Not everybody gets it.

I once worked under someone who clearly thought that employees were an expense to the organization rather than an investment. His idea of employee loyalty was, "You work hard for me for two weeks then I give you a paycheck and we're even". That was it. No connection beyond that. This was not the enlightened thinking of a great leader. Clearly he thought that employees were totally replaceable. Even in a tough job market like today with many people looking to jobs, this is not the way to inspire employees to put their heart and soul into their work.

As Chuck Lauer says, "Employees who get respect will produce at their highest capacity and make their leader look good". My philosophy has always been to surround myself with the best people I can, Give them the resources they need to do their job and stay out of their way except to support them as needed.

As for front line staff, doing the MBWA that was covered last week is important, but not the most important thing. Letting them in on what is going on and seeking their input is invaluable. For an employee to be able to go home and tell his or her family about some new service coming to the hospital before they read about it in the paper makes them feel empowered and alligned with the organization. This is the kind of employee who will do anything to help the hospital succeed. That is a great gift. Make sure they know how much you appreciate it.

More on leadership tomorrow.

Mark Brodeur

Ten Aspects of Strong Leadership: Point #2

2010-07-23T11:04:00.003-05:00

Continuing with commentary on Chuck Lauer's list of leadership traits, today I want to focus on being connected.

2) Don't live in a bubble.

Great leaders listen to their people to gain a variety of perspectives. Some leaders don't realize that they don't need to know everything themselves. I have seen over the years that the best leader is someone that knows what he doesn't know and is not afraid to admit it. The great leaders surround themselves with other smart people and listen to what they have to say.

But getting out of the bubble is more than just this. The great hospital leader needs to leave his office and be visible in the hospital. I heard one speaker advise that the hospital CEO should not even have an office. He should set up at a table in the hospital lobby to be visible to all. Personally I think this is going way to far. But the point is valid.

The term Management By Wandering Around (MBWA) became popular some years ago, and many CEOs spend a portion of their day making rounds to interface with employees as well as patients and visitors. But usually when schedules get busy, this is the first thing to go. Also in a large organization that operates around the clock, it is difficult to be visible to everyone. I had a Board Member once chastise me for not knowing the first name of all our employees. He knew the name of all eight employees at his bank. I reminded him that it is a little tougher with 1,200 employees, some of whom work nights and weekends only.

One final note on being visible to employees. It is not just talking in the hall about kids and grand kids. Employees want to know what is going on and want to know that their feedback about the workplace is being listened to. Making time for this is the really important thing.
Properly respecting employees will be the subject of the next post on Monday.

More on aspects of leadership next week.

Mark Brodeur

Ten Aspects of Strong Leadership: Point #1

2010-07-21T07:37:00.009-05:00

In today's tough economic and competitive environment with more scrutiny from all sides than ever before, it is extremely important that hospitals have strong leadership. Just what is it that makes someone a strong leader? What qualities are necessary to be effective as a leader?

Chuck Lauer who for many years was publisher of Modern Healthcare, a prolific author, public speaker and career coach in the healthcare field, offers up his views on what it takes to be an effective and strong leader. Over the next series of posts, I will share these along with my comments based on my personal experience as a hospital leader and my observations of many in the field. Just by paying attention to others you can learn what to do but more often learn what not to do.

1) Leading is not the same as managing

We often use these terms interchangeably but they are dramatically different, just as management and administration are different things. It has often been said that leaders do the right thing while managers do things right. Management entails working within the organization doing things correctly and efficiently while leadership involves setting that course for the managers to follow. Both functions are necessary for the successful operation of a hospital. But a well managed hospital will not succeed if it is not headed in the right direction. A leader is necessary to set the strategic plan for the organization.

The other aspect of this is the ability to get others to follow you once you have set the course. This means that you must be able to inspire others to act. The willingness of others to follow you is dependent on two things: 1) the message itself must be believable and consistent with others values 2) having the charisma to properly convey the message is just as key. Strong leaders handle both of these well.

More on leadership tomorrow.

Mark Brodeur

Ten Practices for Increasing Hospital Profitability: Tip #10

2010-07-20T07:58:00.004-05:00

Today we finish commentary on the list of profitability practices put together by Becker's Hospital Review. As stated in the previous posts, the list focuses heavily on physician involvement to improve your bottom line and grow business. Today's tip deals with the managed care side of the business.

Tip #10: Renegotiate managed care contracts

For many hospitals managed care patients represent a significant portion of their business or at least a significant portion of their bottom line. Even though managed care companies have become far more resistant to subsidizing the losses hospitals endure from Medicare and Medicaid, it is essential that hospitals maximize this portion of their reimbursement. Clearly there is no opportunity for improved reimbursement from Medicare and even if Medicaid improves substantially it will just decrease the loss.

As has been previously stated, hospitals must focus heavily on cost reduction. But this alone will not get you where you need to be. You also need to maximize reimbursement. According to Nate Kaufman a well recognized national speaker on this subject, hospitals should be getting 130-140% of costs from their managed care providers. If your hospital is not large enough or strong enough in the market to get these kinds of rates, then you should look at merging with a larger facility or system to improve your negotiating clout.

Managed care contracts should be looked at on a regular basis even if they are not due to expire. A profitability analysis should be conducted by payor and by procedure to find the real winners and losers from a financial perspective. Then focus on renegotiating the losers and get carve outs where needed to things such as orthopedic implants.

When you face managed care providers to improve reimbursement in certain areas do not expect a receptive audience. Despite the significant profits many of these insurers are making compared to hospitals, they will not make concessions willingly. You must know your market clout and be prepared to walk away from the table without an agreement as long as you are in a position where they need it more than you do. They will eventually return to work out a deal.

In closing this series of posts on profitability, there are many worthwhile practices on the list. In today's market it is essential that a hospital explore all possibilities. We are now longer in the era of profitability that some of us remember where sloppy practices could be tolerated and still give you a solid bottom line. Today it is clearly survival of the fittest.

More on this later.

Mark Brodeur

Ten Practices for Increasing Hospital Profitability: Tip #9

2010-07-19T10:50:00.005-05:00

As we wrap up the list of profitability practices today and tomorrow, we once again turn to a tip involving the role of physicians. Many hospitals have turned to using hospitalists to manage a significant number of their inpatient admissions, and with great success if handled right.

Tip #9: Consider hiring hospitalists to manage inpatient care

The utilization of hospitalists has grown significantly over the last few years. At first, hospitalists were used primarily at larger institutions. Now you will find them everywhere including small community hospitals. Their use has increased because they help hospitals deal with two important issues: 1) minimizing length of stay and unnecessary testing 2) addressing lifestyle issues of primary care physicians who prefer an office only practice.

Many studies have shown that effective hospitalists can save a hospital millions in costs and generate additional revenue through their practices. Their availability inhouse helps facilitate admissions through the ED. They can significantly lower length of stay and reduce the amount of inpatient testing. Further they can enhance revenue through thorough and appropriate documentation that allows the hospital to maximize coding.

But this assumes that the hospitalist is a skilled acute care provider. I have seen hospitalist programs fail to deliver these returns because the physicians filling this role are the same inefficient providers that they were in their private practice. The point of a hospitalist program is to have the inefficient providers turn their care over to someone effective at managing acute care. Many times the physicians who seem to get lost providing inpatient care are happy to do this and appreciate the opportunity of having a hospitalist. But there are those physicians who refuse to turn over any aspect of their patient's care (inpatient or out). The only advantage of having a good hospitalist program for these physicians is that it provides a good internal benchmark for comparison. If you can show them that their case mix index is lower than the hospitalist's patients yet their length of stay and test utilization is higher, this provides a strong argument to influence their practice patterns.

The second benefit of a hospitalist program is that many of the primary care physicians, particularly the younger ones, prefer not having to deal with inpatient care. I had a family practice physician tell me that he needed only three more office patients a day to match the revenue he got by following inpatients which took over 2 1/2 hours of his day. For him, the decision to support a hospitalist program was easy. Unfortunately for me, he was also a very efficient inpatient provider. But the point is that you can generally improve the efficiency of your inpatient care while making life easier for a number of primary care physicians.

One last note, starting a hospitalist program is usually not free. Most hospitalists do not fully support themselves through billing alone, particularly in small hospitals. There is usually a subsidy involved to get the coverage needed. This must be weighed against the benefits gained to determine the financial feasibility. Most hospitals, including small ones, are finding this worthwhile.

More on the last profitability tip tomorrow.

Mark Brodeur

Ten Practices for Increasing Hospital Profitability: Tip #8

2010-07-16T14:09:00.003-05:00

As we approach the end of the profitability practices list, today I want to focus on adding profitable service lines. The key to this is not only knowing their general profitability in most markets but also how they will perform in your particular market.

Tip #8: Consider adding profitable service lines

Building profitability is a combination of becoming more cost efficient and adding new business. You must do both if you are to succeed. Sometimes adding new business to your existing services is not a real option. In that case the only way to get additional business is to add new service lines. Any service provided by a hospital must either meet a critical community need or add to the hospital's bottom line. Ideally a service will do both. But when looking to add new service lines you must not only know that they are profitable in general, but that these needs are not already being met in your market.

Some profitable service lines like bariatric surgery, plastic surgery or hyperbaric oxygen therapy may not be seen as supporting the main hospital mission. But actually they do. It is the profit from these services that help finance those under-reimbursed core services and allow you to treat uninsured patients in your community.

When looking at new service lines, determine what the market needs and where you will get the referrals from. Again you need to be talking to your physicians about their needs and the number of cases they may be referring to the new service line.

Even in an era of shrinking reimbursement for services, there are still some service lines out there that can boost your bottom line. You may just have to look a little harder to find them.

More on profitability practices on Monday.

Mark Brodeur

Ten Practices for Increasing Hospital Profitability: Tip #7

2010-07-15T10:49:00.006-05:00

As we proceed through the list of profitable practices, the trend of working with physicians continues. Four out of seven practices involve physicians.

Tip #7: Grow case volume by attracting new physicians to your facility

It is fairly straightforward that new physicians will bring in more cases and grow your profits. Depending on your market this may mean attracting new physicians to live in your community or just getting existing physicians who live in your community to support your hospital rather than the competition. To accomplish this you must really impress the physician with what you can do for them and their patients.

Getting the physician loyalty is not just a matter of throwing money at them. First of course there are Stark issues with paying physicians. But even those hospitals that have directly employed physicians physicians have gotten into financial trouble by not properly structuring their employment contracts. An extreme example is the hospital that built a large hospital based physician practice paying very attractive salaries to recruit top notch physicians. This resulted in a $6 million positive bottom line for the hospital. The problem was that the separate physician practice corporation that paid all the new docs lost $11 million the same year. Needless to say, the corporate structure could not sustain the net $5 million loss and there were dramatic changes the next year.

Attracting new physicians and building their loyalty is a complex and difficult process. Not all physicians are looking for the same thing. But it is safe to say that most of them today are looking for lifestyle over money as long as the money is still well in the market range. Many physicians today also want the security of employment. They are not trained in business and don't want the headaches and uncertainties of hiring staff and doing their own billing. This is why the pendulum has now swung back to more physicians entering an employment arrangement rather than going into private practice.

There are other considerations also such as the amount of call and whether or not hospitalists are available. Again, the physician may be willing to sacrifice some income to have more evenings and weekends available for his or her family. Also do not overlook integrating the physician to the hospital and his or her family to the community. It has often been said that to recruit the physician, you must win over their spouse. You want to not only bring the new physicians to the community but keep them satisfied with their decision for years to come.

More on profitability tomorrow.

Mark Brodeur

Ten Practices For Increasing Hospital Profitability: Tip #6

2010-07-14T11:20:00.006-05:00

Continuing with the commentary on Hospital Review's list of practices to increase profitability, we return for the third time to a tip involving working with physicians. I think I see a pattern here.

Tip #6: Consider partnering with local physicians to reduce competition for outpatient cases

Joint venturing with local physicians to develop a surgery center has become commonplace. If you have not done it yet, the prime opportunity has probably past. Changes in reimbursement are making these centers far less attractive financially than they have been in the past. And they have been very lucrative for investors in the past. Hospitals need to be open to sharing procedure and testing revenue with medical staff members that years ago had been exclusively the domain of the hospital. I have seen first hand the consequences of trying to keep control of these services in today's market. The physicians will open up their own center and take business away from the hospital completely. Part of something is better than all of nothing.

Hospital must develop a comprehensive outpatient strategy for all services that recognizes its physicians as key partners for its long term viability. In these lean economic times it seems contra intuitive to be sharing profitable outpatient services. This would be true if there were no alternative for competition. Unfortunately the threat of competition is real making it better for everybody including the community for hospitals and physicians to cooperate rather than compete.

More on profitability practices tomorrow.

Mark Brodeur

Ten Practices for Increasing Hospital Profitability: Tip #5

2010-07-12T07:42:00.003-05:00

We continue this week with the discussion on practices that can make your hospital more profitable. Key areas like data based staffing decisions, managing vendors, OR utilization and physician involvement were discussed last week. Today I want to focus on the appropriate use of outsourcing or partnering for certain hospital activities.

Generally there is a reluctance to go outside for management of any area. These companies will come in and take a fee off the top to manage your area so that must be made up first before the hospital will see any financial benefit on the bottom line. Yet some of these companies can still produce a significant net increase in profitability because of the economies of scale they have particularly when dealing with smaller hospitals. I have used services like these in the past for areas such as dietary and pharmacy and have seen their benefit.

One additional motivation that drives hospitals to consider outside management is the ability to delay capital expenditures by using the management company's capital. A laundry facing the replacement of major equipment may be outsourced thus eliminating the need for new equipment. Dietary management companies have access to capital at attractive financing rates to assist with the purchase of new kitchen equipment.

With today's sluggish economy many hospitals, particularly in smaller communities, want to keep as many jobs as they can inside the hospital. Outsourcing is a last resort. Yet in some situations it may still be the best option. When considering this option it is important to make sure that each party knows why it is entering into the agreement and there is a mutual benefit. The benefit to the hospital may be directly financial through reduced cost of supplies and equipment, or it may be indirect by providing hard to recruit positions like ED physicians or anesthesiologists.

One final thought before you enter into any management agreement, make sure that you would not significantly improve the department's profitability through internal streamlining. Organizations such as Compirion have helped hospitals attain significant and sustained savings while working with existing hospital management and staff.

Outsourcing can make sense if done for the right reasons.

More on profitability practices tomorrow.

Mark Brodeur

Ten Practices For Increasing Hospital Profitability: Tip #4

2010-07-09T12:27:00.006-05:00

Continuing the discussion on practices that will increase your hospital's profitability, today I want to comment further on physician involvement. Yesterday I talked specifically about surgeons, but you must involve all your key physicians in these areas to maximize your profitablilty.

Tip #4: Involve physicians in cost reduction efforts

There are many other areas besides surgery where physicians can play a key role in helping the hospital reduce costs. Conversely, physicians who are not at all aligned with the hospital can prove to be very costly. I have seen this more often than I care to admit throughout my career. The key is to build mutual benefits for the hospital and physician for cost saving measures. Remember that the physician's pen is the most expensive instrument used in your hospital. Efficiency in ordering tests can save millions over a year while thorough documentation to maximize coding can add millions in collections.

Many hospitals do not properly engage physicians in the cost reduction process. There may be an assumption that physicians strictly follow their own interests and will not be flexible to consider benefits to the hospital. For some physicians this may be true but it is not a valid assumption for dealing with the entire medical staff. The hospital can not make major changes in supplies and equipment without involving physicians. There may be reasons beyond the clinical ones why an orthopedic surgeon demands a particular brand of implant and changing may make great clinical sense. But it must be done with his or her involvement and eventual endorsement of the switch. It is amazing how negotiable pricing from vendors becomes if they do not have the physician lined up to boycott any product but theirs.

The same holds true for developing patient care protocols designed to standardize treatment thus benefiting the patient and saving costs from unnecessary tests. These can not be just imposed, but must be developed with the involvement of key physicians with peer review followup for those physicians who refuse to go along.

There must be incentives for the physicians beyond "this is good for the hospital". In a true partnership they will benefit as well. With the trend swinging back to more hospital employed physicians and inpatient care being done by hospitalists, it is much easier now to align incentives than it was a few years ago. Physicians are your partners. Treat them that way.

More on profitability practices on Monday.

Mark Brodeur

Ten Practices for Increasing Hospital Profitability: Tip #3

2010-07-08T13:00:00.005-05:00

I have been commenting this week on the 10 practices for increasing hospital productivity published by Becker's Hospital Review and adding my take on them based on my experiences as a CEO and as a consultant helping other hospitals improve operating metrics. Today I want to comment on effective OR utilization. This is a challenge faced by almost every hospital I know of.

Tip #3: Ensure that your OR is used by physicians efficiently

Boy, that seems easy enough to say yet every hospital struggles making this happen. The OR should be a profit center for the hospital and surgical patients should make up 40% of the hospital's total patient mix. But we often see that this is not the case anymore because of several factors at play.

First of all, the more profitable outpatient surgeries are now funneled off to a separate ambulatory surgery center. Only very small hospitals still do all inpatient and outpatient surgeries in one location. In most instances, the outpatient business goes to a for profit physician owned center from which the surgeons get very nice financial returns. But as one surgeon told me, the real financial benefit to him is that he can do twice as many surgeries in the same amount of time at the center versus the hospital. Time is money and OR turnaround time is key. We helped one hospital reduce its room turnaround time to 13 minutes. Now that rivals an ASC and did a lot to promote physician loyalty.

The loss of the outpatient surgery business impacts hospitals negatively in two ways. First they are losing the most profitable surgeries and second, the reduction in overall business makes many hospital ORs less efficient. It is critical that hospitals adjust to the current volume of business and do what they do efficiently. That surgeon may be taking his best business away from you, but his satisfaction with your OR for the cases he brings is critical to the hospital's success. Here are some steps to take:

1) Start your cases on time. At least 75% of first cases should be on time
2) Reduce cancelled cases. Better and timely preadmission testing can get this near 0%.
3) Reduce room turnaround time. I like 13 minutes as a goal.
4) Reduce PACU time to under 1 hour. This really saves overtime at the end of the day.
5) Improve block utilization. 70% should be you goal
6) Track and improve surgeon and surgical patient satisfaction. We have seen a hospital with a 95% satisfaction rating from their surgeons and patient satisfaction at the 94th percentile.

OR is a critical for your hospital's bottom line and is sometimes challenging to address. We at Compirion have had some significant success assisting hospitals to help themselves in this area.

More profitability tips tomorrow.

Mark Brodeur

Ten Practices For Increasing Hospital Profitability: Tip #2

2010-07-07T11:53:00.005-05:00

Yesterday I began a series of posts on how to make your hospital more profitable and covered the art of making data driven staffing decisions. Today I want to move on by discussing how to reduce supply costs.

Tip: #2 Reduce supply costs by better managing vendors

Yesterday we talked about the largest expenditure that hospitals deal with, staffing. Today I want to cover another significant expenditure, supplies (particularly medical supplies). This involves not only working with vendors but also getting your physicians on board to make fiscally responsible supply choices. It has often been said that the costliest instrument to a hospital is the physician's pen. Of course that has now been replaced by his or her keystrokes on the CPOE system. Working with vendors will go just so far if they have they physicians tightly aligned with them.

In dealing with vendors, do not be shy about demanding additional discounts due to the harsh economic times the hospital is facing. Although the medical supply business is also experiencing a downturn in profits, most are still faring a lot better than hospitals. They certainly will not provide discounts you don't ask for, and probably will still be reluctant until you threaten to take your business elsewhere. Keep in mind that this threat only works if it is real. That is why you need your physicians aligned with you before you start.

Experts have always talked about a partnership with vendors and this is a laudable objective which can only be achieved with totally aligned incentives. I don't think that really exists in today's cutthroat world of medical sales. I know of too many experienced reps who have had long term relationships with physicians and hospitals compromised by corporate demands for more sales whether it is the right product or not for that patient.

Many hospitals have had success by reducing the number of vendors they deal with and limiting the variety of inventory. Again this requires physician support. Another key area is to require purchase orders 24 hours in advance for any equipment or implant that is not already covered by a negotiated written agreement. Vendors must sign a statement that if they fail to do this, the item they provided is free to the hospital. This aligns the vendor's financial incentive with yours for that partnership.

Finally, in dealing with physicians, they truly must be treated as partners. Forcing changes on them for medical supplies or equipment will just not work. They must be involved from the start and both parties must ultimately be ready to make compromises. Sometimes it is better to give in on the cost of an item if it will secure the loyalty of a physician down the road.

More on profitability practices tomorrow.

Mark Brodeur

Ten Practices for Increasing Hospital Profitability: Tip #1

2010-07-06T14:22:00.007-05:00

In the webinars I present on preparing for the impact of healthcare reform and developing a highly functioning ED there is a common theme to survive in the current climate of economic recession, growing uninsured, cuts in payments and increased competition: You must focus on reducing costs AND increasing reimbursement. Over the next series of posts I will cover 10 best practices in these two areas to make your hospital stronger and more profitable.

Tip #1: Reduce staffing costs based on data driven decisions.

There is an old adage that if you can't measure it you can't manage it. Well since labor is the single largest expenditure for any hospital it is critical that it not only be measured in great detail on a timely basis, but that this information be used instantaneously to adjust staffing levels. Understaffing can be just as financially devastating in the long run as overstaffing.

Since workload in hospitals tends to be flexible in most areas, the staffing in these areas must be flexible as well. Some areas, such as the ED have some rather predictable flexibility in patient volume based on the time of day. In other areas the seasonal variation is somewhat predictable. But no matter how good a forecasting model you use for long term, you must still be prepared to make daily (or more often) adjustments. Some high performing hospitals look at their census and projected admission and discharges every 8 hours and make staffing adjustments accordingly. This may be beyond the scope of some hospitals to perform. But suffice it to say that reviewing staffing only after every pay period will not be adequate.

Flexible staffing also works very well for areas such as the OR. Look at staff starting times versus actual case start times. Also consider the typical mid-day slump for the number of cases being performed versus the staffing levels. Most ORs are busiest in the morning and late afternoon with a down time in between.

We at Compirion have found that significant salary savings can be had through improving efficiency. This does NOT mean that the staff have to do more than they are already doing. It means that you can provide better care for patients while having your staff actually do less. Increasing ED throughput, decreasing OR turnaround times and shortening length of stay are common areas that we find can be further addressed. By taking this approach rather than just laying off employees you can have the added benefits of increased employee morale, higher patient satisfaction and stronger physician support for your hospital. The key is to involve your employees and physicians in streamlining the operation.

One last warning: Do not start with the bottom line and work backward with mandatory cuts based on the savings needed. This may result in cutting necessary resources from already efficient areas while allowing inefficiently operating areas to continue that way just with less staff. Focus on the operating areas individually and streamline the procedures. We have walked into many hospitals that feel their ED throughput and LOS are as good as they can get. That seldom turns out to be true.

I stated that staffing is your greatest expense which is true. But they are also your greatest resource. So work WITH them in improving efficiency and make them part of the process.

More on profitability practices tomorrow.

Mark Brodeur

Actuaries Speak Out On How To Reduce Healthcare Costs

2010-07-01T09:32:00.006-05:00

Two surveys by the Society of Actuaries concerning healthcare have recently been released. One survey was of actuaries themselves, the other one was of consumers. I was anxious to find out what keen insights the actuaries might add to reducing healthcare expenditures. While some of their suggestions were fairly obvious, not all of the findings were what I would have expected.

90% of the actuaries surveyed felt that reducing the number and severity of medical errors would reduce costs. This is pretty much a no brainer and I wonder why the number isn't 100%. 88% believe that fighting fraud and abuse in the system will lower costs. Again this is an obvious conclusion. But only 8% of the actuaries recommend making quality information of provider care more available to patients. Clearly this group does not believe as I do that it is quality first then finances follow.

The major suggestion from the actuary group was that there be more transparency between providers and patients concerning cost of care and treatment options. 86% recommend making prices for treatments more available and 79% recommend educating consumers on the efficacy of care. Their conclusion is that as consumers know what the cost of treatment is, they will be less likely to utilize services at the current level. This is a good thing if you assume that there is a lot of unneeded care being delivered. But what about the studies that have shown that patients do not seek out needed care just because they can not afford it. All this does is delay care that is ultimately needed and usually results in a much costlier hospitalization down the road.

Their other suggestion was that we pay consumers to be responsible about their own health. 90% feel that offering consumers financial incentives through their insurance plan can be at least somewhat effective in helping them make better choices as patients and live healthier lifestyles. If we are talking about discounts for patients who practice good health habits, I am all for it. But if we are talking about paying patients to take their medications when prescribed (the subject of an earlier post) I object. People need to take responsibility for maintaining their own health.

Overall, I am disappointed with the insights offered from these actuaries who will certainly be playing a role in developing the healthcare reform that is underway. There are a lot of cost saving ideas that were not addressed here.

More on this later.

Mark Brodeur

Are We Appropriately Treating Dying Patients?

2010-06-30T11:02:00.008-05:00

We have the best healthcare system in the world for treating patients with serious injury or disease. We don't do so well keeping patients healthier in the first place but that has been covered in a previous post. The problem with out current treatment system is that we do not know how and when to appropriately turn it off and allow a dying patient just to pass on in comfort and peace.

Dr. Martha Twaddle, Chief Medical Officer of the Midwest Palliative and Hospice Care Center in Chicago states that doctors usually know when an illness is incurable yet they continue to practice exhaustive medicine on these patients until there are no treatment options left. It is only when the patient is adamant they they wish to die in peace that the comprehensive arsenal of technology and drugs are withdrawn.

Even though over 80% of patients with progressive chronic illnesses say the want to avoid hospitalization and intensive care when they are dying, most do not get their wish. A study of Medicare patients shows that hospitalizations have risen over the last 10 years for these patients during their last six months of life. They also found that nearly one in three Medicare dollars is spent on patients treating chronic illnesses during their last two years of life.

I think that the suggestion of stopping appropriate medical treatment for a patient with two years life expectancy is going too far. But clearly we can declare patients as hospice candidates earlier than we are doing now. While the number of end of life hospitalizations has increased, the average time spent in hospice has gone down. One in three hospice patients had it for only a week or less when they died. This is a shame because hospice stresses comfort and quality of life which for the incurable is far more important than extending the body's physiological functions with machines.

It will probably be a cost cutting initiative that will reverse this trend rather than doing what is really best for the patient. Either way, we can be proud of our life saving technology and drugs, but lets use them on the lives that can truly be saved.

More on this later.

Mark Brodeur

How Fast Are Hospital Costs Rising? It Depends On What's Treated And Who's Paying

2010-06-29T15:43:00.010-05:00

The average cost for treating blood infection septicemia has risen 174% between 2001 and 2007 making it the largest cost increase of any condition and accounting for $12.3 billion in hospital expenditures. But the rate of increase varied significantly depending on who was paying the bill. For uninsured patients the rate of increase was 228%; for Medicare patients it was 172%; and for private insurance patients it was only 152.5%. Considering all the exposure that hospital acquired blood infections have gotten recently as the most preventable type of infection, this does not look good for hospitals. Medicare for one will cease paying for the hospital acquired infections, so I guess the cost increases for these are not significant.

Here are some of the other high rising conditions grouped by payer:

Medicare -Intestinal Infection 205%
-Kidney Failure 154%

Uninsured -Kidney Failure 179%
-Respiratory Failure 154%

Medicaid -Kidney Failure 160%
-Leukemia 127%

Private insurance -Osteoarthritis 120%
-Kidney Failure 119%

Clearly private insurance patients are seeing the lowest cost increases while the uninsured patients are seeing the highest increases. But before we get up in arms about the uninsured being exploited, there are several things to keep in mind. First, these figures do not take into account the huge bad debt percentage from the uninsured population. Second, many of these patients will become insured under healthcare reform. Still it is hard to justify the disparity between payers.

Truly our healthcare reform, at least at this point, is more about payment reform than care delivery reform. But based on the information above, this may be a good place to start.

More on this later.

Mark Brodeur

Quality of Emergency Care Varies Widely Among Hospitals

2010-06-28T10:34:00.010-05:00

120,000 additional lives could have been saved if all hospitals in the country operated their Emergency Departments as effectively as the top 5% in the country did. This is according to a new study released by Healthgrades in their first ever Emergency Medicine in American Hospitals Study. This report will now be published annually.

The most disturbing finding of the report is the wide variation that exists between hospitals, both individually and by state. More than 5 million Medicare records of patients admitted to hospitals through Emergency Departments at 4,907 hospitals between 2006 and 2008 were studied. The report focused on mortality rates of patients admitted with one of 11 conditions including bowel obstruction, COPD, diabetic acidosis, heart attack, stroke and pneumonia.

The top 5% of hospitals had a 39% lower risk adjusted mortality rate than the other hospitals. They also showed better improvement in their rates over the two year period than the other hospitals. This is very significant and should motivate all hospital Boards and top management to review their ED performance and focus on improvements.

There were also variations by state with over half of the top 5% coming from just five states: Ohio, Florida, California, Michigan and Illinois. Mississippi, Alabama and Hawaii had the worst overall risk adjusted mortality rates.

The report brought out another interesting fact that one half of all hospital admissions now begin in the ED up from 36% in 1996. For just the 11 conditions studied, Rhode Island, Delaware and Connecticut had the highest percentage of patients admitted through their EDs at 86-89%, while South Dakota, Nebraska and Kansas had the lowest admission rates. Still this makes ED function even more critical to overall hospital operation than it had been in the past. I urge all hospitals to make a serious effort to ensure that they are performing up to the standards of top hospitals. If you would be interested in a free assessment of your ED and how you are functioning compared to benchmarks, feel free to contact us at Compirion Healthcare Solutions at compirion.com.

More on this later.

Mark Brodeur

The Number Of Uninsured Adults Continues To Grow

2010-06-25T10:30:00.004-05:00

Healthcare reform with its expanded coverage will come none too soon, but can we afford it. According to the Centers for Disease Control and Prevention, over the last 10 years, the number of adults in this country between 18 and 64 years old without health insurance has increased steadily and is now at 21%. This is an increase of 3 million over the previous year. The obvious cause for the increase, as was discussed in a previous post, is the number of Americans who have lost their jobs or at least lost their health insurance because of the recession.

Correspondingly, the number of adults covered under private health insurance dropped from 68.1% to 65.8% in the last year. This means that roughly 15% of our nation's population, or 46.3 million people do not have health insurance. What will this do to financial projections for the Obama plan for expanded coverage? These projections were shaky at best and certainly seemed underfunded. Its great to think that all of these newly uninsured patients will be getting coverage, but how will it be paid for?

For months in my webinar on healthcare reform I have been saying that much of the funding for this will come from payments to providers, particularly hospitals. My concern in that the hospital's portion of this may have just gotten bigger with the news of more uninsured patients. The financing for this will certainly be worth watching.

There is a little good news in the report though. Coverage for children has actually increased over the last 10 years. This is due primarily to expansions of public plans. But the result is that just over 6 million children (8.2%) are without coverage which is down from almost 10 million (14%) just 10 years ago.

As healthcare reform becomes fully enacted over the next few years, we will see all categories of uninsured patients drop. This is good news as long as we have the financing in place to achieve this without making our most vulnerable hospitals casualties of the reform.

More on this later.

Mark Brodeur

Cutting Medicare Rates To Physicians Is Not The Answer

2010-06-24T13:56:00.005-05:00

How long will Congress continue to hang an ax over the heads of physicians threatening to cut Medicare reimbursement? We all know that healthcare costs are rising at a rate much faster than we can afford. We know too that the Medicare system is going broke at the current rate of cost increases. Now we also have the new healthcare reform law greatly expanding government paid coverage to those who have previously been uninsured. It is a perfect storm of financial ruin for publicly funded healthcare. So the answer is cutting rates to physicians? I don't think so.

This is not where we should start, for a number of reasons. First of all the cuts are not focused to address the disparity between primary care physicians and the specialists. Currently specialists can make five times the salary of primary care physicians. There is a shortage of primary care providers now that will continue to get much worse in the near future. Yet the cuts to Medicare will affect these physicians as much as the specialists. If they are truly effective, we will just make our physician shortage worse for the much needed primary care providers.

But will they even be effective? Perhaps HHS should learn from what they did to physicians administering chemotherapy back in 2003. Clearly an inequity in reimbursement had occurred by 2003 and some Oncologists were making record profits from Medicare patients appropriately receiving chemotherapy. Payments were too high so HHS decided to slash reimbursement across the board. The thought was that freestanding, for profit chemotherapy centers run by physicians would close and patients would return to hospital centers who would just eat the losses from these now unprofitable patients. Instead, the Oncologists just changed their orders for chemotherapy to more sophisticated but higher reimbursed drugs, thus increasing the overall cost of chemotherapy to Medicare. Some will argue that this was just a natural shift to newly available drugs. But those close the the situation will acknowledge that oncologists reacted to the reimbursement cuts without compromising the quality of care delivered to patients.

We do need to contain costs and we do need to make our healthcare delivery system more efficient. But this is a complex system that requires complex and comprehensive solutions, not just an arbitrary cut to physician fees.

More on this later.

Mark Brodeur

Quality First: Apparently Not In US Healthcare

2010-06-23T14:52:00.005-05:00

Yesterday I commented on patient safety becoming a victim of the recession. Today comes news that The US ranks dead last in healthcare quality when compared with six other industrialized nations. The study comes from a private Washington DC based foundation called The Commonwealth Fund. The major factors leading to this conclusion are the lack of access and equity in healthcare along with the inefficiency of providers.

Currently the US spends the most on healthcare of the countries studied ($7,290 per capita per year) and for this it gets the least of the seven countries. The Netherlands ranked first, spending only $3,837 per capita annually. Karen Davis, the foundation's president, thinks that the new healthcare reform law will improve this ranking when it is fully implemented in 2014. I'm not so sure.

Other nations have improved access through universal coverage and improving the relationship between patients and providers. One of the options they have set up is the development of medical "homes" which are being funded here as trial projects under the reform legislation. But will these be enough to make a significant impact. We seem to have the best system in the world for fixing people who are medically broken, but the worst system for preventing people from getting broken in the first place. The demonstration projects and funding for primary care under healthcare reform just scratch the surface on these issues. Also the improved coverage under reform still leaves 23 million Americans without any healthcare coverage.

By the way, this is not the first time that the US has ranked last on this list. We also came in last in 2007, 2006, and 2004. Also of note, the other countries studied besides the US and the Netherlands are The United Kingdom, Australia, Canada, Germany, and New Zealand.

Quality first and finances follow. Just look at the Netherlands.

More on this later.

Mark Brodeur

The Latest Victim Of Recession: Hospital Safety

2010-06-22T10:27:00.004-05:00

For years, hospitals have been considered recession-proof. They have survived during many turbulent economic times in the past. Most people thought that this most recent recession would be no different even though it has been a major one. Well the vulnerability of hospitals to economic distress has finally shown itself according to a new study published in the May/June issue of the Journal of Hospital Medicine. The study was a joint effort by the University of Michigan Health System and the St. Joseph Mercy Health System.

It appears that even though the economy has been terrible for an extended period, relatively few hospitals are closing down. Instead they are all reacting to the economic downturn by laying off staff, halting new construction projects and finding various other ways to improve efficiency and contain costs. Still, more than half of the hospitals in the U.S. reported negative margins in 2008.

All of these hospitals reported decreases in revenue from all sources; patient revenue, investment earnings and donations. Driving the decrease in patient revenue is the fact that many Americans have lost their jobs completely, or at least their health insurance. The number of managed care and private insurance patients has dropped significantly for many hospitals.

When hospitals start losing money on the bottom line, it usually does not bode well for patient safety. Understaffed and under financed hospitals are rarely safe. There certainly are ways for hospitals to improve efficiencies without compromising patient safety. In fact some efficiency efforts can actually improve safety and quality. We at Compirion help hospitals do this every day. But it must be done correctly. Issuing edicts to cut a certain level of costs simply because the bottom line has vanished will not work. There must be a well documented plan based on eliminating wasted efforts and materials, not just on cutting costs. If you need any assistance with this we would be happy to come assess your situation at no cost to you.

Hospital can survive this economic crisis but we must make sure that they do not do so at the expense of patient safety.

More on this later.

Mark Brodeur

Preparing For Our Primary Care Provider Needs

2010-06-21T09:44:00.004-05:00

There is very encouraging news from the Director of HHS, Kathleen Sebelius, about investments being made to make sure that we increase the number of primary care providers in years to come. I feel like someone is paying attention and acting before a potential crisis actually develops. We currently have a shortage of primary care providers and the future, particularly with the enactment of healthcare reform, certainly will be much worse. Experts point to several factors that are driving the shortage of primary care physicians. These include poorer reimbursement compared to other specialties, longer working hours, and a shortage of residency spots for training our future physicians.

The new investments to address at least some of these issues were made possible by the Affordable Care Act. These are building on the American Recovery and Reinvestment Act of 2009. Together they will help train and develop more than 16,000 new primary care providers over the next five years. $250 million will be allocated to this effort and will include the following steps:

1) $168 million to create additional primary care residency slots to train more than 500 new primary care physicians by 2015.

2) $32 million to train more than 600 physician assistants who will work under the direction of primary care physicians in the new medical homes thus extending the number of patients that can be seen by these physicians.

3) $30 million to encourage over 600 nursing students to pursue school full time.

4) $15 million for the operation of 10 nurse practitioner led clinics located in medically underserved areas that will also assist in the training of future nurse practitioners.

5) $5 million for states to develop innovative ways to encourage additional primary care providers in their state.

These steps don't exactly address the issue of paying primary care physicians more in relation to other specialties but they do start to address lifestyle issues and directly address an increase in training slots for future providers. I applaud the HHS Secretary on this announcement and hope to see additional efforts in this area.

More on this later.

Mark Brodeur

Healthcare Reform: The Good, The Bad, and The Ugly (Part 3)

2010-06-18T14:49:00.006-05:00

I spent the last two posts talking about the good and then the bad aspects of the new healthcare reform bill. I want to close this discussion today by addressing the significant changes ahead which can be viewed as opportunities or, more realistically, challenges. These challenges may not truly be ugly, but they will certainly require that hospitals adjust how they do business. Changes extend beyond the delivery system to concern tax exempt status and pricing transparency.

First the delivery system changes. We have long complained that the current system rewards volume and not outcomes. Well both Medicare and Medicaid are now shifting to value based payment systems. Unfortunately the approach will be largely punitive such as not reimbursing for readmissions or hospital acquired conditions rather than rewarding true high value providers. Also, as the system goes forward, hospital payments will be initially withheld and then released only after the hospital shows quality improvements from the prior year or attains defined quality benchmarks. By FY2013, hospitals with higher than expected readmission rates for certain diagnoses will have their payments reduced substantially. CMS expects this alone to save them over $7.1 billion over a ten year period. By FY2015, the same thing will apply to hospital acquired conditions.

The intent is to radically reshape the healthcare delivery system. There will be pilot programs to test bundled payments to providers and create accountable care organizations both of which are intended to promote further collaboration between physicians and hospitals. Again, this would be a positive development if the payment approach was not strictly punitive in nature.

Hospitals need to be aware that their tax exempt status will continue to be challenged under the new legislation. It will require them to conduct a community needs assessment and report annually on their actions to address these needs including reaching out to charity care patients. There must be a publicized a financial assistance policy which meets federal requirements and collection efforts can only proceed after reasonable efforts to see if the patient qualifies for charity care.

In closing, it is imperative that hospital be prepared for the changes coming. First of all they need to understand the legislation. These three posts only scratch the surface of the legislation. As you wade through the pages and pages of change, you will see that some of it is good, some bad and some downright ugly.

More on this later.

Mark Brodeur

Healthcare Reform: The Good, The Bad, and The Ugly (Part 2)

2010-06-17T09:33:00.006-05:00

Yesterday I covered some of the positive aspects of the new healthcare reform legislation. Yes, there are some. Today let's take a look at some of the more troublesome points in the new plan. This could probable become a very exhaustive list, but I will choose to stick with the highlights (or perhaps more accurately, the lowlights). These include the obvious payment cuts to help finance the expanded system and the employer "free rider" penalty which will cut into hospital bottom lines.

About half of the new healthcare reform legislation's cost, estimated to be $938 billion, will be financed through savings coming from the current healthcare system. These savings will largely be generated by just cutting reimbursement for existing services. Hospitals are expected to shoulder about $149 billion in cuts to market basket updates and disproportionate share hospital (DSH) payments. Hospitals will also be ultimately affected indirectly by the cuts being made to other related industries such as health insurers, pharmaceutical manufacturers and device companies.

In making these cuts there is the assumption that hospitals are being run inefficiently and that through there own initiatives, hospitals will be able to become far more productive and thus sustain the cuts with no damage to their bottom line. I have no doubt that most hospitals can become a bit more efficient. We at Compirion Healthcare Solutions assist hospitals with this effort every day. But to base the financing of this huge initiative on a general assumption like this without knowledge of the impact this will have on struggling but critically necessary hospitals is irresponsible.

To make matters worse, the cuts to DSH payments are based on another assumption that many of the current payments are not justified based solely on the cost of providing indigent care. Also that these costs will go down when coverage is expanded. I don't know of many high DSH hospitals that are making record profits like some of the insurance companies or pharmaceutical manufacturers. Is this really the right place to cut?

Finally hospitals need to consider the impact of the free rider penalty they may face as an employer. Hospitals as a service industry are labor intensive and healthcare insurance costs are a major expense to the bottom line. Any employer, including hospitals, with 50 of more employees that offers a qualified health plan and contributes any portion to the premium must also provide a free choice voucher equal to the employee's premium contribution. The employee can then use this voucher to purchase insurance in a state exchange. If the hospital plan does not meet all requirements they are subject to a free rider penalty. If this sounds confusing, it is. But hospitals need to be aware of their financial liability.

So much for the bad in the news healthcare reform at least for this go around. I am sure that more will come out later. Tomorrow I will discuss the significant system reforms (the ugly) that will be occuring.

More on this later.

Mark Brodeur

Healthcare Reform: The Good, The Bad, and The Ugly (Part 1)

2010-06-16T15:18:00.002-05:00

Most of my colleagues are dreading the full implementation of the new healthcare reform law and hoping that the Republican surge expected in elections this November will lead to blockage of most reform measures before they start. A few CEOs with higher Medicaid populations are quietly rooting for President Obama and expecting some positive developments. The truth is that there are some elements of the new bill that will be good for many hospitals, some that will be bad for most hospitals and some that will change things forever. Maybe ugly is too strong a word for this last category.

Let's start with the good. Provisions such as changes to insurance markets, malpractice reform demonstrations and funding to help hospitals with high volumes of preventable readmissions will help hospitals grow revenue while reducing costs. That is any hospital's quick formula for success. Let's look a little deeper at these.

Insurance coverage will be expanded to 32 million people who do not currently have insurance and mostly fall in hospitals' bad debt and charity categories. This expansion of coverage will occur by increasing regulatory oversight of commercial insurers, using tax codes and subsidies to mandate coverage, and creating state based exchanges to improve accessibility, transparency and efficiency of insurance markets. This last step of state based agencies is already off to a bad start with most states declining the option to run their own programs and instead letting federal programs operate in their states for this purpose. It appears that this aspect of healthcare reform is grossly underfunded. We will wait and see how overall funding for the additional coverage works out.

With Democrats controlling all aspect of the new healthcare reform law, no one expected it to include any sweeping malpractice reform which if done right could save many billions. But it does include $50 million over five years for malpractice demonstration projects. The money will be used to explore alternative methods to resolve medical liability claims, such as health courts and early offer programs. Its not a lot but at least its a start.

Facilities fighting high readmission rates will be able to join a five year Medicare pilot program to reduce them. The program starts next year and gives priority to small community hospitals and those with high undeserved populations. Hospitals will be paid to intervene on patients who are at high risk for readmission using tools such as comprehensive medication reconciliation at discharge. I certainly appreciate this approach over the current mentality of just denying hospitals payment for readmissions regardless of the cause. Reimbursing someone to prevent readmission makes a lot more sense.

This is pretty much it for the good. The next two days I will talk about the bad and the ugly.

More on this later.

Mark Brodeur

What Happened To The Personal Responsibility For Our Own Healthcare?

2010-06-15T09:52:00.006-05:00

We all have some personal practices that may put our health at some degree of risk, things like overeating, smoking, alcohol consumption, high stress jobs, etc. Some people take that risk to unreasonable levels resulting eventually in a medical catastrophe. For some it is lifestyle and upbringing that brings out this behavior. For others it is physical addiction. But for some it is a financially driven decision.

I just read two studies that each in their own way amaze me about human behavior and the influence of money. In the first, it was discovered that by paying noncompliant patients to take the medicines that were prescribed for them, they suddenly became more compliant. Keep in mind that these patients had some significant medical problems resulting from not taking their prescriptions regularly. Apparently they were ok with that. To make matters worse, after a period of payment, this incentive was removed. The result was that patients regressed back to "forgetting" to take their meds. What is going on here? As we move forward with healthcare reform and treating these non compliant patients' eventual acute crises becomes our financial responsibility, we should have a say in their behavioral choices. Perhaps there should be some measure of personal responsibility demonstrated in order to qualify for unlimited healthcare coverage.

The second study states that last year over 2 million cancer survivors did not get needed medical services because of concerns over the cost of care. This represents 18% of all U.S. cancer survivors. Some of the care avoided was not directly related to cancer treatments but most of it was. This behavior may be a little more understandable than the first study where patients already had access to drugs and just chose not to take them. Still, once a diagnosis of cancer is given, I would think that patients would make treatment their first financial priority. In these patients, a more liberal healthcare coverage plan certainly should have a positive impact. I would hope that removing financial concerns would improve their compliance significantly.

Healthcare coverage should be expanded to all those who need it. But as we do this, each of us also carries a personal responsibility for at least a level of good health practices. If you choose not to take medications that are prescribed and given to you, we as a society should not be responsible for the cost of your ultimate medical crisis. At least that is my opinion.

More on this later.

Mark Brodeur

Good News, Bad News For Healthcare Acquired Infections

2010-06-10T13:49:00.007-05:00

On the heels of last week's encouraging report that hospital acquired infections (HAI's), especially blood stream infections, are decreasing, comes the not so good news that infection control practices in many Ambulatory Surgical Centers (ASC's) are substandard. In a study of ASC's in three states, two thirds showed lapses in infection control practices that put patients at higher risks.

The proliferation of these centers driven by financial incentives to the investors, has caused a significant number of minor surgeries to move from hospital settings to freestanding centers. In many cases these centers provide a greater level of convenience for the patients and sometimes cheaper out of pocket expenses. Meanwhile physicians enjoy more productive days because of faster turnaround times as well a generous return on their investment. This is all well and good as long as patient safety is given the same priority as hospital based surgical centers and quality measures are not compromised.

In light of this study, Kathleen Sebelius was quick to respond with the HHS Action Plan To Prevent Healthcare Associated Infections. She stated that ensuring the safety of patients in all healthcare settings was the top priority for HHS. That's why $50 million dollars in funding from the American Recovery and Reinvestment Act is being allocated to prevent HAI's. Of that, $10 million will be spent on improved processes and increased frequency of inspections for ASC's. Also the Affordable Healthcare Act calls for improvements in healthcare quality and reduced HAI's. Further, she states that just because procedures are being done outside the hospital setting does not mean that patient safety standards and infection control measures are any less important.

I applaud the HHS Secretary for her strong stand and fully support her efforts to demand compliance from freestanding surgery centers, not just because it keeps a level playing field with hospitals but most importantly because it maintains protection for our patients.

More on this later.

Mark Brodeur

A Warning For Healthcare Providers: Don't Share Patient Info On The Web

2010-06-09T08:51:00.002-05:00

Social networks such as Facebook have revolutionized how many of us, especially the younger crowd, interact and share information. This can have many positive effects drawing people together who had previously lost all contact. But it also has a negative side. We have already seen the cyber-bullying cases. Now comes a new problem; nurses and other providers sharing stories about patients on their Facebook page.

At least five employees at Tri City Medical Center in California will most likely be losing their jobs because of postings they made to Facebook talking about patients they cared for. Although no names or ID numbers were used, the postings appear to be a a clear HIPAA violation according to sources at the hospital. The nurses involved claim that they only posted hypothetical patient scenarios to discuss with other nurses for educational purposes. Hospital officials contend that the information posted was about actual patients and for the purposes of gossip.

This case merits a warning to all healthcare providers that they keep all patient information confidential, particularly when posting on a public, or at least semi-public website. I would like to think that there are never any inappropriate discussions about patients, but I'm sure that sharing this kind of information among colleagues is not new. The problem is that leaving written information on a website forces the hand of the hospital to take action.

Let's take our patient's rights seriously and leave Facebook for connecting with friends.

More on this later.

Mark Brodeur

Creating A Culture Of Patient Safety: The Role Of Medical Schools

2010-06-08T09:53:00.005-05:00

As hospitals today try to build a culture of Patient Safety, everyone looks to the CEO to lead this change and integrate patient safety as every body's primary concern. And this is how it should be. But this alone will not build the desired culture. There are many other providers and support personnel who must also be part of this new culture. So how do we ensure that all of the physicians are part of this process? It would be helpful if this were part of their basic training in medical school, but sadly this is not the case.

Rather than teaching future doctors about patient safety, teamwork and how to learn from their mistakes, medical schools throughout the U.S. continue to focus myopically on basic science and clinical knowledge. This is the conclusion of the Lucian Leape Institute at the National Patient Safety Foundation. They state that medical schools and teaching hospital leaders should place the highest priority on creating learning cultures that emphasize patient safety, model professionalism, enhance collaborative behavior, encourage transparency, and value the individual learner.

Another report put together by a 40 member roundtable of medical students, medical educators and leaders in patient safety concluded that effective interpersonal skills and the science of improvement can be just as important as the basic concepts that have been taught in medical schools for generations. They conclude that each physician that grasps the multiple dimensions of patient safety is one more physician likely to find humility in the challenge and therefore likely to provide safe care to his or her patients. More importantly, such a physician is far more likely to lead the development of positive organizational cultures and patient safety priorities.

Besides biochemistry, let's teach our future physicians what a patient safety culture really means.

More on this later.

Mark Brodeur

Who Is Responsible For The Abandoned Medicaid Paitients?

2010-06-07T10:25:00.006-05:00

As we gear up to significantly expand the ranks of Medicaid patients under the new healthcare reform law, perhaps we should take a look at some of the issues that have not been resolved under the current program before we make them even bigger. One of the most significant issues is taking care of the debilitated low income Medicaid patients that need rather intensive extended care. Nursing homes reject hundreds of these patients claiming that they are unable to safely meet the patient's needs. The real reason, recently reported on by the Seattle Times, is much more sinister. These patients require more services and are definitely money losers for the nursing homes.

Their answer is to dump them off on hospitals. I have certainly seen this throughout my career. Normally the call from the nursing home comes in the evening or on the weekend when the hospital's regular crew of preadmission screeners are not on duty. Or the patient may simply show up in the Emergency Department straight from the nursing home. Once they are admitted to the hospital as an inpatient and the acute condition is fully treated, suddenly they do not meet criteria to return to the nursing home they came from. These kinds of patients are known throughout the community and soon none of the nursing homes will take them. Again, as with many other components of our uneven healthcare system, it falls upon the hospital to eat the cost of care for these patients.

I have not seen anything in the new healthcare plan that addresses these patients. As Medicaid coverage extends to more indigent patients who are currently uninsured, the numbers of these "in-between" patients will certainly grow. I don't condemn the nursing homes who are struggling in their own right to stay afloat with underfunded Medicaid payments. But abandoning them on hospital doorsteps is not the answer either.

Let's work this issue out before making our problems bigger with an expanded system.

More on this later.

Mark Brodeur

"Never Events" Still On The Rise In California

2010-06-04T11:15:00.007-05:00

With all of the efforts hospitals have put into quality improvement and patient safety, it is discouraging indeed to read a report like the one issued recently by the California Department of Public Health. The report highlighted that "never events", particularly leaving foreign objects in patients following surgery, are on the rise. Last year California hospitals reported 197 cases of retained foreign objects which brought the two year total to 350. That's 14% of all the preventable errors reported during that two year period.

What's going on with these hospitals? I understand that we are dealing with a complex situation that is run by humans who are prone to error, but where are the checks and double checks in the procedure to account for the possibility of error? San Francisco General Hospital after being fined by the state for leaving a surgical sponge in a patient, has now changed its policies to significantly reduce the likelihood of this happening again. Good for them, but why did it take a fine to motivate them to do something that should have been done long before this?

There are high tech solutions being applied to this such as bar codes and radio frequency detection systems, but it still boils down to checks and double checks of all instruments, pads and sponges used during a procedure. There is no single solution that can be universally applied to all hospitals. It is human nature that after years of double checks that never find a missing sponge to get lax and not catch the one that finally happens.

Penalties and fines are not the answer to change culture. Facing public exposure of such errors is probably a stronger deterrent. But building a culture of patients first is the only real way to address this issue. Because we are human, we probably can't keep this number at zero. But we can sure do a darn sight better than we saw last year in California.

More on this later.

Mark Brodeur

Hospitals Still Struggle With Providers Washing Their Hands

2010-06-03T10:11:00.002-05:00

It seems very basic doesn't it? Providers need to wash their hands before and after interacting with patients. Every care provider knows this as well as the potential risks to patients and themselves for not following guidelines. So why is this so hard to do? I'm not sure why but I know that it is still an issue.

In the May issue of Applied Nursing Research a study of 67 providers who were followed over a course of 16 weeks showed them to be compliant with handwashing guidelines only 34% of the time. Doctors were more compliant washing their hands after procedures rather than before (72% vs 42%). This suggests that they are far more interested in protecting themselves rather than their patients. Almost all hospitals have gel dispensers either inside or just outside every patient room. What will it take to get providers to use them?

We at Compirion have helped hospitals address this issue. At Bay Medical Center in Florida the handwashing compliance was about 25%, even worse than this recent study. Like most hospitals we see, it had fallen to Infection Control to be the handwashing police. But they could not have a large enough presence to obtain good compliance. So we helped them create a Steering Team to address this issue. It had widespread, across the board involvement from the CEO down to housekeeping. With this kind of attention, behaviors changed rapidly. Their compliance rose to the 90% range and has remained there after the initial push.

By the way, their overall hospital mortality rate dropped from 3.4 to 2.1 during this period. Was this simply coincidence? According to MedPage Today, there are over 90,000 deaths a year from healthcare related infections and additional costs of $5-6 billion to treat them.

Excuse me, I have to go wash my hands.

More on this later.

Mark Brodeur

Who Coordinates Care For Discharged Patients?

2010-06-02T10:53:00.005-05:00

With our current patchwork system of independent providers that includes primary care physicians, specialists, hospitals, home care providers and a host of support services, sometimes the communication between them is lost. When this happens, the patient who is dependent on the coordination of all these services is the one who suffers. This gap seems to be most evident for the newly discharged patient who still must follow a regimen of medication and/or treatment following discharge from the hospital. Where does the hospital's responsibility stop and the primary care physician's responsibility resume? Or is it the job of the specialist? As lengths of stay get shorter and we handle more care on an outpatient basis, this becomes an even bigger issue.

A recent study in the Journal of the American Medical Association highlights this issue relative to heart failure patients. They found that post discharge death rates and readmissions have increased for these patients between 1993 and 2006. At the same time, length of hospital stay has decreased by 2.5 days from 8.8 to 6.3. The study was not conclusive that the shorter length of stay caused the increase in either deaths or readmissions. There may have been other outside factors involved. But the point is that we have a gap in our healthcare system and it seems to be getting worse.

The popular response to this seems to be that we hold the hospital responsible. First we incentivize them to shorten length of stay because we assume they are keeping patients unnecessarily long then we deny payment for readmissions because we assume they are now discharging patients way too early. The fact is that there are many factors that contribute to a patient's readmission. Many of the are out of the control of the hospital. Some of them are out of the control of any of the providers. I have discussed this issue in more detail in a previous post.

The answer is that it involves more than just the hospital. All providers and the patients themselves play a role in this. The key is to have a system where all providers and the patients are involved in their post discharge treatment plan. There are some models being developed as part of the new healthcare reform that show promise for addressing this issue. Let's hope they work.

More on this later.

Mark Brodeur

Decrease in Central Line Infections Saves Lives (And Money)

2010-06-01T09:45:00.007-05:00

Quality first and finances follow. That is my mantra because it keeps demonstrating itself over and over in healthcare. The latest example is the Ceneters for Disease Control and Prevention report that central line infections are down over 18% from the previous three years across the country. This is a victory in two respects. First getting the information at all has been a challenge. Remember, if you can't measure it you can't manage it. Second, the fact that we are seeing a significant drop of this magnitude is statistically significant.

There was a feeling for years that hospitals were tracking their infection rates and keeping them secret because they were ashamed of the results. But the truth for many institutions was even worse. They were not tracking them at all. Now that these hospitals have been forced to measure this they have also been forced to manage it and we are seeing the results of these efforts.

It is estimated that there are 1.7 million hospital associated infections each year which claim 100,000 lives and add $30 billion in healthcare costs for treatment. Among these, blood stream infections are the most preventable. The recent drop in them must be attributed to the fact that hospitals must now report these numbers and are therefore more strictly adhere to CDC guidelines.

The good news is that lives are being saved and as a bonus, hospitals are saving money on the treatment costs of preventable infections. Looks like a win-win scenario.

More on this later.

Mark Brodeur

Another Patient Safety Tip: Avoid Physician Interruptions

2010-05-27T14:15:00.003-05:00

I recently shared a study that showed how nurses who were interrupted repeatedly during medication administration were far more likely to commit medication errors. Now comes another study published online by Quality and Safety in Healthcare that shows similar outcomes with physicians. Although this one has a slightly different twist. It seems that physicians who get frequently interrupted fall behind on their tight schedule and therefor cut corners to help make up for lost time. This behavior was shown to have put some patients at higher risk.

The study was conducted at the University of Sydney in Australia and covered 40 physicians at a 400 bed hospital. They found that physicians were interrupted an average of 6.6 times per hour. Once interrupted, physicians either completed tasks in a much shorter time frame than they should have or skipped completing the task completely. Tasks interrupted 3 times or more that had a predicted completion time of 23 minutes were finished in just over 6 minutes following interruptions. One method employed frequently by the physicians was multitasking.

The good news is that only about 11% of the physician's tasks were interrupted one or more times. But as the author notes, "interruptions add significantly to cognitive load, increase stress and anxiety, inhibit decision-making performance and increase task errors. Unlike the nurse study, this one did not look at the necessity of the interruptions. But it can be safely assumed that many of the interruptions can be avoided.

Let's leave our doctors, and nurses, alone when they are deeply involved in patient care.

More on this later.

Mark Brodeur

Hospital Closures Create a Crisis In Queens

2010-05-26T11:30:00.004-05:00

Yesterday I talked about the ultimate impact of reimbursement cuts to hospitals saying that this could lead to closures. The Wall Street Journal on Monday ran a scary article about how this is already happening in the borough of Queens in New York City. In the last two years, three hospitals have closed in Queens decreasing its bed capacity by almost a third and giving it the lowest ratio of beds per 1000 population in the area (1/3 of Manhattan's capacity). One hospital closed at the request of a state commission and the other two just went bankrupt.

How has this affected healthcare? At New York Hospital Queens, patients are waiting an average of 17 hours to be placed in beds. At Jamaica Hospital Medical Center, the Emergency Department has been expanded into a former cafe and conference room to try and cope with the huge growth in new patients. The ED there was designed for a maximum of 60,000 patients a year and they are currently seeing over twice that. At Compirion we offer excellent assistance to hospitals preparing for surges, but dealing with this type of situation would be a challenge.

Patients at these hospitals describe the situation as being in a war torn third world country. Sometimes ambulances need to park outside the ED with their patients waiting for their turn to get in the hospital. Hallways are filled with gurneys. ED nurses see up to 28 patients during a 12 hour shift. Requesting that ambulances go on diversion doesn't do any good because every other hospital is on diversion too.

Some patients are avoiding this chaos by traveling to other boroughs for healthcare. But what happens when these hospitals face the same extreme measures? To reiterate what I said yesterday, simply cutting payments to hospitals will not solve our current crisis. Continued cuts will just spread the situation in Queens to the rest of the country. We need a coordinated effort to address all of the areas of inefficiency, payment inequities and abuses of the system.

More on this later.

Mark Brodeur

Rate Freezes, Even Cuts Are Expected At Many Hospitals

2010-05-25T15:20:00.003-05:00

The future for hospital reimbursement appears to be every bit a s bad as people had projected. Massachusetts health insurers have announced that they want to freeze or slash payments to some hospitals and physician groups this year, thus setting up the most contentious negotiating atmosphere we have seen in years. Why are things different? Because insurers are confident that they have the sympathy of politicians, regulators and employers.

Healthcare costs are rising out of control and the simplest answer appears to be just pay hospitals less. That answer may be easy but it is not going to solve the problem. Two thirds of hospitals in the country already lose money under Medicare. State Medicaid programs are worse. And managed care companies have long ago stopped any cost shifting in their direction.

So how will this play out? Certainly not well for most hospitals and ultimately not well for many patients. Yes, a number of hospitals can get themselves more efficient and shave some costs. But these are not the big dollars of waste in the system. Lynn Nicholas, President of the Massachusetts Hospital Association thinks this will ultimately lead to layoffs, mergers and closures for some hospitals in the state.

Massachusetts has been the bell weather for many trends in healthcare. This looks like another opportunity to see what will soon be happening around the country. Have some powerful systems used their clout over the years to force some favorable reimbursement? Quite possibly. But to take the approach that healthcare saving can be had simply by cutting rates to the average hospital without consequences is not well thought out. Let's tackle some of the areas with real waste and lets start with tort reform legislation.

More on this later.

Mark Brodeur

High Tech Devices May Assist Effectiveness of Healthcare Reform

2010-05-24T13:17:00.006-05:00

One of the major goals of healthcare reform is to promote prevention, early diagnosis and primary care intervention for the greatest part of the population currently living unhealthy lifestyles. A significant obstacle to this has been the reluctance of patients to follow up on physician suggestions for testing and treatment usually done at hospitals. And even if they start now that they will have insurance coverage, the costs to the system will be significant.

New technology may soon be providing solutions to both of these issues. Soon many diagnostic capabilities that have been only done in hospitals may be available in physician offices or even patient homes. The combination of new lower cost computing devices, digital sensors and the web are making diagnosing and monitoring patients far more accessible.

Healthcare reform is pushing the development of primary care alternatives like medical homes to be more available to patients. The problem has been that accurate diagnosis and monitoring of the patients condition have relied on patient followup to hospital based or other freestanding modalities. What if all of these modalities could be available in the medical home with monitoring devices sent home with the patient?

This is not far off. Consider the case of sleep studies. Up to this point to conduct a worthwhile sleep study has required that the patient spend the night in a hospital based or freestanding facility in a strange environment hooked up with wires coming from everywhere. This is how we expect to study the patients normal sleep patterns. The inconvenience and intimidation of this test keeps many patients away until symptoms are severe. Also the cost of this test can be as much as $4,000.

Watermark has now developed a device that is smaller than a deck of cards and worn on the patient's forehead held on by a headband. There is a tube which runs to the patient's nose. The patients wears this at home for a night or two then the information that it gathered is sent via web to a sleep disorder specialist who returns a diagnosis within 48 hours. Total cost is well under half of a conventional sleep study.

As more diagnostic modalities like this one are developed. We can truly make diagnosis and monitoring of patients far more accessible. Cost savings will come not just from the testing itself but also from keeping these patients conditions in check thus avoiding costly hospitalizations.

More on this later.

Mark Brodeur

Interesting Study On ED Overuse By Medicaid vs Uninsured Patients

2010-05-21T13:17:00.002-05:00

Earlier this week I discussed the need to prepare for the onslaught of new patients who will suddenly have insurance coverage. The plan is that they will immediately start using available primary care resources but the reality is that they will continue using the Emergency Department as their primary care provider unless we all take action to redirect this behavior.

A new data brief from the Centers for Disease Control and Prevention presents interesting information that indirectly supports this concern. Their study dismisses the longstanding belief that uninsured patients use the ED much more than privately insured patients. It turns out this is not true which comes as somewhat of a surprise to me. ED use by uninsured patients is only a few percentage points higher than privately insured patients. But Medicaid patients (who would be uninsured without this program) have much higher ED use rates. Medicaid patients in the 45-60 year old range had more than double the ED use rate of other patients. 18-44 year old Medicaid patients also had significantly higher use rates.

On one hand it is surprising to learn that uninsured patients do not necessarily overuse EDs as a primary care provider. On the other hand is is disappointing that patients who have had access to insurance, albeit Medicaid, have continued to use the ED as their entry into the medical system rather than establishing a relationship with a true primary care provider. This just reinforces the fact that we have a lot of work to do in terms of education and accessibility of primary care resources if we want to prevent our EDs from beings overrun with newly insured patients.

I think that Dr. Brokaw's points that I discussed earlier this week are all very valid and this study just reinforces the fact that we need to be proactive in this area.

More on this later.

Mark Brodeur

Hospital Patient Satisfaction Scores Fall To Six Year Low

2010-05-20T10:59:00.002-05:00

If you have seen the Patient Satisfaction scores at your hospital dip, you are not alone. According to the American Consumer Satisfaction Index (ACSI) hospital patients are unhappier than they have been in six years. The average score is 73 out of 100. Emergency Departments have fared even worse with an average score of 54 out of 100. The only area showing an increase was Ambulatory Care which rose 1% to 81.

This is obviously bad news for everyone except for consultants like us here at Compirion who make a living helping hospitals improve metrics such as Customer Service scores. In this current climate of consumer driven healthcare and demand for high value hospitals it is particularly important that hospitals satisfy their patients. Exceeding expectations is not just a trite motto but a necessary business strategy for survival. Simply put; satisfying patients leads to growth in new business.

Perhaps you can look at the current drop in customer service scores as a business opportunity to get a jump on the competition. Something is happening across the nation. Emergency Departments saw a 12% dip in satisfaction scores for the first quarter of this year. They drug overall hospital scores down 5% with them. This is just more proof of how vitally important the ED's reputation is on the entire hospital.

By the way, we can't blame the dip on a sour economy that just has people upset in general. According to ACSI, energy was the only other industry besides healthcare to see a drop. All others have seen increases. The report does not explain why there has been such a drop and I must confess that I am at a loss to explain this as well. I invite anyone with a perspective on this to please share their opinions. From my viewpoint, hospitals are focusing on this now more than they ever have before. If you have not done so yet, now is a golden opportunity.

More on this later.

Mark Brodeur

Four Steps Necessary To Keep Non Emergency Patients From Using the ED

2010-05-19T11:41:00.009-05:00

With the passage of healthcare reform and coverage being provided to many folks who have been uninsured for years, it is assumed that they will now seek primary care and not inappropriately use Emergency Departments. This may happen over time but will not occur by itself. In fact, based on what happened in Massachusetts some years ago when insurance coverage suddenly became available to many who did not have it before, quite the opposite happened. Patients were used to going to the ED for primary care and minor issues. Now that they had insurance coverage they were even more prone to visit the ED.

This is a terrible way to deliver this kind of care for a number of reasons. First and foremost it is extremely expensive. A typical ED visit costs about 5 times what a clinic visit would cost. Secondly the care in an ED is episodic. The ED physician has no established relationship to the patient and no history to work from. This often leads to overtreatment and rediagnosing established chronic conditions of the patient.

So as we prepare for the addition of many new patients who will have insurance coverage for the first time, it is important that we take steps ahead of time to ensure that that are treated in the appropriate setting. We can not sit back and expect that this will happen by itself. The Washington Post recently published an article written by a San Francisco ED physician, Dr. Jennifer Brokaw, who lists 4 steps that should be occurring now.

1) Establish more offices, clinics and urgent care centers, particularly in medically indigent areas.

2) Invest in more allied health professionals and physician extenders. It is clear that we will not have a sufficient number of primary care physicians. We need to be ready to delegate some of this works to others.

3) Start coordinating the various delivery systems that currently do not communicate with each other. We know a great surge in demand is coming. Providers need to work together to make sure the supply of providers and support modalities is adequate.

4) Take advantage of the internet and social networking sites that are used by practically everyone. Medical information about diseases and conditions can be disseminated as well as directions to the nearest and most appropriate venue for care.

We know this is coming and can even predict the outcome if we are not adequately prepared. So lets head this advice and make this transition as smooth as possible.

More on this later.

Mark Brodeur

More Bad News For The Cost Of Healthcare Reform

2010-05-18T08:43:00.003-05:00

One of the key provisions of the new healthcare reform law is ensuring that people at high medical risk and those with pre-existing conditions will be able to obtain healthcare coverage. Often they are unable to get coverage in our current patchwork system. This is a very laudable and necessary component of the plan. But it appears that its cost to the system was not realistically estimated when putting together the cost figures for the new legislation.

The plan is to create high risk insurance pools in each state for all uninsured patients. $5 billion has been set aside to finance these plans. States are invited to set up their own plan and they would receive federal funding to operate them. If states opt not to develop their own plan, the federal government will set one up in that state. Thus far 18 states have decided against accepting the money and setting up a plan. Here's why.

It currently costs $2 billion annually to cover about 200,000 people under similar plans operating in 34 states. It is projected that the new high risk pools will be covering 2 million additional people between now and 2014. In addition, it is estimated that this pool of patients will be costlier than current pools. Therefor the real cost estimates are somewhere between $25 and $40 billion. The current $5 billion in funding is expected to run out by 2011. States are legitimately concerned that if they set these up, they will be left holding the bag when funding dries up.

Once again, I am not suggesting that we abandon this concept. Dealing with this important issue is necessary. And there certainly are significant costs already in the system to provide care for these patients. You can find these costs on the hospital's bad debt and charity write offs. But before we charge in with a grossly underfunded fix that will fall flat in a year, lets think this through. This is another example of the cost paid for rushing a bill through Congress without adequate input and discussion.

More on this later.

Mark Brodeur

Healthcare Reform Now Predicted To Be More Costly Than Originally Projected

2010-05-17T10:38:00.004-05:00

Who didn't see this one coming? Now that we have healthcare reform passed and all of its provisions that were contained in the 2000 page document are being analyzed, it appears it will cost us a bit more than projected. The Congressional Budget Office (CBO) is now estimating that the new law may cost an additional $115 billion over the next 10 years. If Congress approves all of the additional spending called for in the legislation, it could push the 10 year cost of the overhaul above $1 trillion.

The additional expenses include $10-20 billion in administrative costs for agencies to carry out the law, $34 billion for community health centers and $39 billion for Indian care. These costs were not included in earlier estimates because they are not mandatory under the new law. They will need Congressional approval at a later time. My guess is that this approval will be difficult to obtain particularly after this November's elections.

Don't get me wrong, I believe that healthcare reform is not only a good thing but also necessary. Ignoring the uninsured and pretending that they currently do not cost the system anything is folly. I am glad to see coverage for these folks expanded. I am also pleased with the push for preventive and primary care coverage. But keep in mind that the real driver of healthcare reform is the fact that the current system can't continue to finance the cost increases we are seeing. We need to focus on how to make healthcare more cost effective. Some of the provisions in the new law address this while other obvious areas that do not fit the current political climate (ie: tort reform) are being ignored.

I don't see how the system will support an additional $115 billion over the next 10 years. Obviously not all of the provisions will be fully funded. But as cuts are made to make the new healthcare reform more affordable, let's not forget the real reason that we need it in the first place.

More on this later.
Mark Brodeur

Twelve Global Megatrends That Will Revolutionize Healthcare (Part 2)

2010-05-14T10:55:00.004-05:00

Yesterday I presented the first 6 megatrends identified by the Harvard Business Review that will have a dramatic impact on healthcare. Today I want to finish the list. It should be noted that many of these trends have been underway for some time but in some cases have gone unnoticed.

7) Evidence based medicine. Efforts in this area have been underway for years. Many studies have identified clinical variations by provider and by areas of the country that are not adequately explained. As hospitals focus on becoming high value providers, there will be much more attention to standardized clinical pathways and addressing deviations.

8) Non MD's providing care. The new healthcare reform legislation is strongly supporting models like the medical home which change the role of the primary care physician and the specialist. The specialists are being de-emphasized with the primary care physician doing more of their role while overseeing a larger group of patients. The actual interaction with these patients will be done by physician extenders.

9) Payer's influence over treatment decisions. The old model of making treatment decisions strictly on a medical basis regardless of cost are gone. Cost of care is being factored in both directly by payers refusing to cover certain treatments and indirectly by patients opting not to pursue treatment if their out of pocket costs are too high.

10) The growing role of philanthropy. With cuts in reimbursement coming from all payers and expenses continuing to escalate, hospitals need to become increasingly resourceful. Cutting costs and growing business will carry you only so far. Many hospitals rely on the community support they can obtain from individuals and corporate sponsors. With the current economy, the source of income is also being threatened.

11) Prevention is the next big business opportunity. Prevention has always been supported as a great idea that no one wants to pay for. We realize the economic benefit down the road of an investment in prevention today but there were no sources to pay for it until the new healthcare reform legislation. Now we will see numerous entrepreneurs become socially conscientious to promote better health.

12) Medical tourism. This is also nothing new but may be more prevalent with changes occurring in health care delivery and reimbursement. Patients with money will go to where they can receive the best care possible.

These trends, some new, most not so new, are impacting our healthcare system as we enter a paradigm shift under the new reform legislation. I am reminded of the Chinese curse, "May you live in interesting times".

More on this later.

Mark Brodeur

Twelve Global Megatrends That Will Revolutionize Healthcare (Part 1)

2010-05-13T13:19:00.006-05:00

The Harvard Business Review has identified 12 healthcare megatrends that dramatically change how the world approaches healthcare and reacts to its largely unrecognized consequences. It paints a bleak picture of what will happen to healthcare costs in the future. Because of this, the role of healthcare providers will be diminished and the role of payers will be expanded involving treatment decisions.

These 12 trends are:

1)Innovation and demand soar in emerging economies. Our appetite for new treatments and cures will not diminish simply because the current healthcare system is under funded and overtaxed. We simply will not walk away from the promises of research and development.

2) Personalized medicine and technological advances. With the advent of genomics, treatments can be tailored to individuals. This is obviously a very expensive area but will certainly be pursued by those who can afford it.

3) Aging populations overwhelm the system. The baby boomer population bulge is now hitting their golden years. This combined with the medical advances which have lengthened their lives, is causing a significant increase in healthcare cost for the elderly. This wave will be with us for some years to come.

4) Rising costs. Even with all the technological advances we have made, healthcare costs continue to go up alarmingly. There is now a strong push on hospitals to represent high value and cost efficiency. But most of this will be too little, too late.

5) Global pandemics. H1N1 was real and hit some areas of the country hard. It now seems likely that this is just the beginning of other pandemics that will follow. Our globe hopping economy now makes any localized outbreak a world threat.

6) Environmental challenges. For years we have given lip service to the environment while ignoring the impact of our pollution. Now it seems that this approach is finally catching up with us and impacting us in numerous ways. The efforts to reverse this trend will be much more serious going forward.

More on the other 6 megatrends tomorrow.

Mark Brodeur

The Real Reasons We Have A Primary Care Physician Shortage

2010-05-12T11:53:00.003-05:00

To understand the primary care physician shortage we must first recognize that it is not just a matter of recruiting more new physicians into this specialty, but also keeping the ones we have in the field. The American College of Physicians and the American Board of Internal Medicine have found that 9% of all internists certified between 1990 and 1995 are no longer working in that specialty today. Further they found that general internists are 4 times more likely to leave the field than subspecialists. Finally they found that general internists as a group were far less satisfied with their career than subspecialists or those who switched specialties.

Why is this? What has changed for the primary care physician who for years was the backbone of our entire healthcare system? ...A lot has changed.

1) The pay is low compared to specialists. There has always been a gap between the reimbursement for primary care physicians and specialists, but this gap has continued to widen. It has now gotten out of reach. Primary care physicians earn about one half of what subspecialists make.

2) Much of the work is not reimbursed. Family doctors are primarily paid for each visit by a patient to their office. But in a particular study of physicians who see 18 patients a day in their office, they also do the following unreimbursed work: make 24 phone calls to patients and physicians; write 12 drug prescriptions; read 20 lab reports; examine 14 consultation reports from specialists; review 11 medical imaging reports; and write 17 emails to doctors and patients.

3) Increasing demands, expectations and accountability from patients and the outside public. As I have said in a previous post, the relationship between the physician and patient has changed. Patients question their physician much more and expect more from them. Meanwhile under healthcare reform the primary care physician's role is being changed to take on more of what specialists have done and expanding the number of patients they are responsible for. To achieve this they are being required to delegate a lot of the direct patient interaction to physician extenders.

Although the new healthcare legislation includes financial incentives for primary care physicians and payments for preventive health programs, I am afraid that it does not go far enough. We need to ensure that we provide a financially adequate and professionally satisfying career path for tomorrow's (and today's) primary care physicians.

More on this later.

Mark Brodeur

Three Ways To Improve Patient Medication Adherence And Reduce Admissions

2010-05-11T13:10:00.005-05:00

One of the major causes of hospital readmission is the failure of patients to strictly follow the course of medications set out for them upon discharge. This is also a cause for many initial hospital admissions. It isn't because patients are refusing to follow the physician's orders or don't wish to be compliant. But there are other factors involved. A recent study from the New England Journal of Medicine stated that up to half of all patients fail to take their medications faithfully as prescribed thus compromising their health and costing the healthcare system $100 billion per year in preventable hospital stays. There are three steps that can be taken to address this serious issue.

1) Provide more help to patients explaining the various medications. Patients need to know what each medication is for and when it must be taken. Likewise the primary care physician must know the complete set of medications that a patient is on. A patient seeing several specialists may be getting a number of prescriptions with no one coordinating all of these. Some patients could be on as many as ten different medications which is a lot to coordinate without some outside help.

2) Discuss possible side effects of each medication. A patient could be on medications to lower cholesterol and high blood pressure, neither of which give him any symptoms. But the medications when taken correctly make him tired, so he stops taking them figuring he feels better off of the meds. Again, a thorough understand of what each drug is for will help promote compliance. But anticipating the possible side effects will also be very helpful.

3) Consider the patient's financial situation in prescribing medications. Studies have shown that an increase in copayments will reduce the likelihood that prescriptions will be filled. Patients are more likely to be compliant if their out of pocket expenses are minimized. Hopefully some of this will be alleviated on June 15 of this year for Medicare patients when they can receive $250 to help fill the "doughnut hole" in Medicare's prescription benefits.

Some effort in these three areas can not only improve patients' health, but also save some money for our overstretched system.

More on this later.

Mark Brodeur

Conflicting Studies Address Cost Awareness As Part Of Physician Training

2010-05-10T15:16:00.003-05:00

A recent study by the Accreditation Council for Graduate Medical Education concluded that most physicians are no longer being trained just to prescribe the best course of treatment medically. They are now taught to also consider the financial implications. This is a radical change from the past.

This sudden and dramatic shift has occurred since 2007 when physicians were first asked to incorporate considerations of cost awareness and risk-benefit analysis in caring for patients. Two other studies give conflicting data on how widely this new concept has been adopted as part of medical school curriculum. One study says 60% of the schools teach this while another says only 41% do.

Some schools like Mount Sinai School of Medicine take this very seriously by having students volunteer at a student run free clinic for the uninsured. These students must collaborate with social workers to assist patients in paying for medicines. They also are exposed to the cost of drugs and commonly ordered tests. This in my opinion is an important addition to medical curriculum.

Other research suggests that Electronic Medical Records have helped expose physicians to the cost of drugs and tests that they were not exposed to before. This has resulted in a slight but perceptible change in their ordering habits. Even this slight change has resulted in an annual savings of $1.7 million in laboratory charges at Brigham and Women's Hospital.

But one last study highlights an area where there is still need for change; the practice of defensive medicine. A national survey of over 1,400 physicians found that 83% of those between the ages of 25 and 34 said that they were taught to practice defensive medicine. They were taught to protect their livelihood as well as save lives. The US is the only major country where physicians are personally financially liable for their mistakes. Also, medical liability claims make up 10% of all tort cases. Until these facts change, teaching in medical schools on this issue will remain the same, as well they should.

So we are making inroads in teaching our new physicians to practice cost effective medicine. If we could achieve some meaningful tort reform, we could go even further in this direction.

More on this later.

Mark Brodeur

Computerized Physician Order Entry May Lower Mortality

2010-05-07T12:16:00.002-05:00

At last, a study that shows that the millions of dollars we have all been pouring into computerized health records may actually show a real benefit in terms of quality of care delivered. And what more important measure is there than mortality.

A new study at Lucile Packard Children's Hospital at Stanford University in California found that CPOE cut mortality rates by as much as 20%, which translates to 36 fewer deaths at the hospital in 18 months. That is really significant. In fact it is the lowest rate ever observed in a children's hospital according to the author.

It should be kept in mind that this is a small study and was not in a completely controlled environment. It is possible that other factors also had an influence on the dramatic drop in mortality. But even so, the impact of properly implemented CPOE can not be argued. According to the author, it was the well planned implementation that set this project apart from others that failed to show this kind of impact. There was also the investment of $50 million just on CPOE as part of a $600-700 million budget for the entire information system.

So as hospitals continue to make significant capital investments into computerized information systems to stay in compliance with all of the mandates, it is good to know that there may be some real benefits out there from a quality perspective. We all learned years ago that the preliminary promises of computerized systems saving you FTEs were not true. I would be quite satisfied though if I knew I was saving lives.

More on this later.

Mark Brodeur

Readmission Rates Are Higher For Patients Without Timely Postdischarge Followup

2010-05-06T10:17:00.003-05:00

A recent study of heart failure patients published in the Journal of the American Medical Association had several interesting findings regarding followup care after hospital discharge. First, that patients who do not see a provider within seven days following their discharge are 15% more likely to be readmitted within 30 days. Second, that only 40% of the patients studied had this timely followup.

It is the second point that disturbs me. With our current disjointed system of care between physicians and hospitals there is often a break in the continuity of care for a patient following discharge from a hospital. Hospitals actually do better on follow up of Emergency Department patients who are not admitted. The question is "who's responsibility is it to initiate the follow up visit?" Now it seems to rely on the patient. In heart failure patients things are further complicated by the fact that a cardiologist managed the hospital care. So is it the cardiologist or the primary care physician who should follow up?

The current thinking seems to be blame the hospital by penalizing them for excessive readmission rates. This is simply not fair. While there is the possibility of premature discharge that is the cause of readmission, most are the result of poor postdischarge followup. Some readmissions are not preventable no matter what you do.

The current system is flawed and needs better continuity of care for the patient. This will require much stronger communication between all providers. But the solution to this problem is not to simply penalize hospitals thus forcing the responsibility on them. The answer lies in connecting the current patchwork of independent providers together for the sake of the patient.

More on this later.

Mark Brodeur

Pay For Performance: A Good Thing If It Is Done Right

2010-05-05T10:48:00.003-05:00

One of the outcomes of healthcare reform is the promotion of pay for performance (P4P) systems. Essentially these reward hospitals and physicians that provide great value, that is high quality care delivered cost effectively. This is a good thing and something necessary for the future survival of our healthcare delivery system. But we can't allow healthcare providers to be incentivized for gaming the system.

A recent study out of Johns Hopkins found that physicians have more incentive to delay or even pass on treating obese patients in need of gallbladder or appendix surgery because that are statistically more likely to experience complications than their non-obese patients. And the P4P systems do not adequately adjust for case complexity of dealing with these types of patients. The social ramifications of this are that African-American and lower income patients will be disproportionately affected because they have higher rates of obesity.

This study was based on the review of 35,000 insurance claims for gallbladder patients and 6,800 claims for appendectomy patients between 2002 and 2008. Obesity is clearly the most prevalent co-morbidity that skews outcomes.

A RAND Corporation study reached a similar conclusion in a review of primary care physicians in Massachusetts. A typical physician serving the highest proportion of medically vulnerable patients, received about $7,000 less each year under a P4P model.

Any pay for performance system must adequately adjust for the complexity of medically vulnerable patients. Obesity is the most common such factor. That being said, we must also at some point hold patients accountable for life style decisions. A physician or hospital should not be penalized for treating an obese patient over a healthier one. Worse yet they should not be incentivized to pass on providing care to such patients. Any P4P system must recognize and pay additional for legitimate complicating conditions, obesity being the most common one. At the same time there should be incentives set up for patients to start living healthier. These may ultimately have to be replaced by penalties on patients who refuse to comply with basic standards. I am all for access to healthcare for everyone. But along with that comes some level of responsibility for yourself.

More on this later.

Mark Brodeur

One Quick Patient Safety Tip: Interupting Nurses Increases Chances of Medication Errors

2010-05-04T09:24:00.003-05:00

This news should come as no surprise to any one, but perhaps the magnitude of the numbers will. A recent study published in the Archives of Internal Medicine shows a clear association between nurses being interrupted during medication administration and subsequent medication errors. As the number of distractions increase, so do the number of errors.

The study observed 98 hospital nurses during 4,271 medication administrations and found that interruptions occurred in 53% of them. That number seems very high to me particularly when you consider that only 11% of the interruptions were necessary. There are issues like monitor alarms and other critical events that must be dealt with regardless of what the nurse is doing. But the other interruptions just represent a wonderful opportunity for process improvement that will have a direct impact on patient safety.

Let's look at the consequences of these interruptions. Of those nurses who were interrupted, 74% had at least one procedural error and 25% had at least one clinical error. These rates shot up to 85% and 39% respectively when nurses were interrupted at least three times. If a nurse was interrupted four times, the patient was twice as likely to experience a medication error versus and uninterrupted nurse.

When you consider how prevalent medication errors are and the one third of them occur during administration by the nurse, it seems like an obvious area to address. This is the first study I am aware of that links medication errors and nurse interruptions. There are many critical tasks where we make sure the individual involved is not distracted; a pilot during take off or a surgeon in the OR. Let's provide our nurses with a Protected hour for medication administration.

More on this later

Mark Brodeur

Hospital Boards Are Doing Their Job On Quality Oversight

2010-05-03T12:37:00.007-05:00

The 2009 survey by the Governance Institute shows that hospital boards have increased their focus on quality initiatives. This is good news considering some of the recent reports that have suggested that hospitals have not made the progress in quality initiatives that was expected. Chief among those was the recent Leapfrog report.

But the Governance Institute report tells a different story at the board level. The Governance Institute is a not for profit organization dedicated to educating hospital boards and assessing their effectiveness. Their most recent survey included questions related to 13 recommended board practices for quality oversight. Clearly more hospitals are adopting most or all of these practices than was the case two years ago.

Practices that have been adopted by at least 90% of the hospital boards:

1) Review quality performance using dashboards or balanced score cards at least quarterly

2) Review patient satisfaction scores at lest annually

3) Compare current quality performance to historic performance

4) Challenge medical executive committee appointments and reappointments to the medical staff

Practices that have shown significant increase in adoption:

5) Require management to set at least some quality goals on the theoretical ideal

6) Devote significant time at board meetings to quality discussions

7) Ensure that board and medical staff involvement in setting the quality agenda at least equals management input

8) Report quality and safety performance to the general public

9) Have a standing Quality/Safety Committee as one of the top four committees

Increased focus in these nine areas show that most of the hospital boards in this country get the message. With board involvement at this level, we will ultimately get the results that are necessary. My congratulation to you.

More on this later.

Mark Brodeur

Wellpoint Changes Policy on Recission

2010-04-30T10:28:00.003-05:00

I wanted to stay away from this story but as it has evolved, I can't resist it anymore. First there were the very serious charges that Wellpoint specifically targeted women with breast cancer (who were also very costly for them to continue to insure) for thorough audits to look for excuses to cancel their policies. These charges got reinforced by healthcare heavyweights like HHS Secretary Kathleen Sebelius. Then there were the adamant denials by Wellpoint that the charges were completely unfounded. At that point I didn't know who to believe and felt it was best not to comment until more came out.

Now comes the announcement from Wellpoint that even though they did nothing wrong they are changing how they proceed on this going forward. So now I am confused. This sounds a lot like the little boy accused of taking cookies from the cookie jar who says, "No I didn't do it but I won't do it again". At least whatever practices were or weren't happening will now stop.

The practice of rescission by healthcare providers has gone on for years and has been the ugliest form of cost shifting that happens all over the place in the current payment patchwork that we have in place. Thank goodness payment reform is here. It is certainly needed. Addressing issues like rescission and denials for pre-existing conditions is long overdue. I'm not thrilled with all aspects of the new healthcare reform bill but I am certainly happy to see these issues addressed.

More on this later.

Mark Brodeur

More Evidence That Hospitals Must Continue To Focus On Improving Value

2010-04-29T13:52:00.007-05:00

The latest report from the Leapfrog Group which is a nonprofit organization that rates hospitals value and represents major purchasers of healthcare benefits (mostly large businesses), shows good news and bad news. The good news is that overall improvement is shown in many of the categories compared to last year. but we still have a long way to go. More discouraging is the fact that a wide disparity still exists between the high performing and low performing hospitals. Clearly the low performers need to take notice and devote significant time and effort to improve performance now, otherwise they will not be around for long.

Leapfrog has been around for 10 years and admitted in their latest statement that the improvements in hospital performance over this period has been well under what they expected, especially considering that we are the most expensive healthcare system in the world.

Some of the improvements noted are:

1) Pneumonia Treatment- 57% met the standard up from 34% last year

2) Heart Bypass Surgery- 53.5% met the standard up from 43% last year

3) Angioplasty- 44% met the standard up from 35% last year

4) Heart Attack- 33% met the standard up from 26% last year

Overall, even the newest numbers are less than impressive particularly when looking at the low performers. For heart bypass surgery, a 56% difference existed between the best and worst providers. For angioplasty there was a 79% difference. There is clearly a lot of waste in the low performers. One factor is the lack of compliance with nationally endorsed, evidence based guidelines which Leapfrog strongly endorses. Leapfrog asserts that more than 3,000 deaths could be avoided each year if these standards were implemented in all hospitals.

While Leapfrog is still a voluntary survey and only 1,244 hospitals across the country are participating, performance at their standards is a must for all hospitals. If not Leapfrog, then some other survey will be used in the near future to provide the public with performance measures of every hospital.

For those hospitals at the lower end, get busy now cleaning up your act. We at Compirion would be happy to assist you.

More on this later.

Mark Brodeur

Debate Over Benefits of Healthcare Reform Continues At AHA Meeting

2010-04-28T09:25:00.009-05:00

The American Hospital Association's Annual Meeting, which is one of the most prominent gatherings of healthcare leaders in the country, was recently held in Washington, D. C. It was an opportunity for politicians and members of the Obama administration to address healthcare movers and shakers about their take on the new reform bill. It promised to provide strongly differing opinions and did not disappoint.

First up was HHS Secretary Kathleen Sebelius who emphasized that we need to focus on value over volume like we have in the past. To achieve this we need to provide real patient centered care. She stated that a government oversight role is key to getting this done, and compared it to umpiring a baseball game. This is probably a good comparison because most healthcare providers like government oversight about as much as a batter likes being called out on strikes from an outside pitch.

To no one's surprise, House Speaker Nancy Pelosi echoed support for the new legislation. She stated that this is a giant leap forward in access and affordability in healthcare. "People can be more entrepreneurial" she said. "They can take risks. It's about a healthier economy." I'm not sure who's economy she is talking about, but the one in this country is far from healthy, and I'm not sure how this legislation will fix that. As I have stated in previous posts, it looks like the increased access of the new legislation will add more costs than the savings that are projected.

From point to counter-point, Senator John Cornyn, a Republican from Texas, did at least agree that we need to focus on value and not volume. But that is were the agreement with the Obama plan ended. He feels strongly that the new legislation will make our economy worse, do little for accessibility and nothing for tort reform. I certainly agree with him on the last point. I have frequently commented on the cost of defensive medicine that is fueled by the pervasive threat of frivolous lawsuits. This plan does nothing to address these needless costs. This is why a real bipartisan approach to this issue would have been nice.

So the debate continues as we enter this new era of providing healthcare. Certainly change from the previous course was needed. Are we heading back in the right direction or further off course? It all depends on who you ask.

More on this later.

Mark Brodeur

Three Key Factors In The Physician- Patient Relationship

2010-04-27T12:54:00.007-05:00

Perhaps this is better titled "Patient-Physician" relationship. The old days of Marcus Welby as doctor knows best are gone. Today's physicians need to deal with a much more patient centered culture. There are a number of factors that affect this new dynamic but three are emerging as key to the maintaining a strong relationship between physicians and their patients.

1) Knowing your patient and being in sync with them builds more compliance. Generally patients are taking over more control of the relationship they have with their doctor, but not all of them. It is important for the physician to know how active a role the patient wants to play and coordinate his or her communication at that level. A study published in the May issue of the Journal of General Internal Medicine looked at patient prescription refill records. The study found that patients that are of the same mindset as their physician regarding the balance of control were more likely to take their prescribed meds. Patients with high personal control beliefs about their health were 50 percent less likely to adhere to their medicine regimen if their physicians didn't share their belief in patient control.

2) Practicing defensive medicine damages the physician-patient relationship. Physicians often feel compelled to order tests that have a low probability of being helpful simply out of fear of missing something and being sued later. Patients with high personal control beliefs about their health enter into this as well. OBs may do a C-section that is not totally indicated simply because the patient demands it. A survey of physicians by Jackson Healthcare reported that two thirds of them feel this is harming the physician-patient relationship. Seventy-two percent think this negatively affects patient care. And one fourth of Cardiologists admit to ordering unnecessary tests strictly out of fear of being sued. Clearly this environment is destroying the trust that used to exist between physicians and patients.

3) The emergence of the medical home model will totally change physician-patient relationships. This model is being highly touted under healthcare reform as a cost effective way to expand coverage to the many who were previously uninsured. Under this model the role of the primary care physician will be expanded to cover care that was previously done by specialists and much of what was done by the primary care physician will now be done by physician extenders. This will severely restrict the role of specialists unless they sign on to play more of a primary care role in the medical home. The primary care physician will now have more responsibility for more patients while spending less time with them. His role will be supplemented by physician extenders who will form their own relationship with patients.

All of the factors are forever changing the dynamic of that most basic unit of healthcare, the physician-patient relationship. Have we really made progress or were we better off with Marcus Welby making house calls with his little black bag?

More on this later.

Mark Brodeur

Early Reports Indicate No Cost Savings From Healthcare Reform

2010-04-26T14:14:00.003-05:00

The first report from the supposedly neutral experts at the Health and Human Services Department has good news and bad for President Obama's newly enacted healthcare reform bill. The good news is that 34 million uninsured Americans are expected to now have coverage under the new plan. The bad news is that they predict that spending will actually increase between 2010 and 2019 by $311 billion. This is after accounting for the Medicare cuts and new taxes on high cost insurance. Apparently the costs of insurance expansion have been underestimated. Who in the room is surprised at this development?

Republicans are quick to say "I told you so" while Democrats are touting the increased insurance coverage as a major victory. Apparently cost overruns is a glitch that can be fixed as we go. This may be true, but we need to find other ways of efficiency besides just decreasing payments to providers. Remember that the real driver behind healthcare reform is economic not political. The current system can not continue to fund itself without substantial overhaul.

In addition to the HHS report, a new poll by American Medical News which surveyed 172 hospital and medical group executives, found that most of them feel the new bill will have a negative impact on their facilities. Only 22% were pleased with the passing of the bill last month. Any new revenue from the coverage of previously uninsured patients will be more than offset by cuts in reimbursement primarily from Medicare patients. Also the increase in demand caused by the newly insured will further strain physician shortages in many areas, thus driving up the cost to provide these services.

A related concern is that this new climate will spell the demise of the independent physician practice. The economic demands will force all physician providers to be either salaried by the hospitals and health systems or part of a large multispecialty group. This will change the way medicine is practiced and ultimately impact the availability of providers.

These are just the early reports on the impact of healthcare reform. There will certainly be...

more on this later.

Mark Brodeur

Public Ranking Of Healthcare Providers Is Good, As Long As We Get It Right (Part 2)

2010-04-23T11:52:00.005-05:00

Yesterday I discussed a popular hospital public rating list that may or may not be a little misleading. But physician providers are also increasingly subject to this type of rating. Commercial health insurance providers are the main groups putting together these ratings. Some are using this information internally to influence physician behavior or weed out costly providers. Others are going public with the information to help their clients pick the top providers. Again this is helpful as long as the information is truly accurate. In some cases it apparently is not.

A new physician rating group that was co-developed by Blue Shield of California and the Pacific Business Group on Health has come under fire by the California Medical Association even before it releases its first report. The CMA claims the new report has gross inaccuracies and disturbing flaws. Meanwhile the group generating the report, the California Physician Performance Initiative, says that the report is based on data for up to eight quality measures on 13,000 high volume doctors in the state. The CMA charges that much of the data is irrelevant but more importantly, the study does not take into consideration the patient's role for being compliant with the physician's directives. This is another whole dynamic that I will discuss more next week.

This brings me to the last point on this issue. Even the reporting of clearly accurate and objective data can be misleading. Let's consider the reporting of hospital mortality rates. To many this seems like an obvious way to judge a hospital's quality of care. The higher the rate the poorer the hospital. This is great except that it is totally false. Many hospital deaths are expected an unpreventable no matter how stellar the quality of care. In some cases the hospital's role is to provide palliative services and ease any suffering during a patient's final hours. A hospital with a strong reputation that takes care of a high percentage of critically ill patients is naturally going to have a higher mortality rate. What is needed is a list of totally preventable deaths. Wouldn't the plaintiff's attorneys love to get a hold of that list?

The concept of public rating of hospitals and physicians is a good one. It not only helps the public to make informed decisions, but keeps hospitals and physicians on notice of their need to provide high quality but cost effective services. But this only works if the information used for the rating is accurate, relevant and interpreted correctly.

More on this later.

Mark Brodeur

Public Ranking Of Healthcare Providers Is Good, As Long As We Get It Right (Part 1)

2010-04-22T13:41:00.005-05:00

In this era of consumerism I am all for the public having access to quality, safety, satisfaction and cost information about their hospital and physician. But along with that comes an obligation to get the information right. Not just reporting accurate data but also interpreting it correctly. Certain organizations have emerged as experts at rating hospitals and people tend to believe what they say. Is the hospital Joint Commission or HFAP accredited? How many stars does HealthGrades.com give each of its major services? Are they on the Thomson Reuters Top 100 Hospital List? How does it rank under Medicare for its Core Measures of Quality and HCAHPS scores for patient satisfaction? What is it's Press Ganey percentile ranking?

The organizations I have just mentioned use very objective criteria to assess hospital performance. It could be argued that they don't necessarily look at the factors that are the most important, but at least their conclusions are based on data and objectively compare one hospital with another. But these aren't the only measures out there.

Many consumers look with great interest at the highly touted "Best Hospitals" list published every year by U S News & World Reports. A recent study in the Annals of Internal Medicine has found that this list is determined by subjective reputation enjoyed from specialist physicians and not from any objective measures of quality and safety. To generate the list, the magazine asks specialists around the country to list the top five hospitals in their field that they would use for patients with very serious issues. This isn't necessarily a bad indicator, but the follow up study in Annals showed inconsistent correlation between objective measures of quality and the top 50 hospitals listed by U S News. It also doesn't consider that these hospitals may be the best for very serious and complex conditions, but may not provide the best care for far less serious issues that still require hospitalization.

More on this tomorrow.

Mark Brodeur

Three Principles For Improving the Value of Your Hospital

2010-04-21T11:26:00.004-05:00

A recent article in Healthcare Executive discussed how top performing systems are addressing the new "Quality-Cost Imperative". I prefer to call it becoming a high value provider. As I read about what they are doing successfully, three themes stood out to me. These are also the themes that we at Compirion see at client hospitals.

1) Narrow the set of goals you address and stay focused on them. Two mistakes we see hospitals make are; first, trying to fix everything at once and second, shining a spotlight on a problem for a brief period and then forgetting about it. If you try to accomplish too much at once you end up accomplishing nothing. It is important to have a comprehensive list of the issues to address, but rather than deal with all of them, you need to prioritize. Let the staff focus in just a couple of areas. But just as important you need to stay focused for an extended period. Even with our rapid cycle techniques and full time staff involvement, we find it takes at least six months of attention to change culture and achieve sustainable improvement.

2) Link financial health to clinical outcomes. There are two myths in healthcare that need to be eradicated. First is that improving quality always costs money and doesn't save it. Second is that you can run a financially successful hospital without addressing quality. Many quality initiatives can save money in the short run. They all provide financial return in the long run. Look at the list of Top 100 Hospitals and see how many have poor or even mediocre quality measures; none.

3) Focus on best practices rather than worry about the causes of variability. After many hospitals identify areas that are not performing consistently, they get bogged down and frustrated trying to figure out all of the causes of this inconsistency. Take this time and effort and apply it to creating best practices in these areas and don't worry about why the old system didn't work.

To get more specifics on applying these principles at your hospital I invite you attend my free webinar on "Preparing Your Hospital for the Impact of Healthcare Reform". You can find the schedule of presentations and register at our website: compirion.com

More on this later.

Mark Brodeur

Proposed 2011 Medicare Rates For Hospitals Aren't Rosey

2010-04-20T10:37:00.002-05:00

It should come as a surprise to no one that Medicare is reducing its rates for hospital services in 2011 for acute and long-term hospital stays under the Prospective Payment System. This action is independent of and does not include any payment changes as part of the new healthcare reform bill. So there will certainly be more payment reductions ahead.

Actually the new rates proposed for Fiscal Year 2011 (which starts October 1, 2010) are a matter of give and take. For acute care hospitals, a 2.4% inflation increase will be added. But then a -2.9% adjustment will be applied. This negative adjustment was mandated after Medicare experienced unexpected payment increases to hospitals in 2008 from changes in coding practices. Now they are trying to get their money back. It seems that the intensity of services provided Medicare patient in 2008 rose dramatically, at least according to the final diagnoses that were coded. Medicare claims that hospitals were gaming the system. Hospitals claim that they just got smarter to get paid what they deserved. Either way, Medicare is now penalizing hospitals to get back money it did not budget for 2008 and 2009.

Long-term hospitals will also feel a pinch in 2011. They will get the 2.4% inflation increase but then get hit with a -2.5% adjustment for the same coding issue. The proposed rate changes will apply to 3,500 acute hospitals and 420 long-term hospitals. The changes are expected to save $142 million and $41 million respectively.

Hospitals with a high rate of Medicare patients should look at this as just the beginning. As for the rest of your patient mix, other insurers will be following suit. The days of cost shifting to private insurers are over. The only thing left to do is become the most efficient provider on the block.

More on this later.

Mark Brodeur

High Cost Hospitals Being Excluded From Some Insurance Plans

2010-04-19T12:04:00.008-05:00

What once seemed unthinkable is now gaining traction as a way for health insurance plans to deal with rapidly rising healthcare costs. That is, excluding certain high cost hospitals from participating in plans. This is particularly strong in markets where there are competing hospitals providing the same scope of services. And it even extends to hospitals that have garnered an excellent reputation over the years like Massachusetts General and Brigham and Women's hospitals.

According to the Boston Globe, Massachusetts is offering a restricted network plan to its 300,000 state employees promising a 20% discount to them if they give up access to some of Boston's most renowned hospitals. This type of arrangement has not been considered in the past. The prestigious institutions have had the clout to steer patients and opt out as providers to companies that tried to create restricted networks. That clout is now waining in the face of soaring healthcare costs. If these restricted networks are successful, there will soon be cost shifting to the open networks pricing them out of the market.

What does this mean for other hospitals? Clearly the higher cost and lower value providers are in jeopardy going forward even if they enjoy an excellent reputation. Now is the time for all hospitals to ensure their status as a high value provider. This includes maximizing quality and customer service ratings while lowering costs. Even though this recent development is addressing only costs, insurance providers are also closely monitoring quality and service metrics dropping those hospitals that do not measure up.

If you are currently a high value provider, this could be seen as good news for you. Some of your competition may be forced out of new networks being formed in the future. If you are still struggling with quality, service and cost effectiveness issues, now is the time to act. Obviously, we at Compirion Healthcare Solutions would be happy to assist you with this. It is what we do and we have a great track record of success.

It looks like we are back to Darwinism and survival of the fittest.

More on this later.

Mark Brodeur

Another Financial Argument For Patient Safety

2010-04-16T14:10:00.005-05:00

After writing yesterday's blog on Patient Safety, I came across another study, this time from the RAND Corporation, that provides more ammunition to use on those skeptics who are still not convinced that patient safety is a good financial investment. There have been numerous studies showing the direct cost savings of avoiding adverse events thus lowering length of stay and utilizing fewer resources. This is the first study I have seen that directly correlates lowering your number of adverse events with a lower volume of malpractice claims.

The study was conducted across numerous California counties between 2001 and 2005. It looked at both the number of adverse events and the volume of malpractice claims. The study showed a direct correlation of 3.7 fewer malpractice claims for every reduction of 10 adverse events. The good news is that this correlation held up from county to county. The bad news is that there is significant variation by county in the number of malpractice claims filed.

This has been my experience as well. Sometimes the likelihood of being sued is not just tied to how focused you are on patient safety, but also where you are located. Certain counties have national reputations as plaintiff attorney paradise. Even more reason for these hospitals to invest in patient safety. Tort reform in these areas would help also.

Another example of "Qualty first, Finances follow"

More on this later.

Mark Brodeur

New Report Shows Little Progress in Key Areas of Patient Safety

2010-04-15T08:41:00.002-05:00

We all know the eliminating healthcare associated infections (HAI's) not only reduces healthcare costs, but more importantly it provides much better care to our patients. With such a win-win potential why are we not making more progress in this area? But that is the case according to the 2009 National Healthcare Quality Report and National Healthcare Disparities Report issued by the U S Department of Health and Human Service's Agency for Healthcare Research and Quality.

Of the five types of HAI's in adult patients that were tracked, three showed increases, one remained unchanged and only one showed any improvement. Postoperative sepsis increased by 8%; postop catheter associated UTI's increased by 3.6%; infections due to medical care increased by 1.6%; blood stream infections from central lines showed no change; and postop pneumonia improved by 12%.

These rates can certainly be reduced but it will take a focused and sustained effort on the part of each hospital. Some hospitals are already addressing this issue. Over 100 participating intensive care units in Michigan have been able to keep their central line associated blood stream infections at or near zero by strictly adopting standardized procedures. Our experience at Compirion confirms that by putting the proper focus on this issue, which includes full support by the Board and CEO down to every housekeeper, you can make a dramatic and sustained difference.

It is frustrating to see reports like this emerge today, particularly with the overwhelming evidence that we need to stop the out of control spending increases. These HAI's can be prevented. I know, because at Compirion we have helped hospitals vastly improve their performance in this area. Providing the best care for patients should be enough motivation but being the most efficient provider you can be is essential for every hospital's survival in the future.

More on this later.

Mark Brodeur

Three Key Areas That Will Lower Healthcare Costs

2010-04-13T11:01:00.004-05:00

Healthcare reform is here; at least payment reform is here. Only time will tell if we are effectively dealing with the real issues. The new bill played out in a grand theater of politics, but the issue driving it was, and still is, economic. We can't continue to afford the system we have in place. Healthcare costs are growing at too fast a rate to sustain in the future. Our system is totally focused on fixing people who are broken and not effectively dealing with promoting better health in the first place. If we are to succeed in changing our healthcare delivery system and ensuring its economic viability for the future, I see three areas that must be addressed, and soon.

1) Create Value- Lowering costs is only part of the equation. We must provide effective and efficient care. I know I am repeating myself but this is what "quality first and finances follows" means. The best way to create value is to do a better job in the first place. By eliminating medical errors we are improving patient outcomes while we are saving money. We can't make care totally error free but we can make it harm free. We need to focus on any unexplained clinical variation and eliminate it. We need to create a country of all Top 100 hospitals.

2) Coordinate Care- Currently our system is disjointed with various type of care providers really not talking with each other. With Electronic Medical Records becoming more commonplace, this will improve. But currently we have many gaps in our system between healthcare providers that leads to duplicate testing and dropped follow up. Patients with strong primary care providers can do well, but those that rely on hospital EDs or multiple providers for their primary care just go from one medical crisis to another.

3) Promote Prevention and Wellness- We are the number one country in the world for taking care of critically ill patients but we do not fare so well in overall health status of our nation. That is because we focus all of our resources on taking care of the sick and not enough on prevention and wellness. Sure we have flu vaccines and we wiped out polio long ago, but what about healthy lifestyles. Obesity and diabetes are our new epidemics. Money allocated to these areas will certainly not have an immediate return on investment, but the investment is still necessary to turn the current tide and save on future hospitalizations.

Hopefully we are in a new era that will begin with healthcare payment reform and evolve into really addressing the underlying issues that are driving our current system broke.

More on this later.

Mark Brodeur

Eight Characteristics of Today's Successful Leaders

2010-04-12T11:19:00.002-05:00

No one would argue that these are challenging times for healthcare leaders. They were challenging even before the new reform bill was thrust upon us. It takes a special leader to guide an organization through the obstacle course that lies ahead. In a recent article in Frontiers of Health Services Management Debra Sukin lays out eight characteristics that leaders need today. I think she does a great job of hitting all of the key points.

1) Passion- This is something that you can't fake. You either have it or you don't. I have always found it easy to feel the passion for what I do in the healthcare field. Along with the frustrations and battles comes a great sense of accomplishment. We are doing important work. Today's leader needs this as inspiration to sustain him or her through the increasing challenges that lie ahead

2) Vision- While passion gives you the drive to keep going, vision gives you the direction. Obviously both are equally essential. Today more than ever, many constituents of your hospital are looking to the top leadership for a clear game plan. Not only must you show them where the organization is going but also make them a key part of getting there.

3) Quality Outcomes- My tag line is "Quality First and Finances Follow" for good reason. Today's market is putting a priority on best value, not lowest cost. You need to start with great service and then provide it efficiently. These two actually go hand in hand.

4) Industry Knowledge- Every great leader goes through a learning curve on the job and in the trenches. There is no substitute for experience. Leaders may be born with natural ability but they hone their skills through years of using them and learning the industry.

5) Critical Thinking- Today's leaders are bombarded with data, probably too much. The critical thinker knows which data is important and how to use it to make informed but decisive action plans. The proper course of action is not always black and white. Sometimes sound judgement is involved to make the best of competing choices.

6) Perspective- I have seen leaders get caught up in the importance of their position and forget what is really important and who makes the healthcare system work. As key as the leader may be, he or she is only one of the many making it happen.

7) Adaptability- There are no cookie cutter solutions because each organization is unique and the field is changing constantly at a fast pace. We have learned this well at Compirion Helathcare Solutions. We enter each hospital and first learn about its particular issues and frequently modify our plan as we go.

8) Continual Learning- Life is a lesson. If you have gone a day without learning anything new, it is a wasted day. In addition to the on the job learning that occurs, it is just as important to keep up with all the industry trends and developments. Every great leader sets aside time for continuing education.

To all the engaged leaders out there I thank you for what you do and encourage you to press on even harder during these challenging times. Your work has never been more important.

Mark Brodeur

Nine Factors Leading to Dramatically Reduced Mortality Rate

2010-04-09T16:15:00.003-05:00

Bay Medical Center in Panama City, Florida, a client of Compirion Healthcare Solutions, has experienced a drop in their overall mortality rate by over 38% in just over two years. They went from 3.4 to 2.1 simply by focusing on the basics that when combined, can have a major impact on the quality of care. Their mortality rate for heart attack patients went from 15.7% to 15.1%, well below the national average of 16.1%. For heart failure the rate dropped from 9% to 7.4%, also below the national rate of 11.1%. And for pneumonia the rate remained steady at 8.5% which was already below the national rate of 11.4%. The process all started with something as basic as washing your hands. The nine areas of focus include:

1) Handwashing- A study revealed that only 25% of the staff washed their hands regularly between patients. Like most hospitals, the job of monitoring this fell to Infection Control. With Compirion's help this became the responsibility of the new Steering Team. Even the CEO was involved. With this level of scrutiny, compliance increased by 293% and remains at a level of 88-93%.

2) Blood Cultures prior to Antibiotics- Using a similar approach, compliance increased from 83% to 96%.

3) Pneumonia Vaccine- Compliance increased from 84% to 100%, which most hospitals would recognize as an amazing accomplishment.

4) Flu Vaccine- Compliance increased from 58% to 91%.

5) Reduced Throughput for ICU-bound ED Patients- Studies show that the mortality rate for patients waiting in the ED for more than 6 hours increases by 27%, so staying below this became a priority.

6) 24 Hour Chart Checks Missing- They found that 30-50% of the 24 hour chart checks were missed which led to longer length of stay.

7) Transcribed Physician Orders Missing- The numbers here were similar to the chart checks and had the same effect of lengthening stay.

8) Rapid Transport of Chest Pain Patinets To the Cath Lab- The connection here to lower mortality rate is obvious, but simplifying the complicated process that most hospitals have in place for this is an involved process. But through diligence, Bay Medical Center was able to streamline this process and save lives.

9) Rounding By All Levels of Hospital Staff- The last area is as basic as the first. Few people would associate this with an impact on mortality rates, but it works dramatically to change the culture and show real support for the staff who make the difference at your hospital.

Simply by focusing on the basics you can make a significant impact on the quality and safety of your hospital over time.

More on thei later.

Mark Brodeur

Timely CT and MRI Scans Lower Hospital Costs

2010-04-08T16:34:00.003-05:00

An interesting study was just published in the Journal of the American College of Radiology. It shows that CT and MRI scans can shorten a hospital length of stay and decrease overall costs if done early enough. This could be significant since inpatient costs represent 18% of total health care insurance premiums paid, and these costs are increasing by 8% each year.

The study was conducted at Massachusetts General Hospital and included over 10,000 hospital admissions all of which had at least one advanced imaging exam. Results showed that the length of stay was significantly shorter for those patients imaged on the day before or day of admission versus those imaged on day 2 or 3 for admissions of at least 3 days.

For admissions involving abdominal CTs the length of stay was 8.4 vs. 9.7 days. For neurologic MRI exams it was 7.6 vs. 8.7 days. This translates into a savings of $2,129 per admission by reducing hospital costs. This is extremely encouraging but must also be put in the proper context. This assumes that all of the CTs and MRIs are needed in the first place.

Our experience at Compirion has shown us that a number of hospitals have issues with unnecessary testing, particularly MRIs. At one hospital after we helped them redesign how these tests were ordered, they reduced inpatient MRI utilization by 93%. This too represents a significant savings.

So the trick here is to get physicians to only order advanced imaging exams that are necessary for the particular diagnosis causing the hospitalization and to order it on or before admission day. That is asking a lot of them.

More on this later.

Mark Brodeur

High Risk Health Insurance Pools Are Coming

2010-04-07T15:07:00.003-05:00

One of the major objectives of the Obama healthcare plan was providing coverage for the millions of Americans with pre-existing conditions who have been shut out of appropriate healthcare coverage. The bill that was passed will address these issues over time with health insurance reform. But in the meantime insurance pools were to be set up to provide more immediate relief for these people. Well it looks like that relief is actually coming.

Five billion dollars has been allocated in the new plan to insure individuals with pre-existing conditions before the private insurance companies must accept them by 2014. The state governments have the option of running these pools directly or contracting out to a not for profit agency to do it. The new law calls for these pools to be set up within 90 days, so the clock is ticking. HHS Secretary Kathleen Sebelius is asking states to report back by the end of the month how they want to proceed.

Interestingly enough, over 30 states already have similar pools in place that cover over 200,000 individuals. Not surprising though is that every one of these pools operates at a loss. The concern is the size of the loss. In 2008 these pools paid a total of almost $2 billion in claims. The question is how far will our $5 billion go and how will this stay funded until 2014? Also will this cause a shakeout of insurance companies by 2014.? I suppose the administration is just counting on them to donate the huge profits they have been making to this goodwill effort. I'm not holding my breath.

More on this later.

Mark Brodeur

One ED's High Tech Approach to Manage Wait Times

2010-04-06T14:36:00.007-05:00

I read with interest about a hospital (which shall remain nameless) using text messaging technology to keep potential patients abreast of current wait times in their Emergency Department. This is the next step past the many hospitals that already post ED wait times on their website. This strikes me as the wrong use of resources for two reasons.

First, by posting the wait times, aren't you really trying to discourage the people who don't need to be there in the first place from coming when its busy? It is the job of triage to be the gatekeeper for appropriate patients. But on the other hand, by texting that you have no wait, are you inviting inappropriate patients to come just so your staff will have something to do? If you truly need to use an ED, it shouldn't depend on the wait. And if you really only need some primary care, you should see your doctor or an urgent care center whether your local ED is busy or not.

Second, a financial investment in improved throughput for your ED makes more sense than investing in technology to tell everyone how long your waits are. If your waits are short you don't need to warn people. But if they are long do you really want the world to know? Wouldn't it be much better to get a reputation of having consistently short waits?

Coincidentally, Compirion did an ED project at a hospital not far from the one texting wait times. I am sure they are competitors. The hospital we worked at is now boasting about a number of quality improvements from quicker ED throughput to a dramatically low mortality rate. In my mind, knowing the ED wait time is a nice feature but I will take my chances with the hospital that has the high quality and service reputation.

More on this later.

Mark Brodeur

Eight Prevention Initiatives Addressed in the new Healthcare Reform Bill

2010-04-05T14:11:00.008-05:00

Now that the dust is settling on the new healthcare reform bill and the major provisions it contains have had commentary from every side, its time to look a little deeper. One area President Obama talked about early on was prevention. I for one was not holding my breath expecting major dollars to be put into this area. But it appears that under the radar a number of wide ranging public initiatives to prevent disease and encourage healthy behavior have been passed. Efforts to combat our sedentary lifestyle, smoking and love of fatty foods are included:

1) More authority given to the FDA to regulate tobacco products
2) Chain restaurants to list nutritional information on their menus
3) Employers must provide reasonable break time for nursing mothers
4) Health insurance companies will soon have to cover all recommended screenings, preventive care and vaccines, without charging copays and deductibles
5) Medicare beneficiaries will get free annual physicals
6) Medicaid will cover drugs and counseling to help pregnant women stop smoking
7) A Federal fund will pay for more bike paths, playgrounds, sidewalks and and hiking trails
8) Employers can offer higher incentives to encourage healthier lifestyles for employees

These initiatives will not have a big impact on saving healthcare costs, particularly at first. Doing a Return on Investment analysis would be discouraging. But they will start to take us in the direction that we need to go. As Senator Tom Harkin, Chairman of the Senate Health Committee said, "We don't have a health care system in America. We have a sick care system. If you get sick you get care. But precious little is spent to keep people healthy in the first place." I couldn't agree more. It will be expensive to turn this around, but it is one of the major things we must do to reverse the trend of out of control spending increases in our healthcare system.

More on this later.

Mark Brodeur

Six Key Things You Need To Know About Patient Safety

2010-04-02T12:58:00.004-05:00

According to HealthGrades annual study, patient safety is still a serious concern for our nation's hospitals. But clearly some hospitals are making progress and are statistically safer than others. Here are their six key findings:

1) Large safety gaps exist between top and bottom performing hospitals
Patients at top performers were 43% less likely to experience a medical error.

2) Patient safety events are common at US hospitals
Almost 1 million events occurred among Medicare patients in the last 3 years studied representing 2.3% of Medicare admissions.

3) Common patient safety events are very costly
During those 3 years over $8.9 billion was spent on excess costs related to these events.

4) Less improvement seen among the most common events
While some patient safety indicators improved in 2008 compared to 2006, the most common ones and the most serious ones got worse. Those that got worse included bed sores, collapsed lung, post-operative hip fracture, post-operative physiologic and metabolic derangement, post-operative pulmonary embolism or deep vein thrombosis, post-operative sepsis, and transfusion reaction.

5) Approximately one in ten Medicare patients with safety related events died
In the 3 years studied (2006-2008) 99,180 deaths occurred in our hospitals among patients who experienced one or more of the 15 patient safety events.

6) Most common patient safety incidents
The top four and their incidence rate (per 1,000 patients) are: failure to rescue (92.71), decubitus ulcer (36.05), post-operative respiratory failure (17.52) and post-operative sepsis (16.53).

This is one of the most significant areas that hospital leaders deal with. I made this a major focus area as a hospital CEO and we at Compirion Healthcare Solutions also have helped a number of hospitals significantly improve their performance on these metrics. I can tell you having addressed this from both perspectives, that it takes an intense effort to change culture and make patient safety a top priority for every employee. If you have concerns and would like any consultation please feel free to contact us at compirion. com.

More on this later.

Mark Brodeur

A copy of the full report including a list of the 15 indicators studied can be found at www.healthgrades.com

Will Healthcare Reform Help Curb Unnecessary Care?

2010-03-31T10:31:00.005-05:00

The New York Times just published an article stating that many doctors feel the new bill will do little to curb the use of unnecessary testing. Patient demand and fear of litigation will continue to fuel the overuse of tests and treatments unless something happens to counteract this. Doctors make a legitimate point; "If a patient comes in demanding an MRI, there is no incentive for me to say no even if I know it is not needed". To reduce this there will have to be a change in the way patients think about healthcare, how medicine is practiced and how it is paid for.

Setting up guidelines is not the answer. A good example of this failure is CT scans. Clear guidelines for when CT is needed have been in place for years. They say among other things that CT is not indicated after most car accidents. Many patients have no real risk of brain injury after an accident, but try telling that to the injury lawyers. These guidelines have not put a dent in overuse of CTs in these situations. Again there are no incentives in place to withhold the test, only liability.

These doctors feel that there is nothing in the new law that will address this issue head on, but that conclusion may be a little hasty. The law includes pilot programs to pay doctors more for delivering better care at a lower cost. The key here is better care not less care. Eliminating the unnecessary CT is a good thing. Eliminating the necessary CT because of financial incentives to do so is a problem. But any well intentioned efforts to reduce waste will certainly be quickly labeled as rationing care. As Uwe E. Reinhardt, a well known health economist in Princeton, stated,"The minute you attack overutilization you will be called a Nazi before the day is out".

We need to get past this and support efforts to promote efficient care and reduce unnecessary tests. One section of the new bill establishes a private, nonprofit organization called the Patient-Centered Outcomes Research Institute to address this head on. They will have a $10 million budget this year which will grow significantly in coming years. The intent is to ground physician decision making in science and limit the influence of outside factors such as marketing and litigation.

This won't erradicate overutilization, but its a start.

More on this later.

Mark Brodeur

The Two Sides of Saving Under Healthcare Reform

2010-03-30T14:04:00.003-05:00

Two recent articles caught my attention because they both talk about savings under healthcare reform but from totally different points of view. First was a report by the Center on Budget and Policy Priorities (CBPP) that the savings tauted under healthcare reform by the CBO are real. Next was a review in "Healthcare Financial News" on the latest Moody's Report saying that independent not-for-profit hospitals will be at risk under this bill. These two reports show the dichotomy that we live under in healthcare. Yes, we need to cut cost in the system overall, but taking money away from struggling community hospitals and putting them out of business is not the way to get there.

First let's talk about the good news. According to CBPP the projections of savings under healthcare reform touted by the President are indeed achievable and not "pie in the sky" as the Republicans have told us. But keep in mind that CBPP is a liberal leaning fiscal policy research group. Also keep in mind that all parties acknowledge that the new plan will initially increase costs as coverage is expanded. The savings come down the road with more efficient healthcare delivery in place to a greater percentage of the public. So much can happen between now and then to change things. So even if the actuaries got it all absolutely right, outside factors will most certainly change the assumptions used to project savings. So maybe the good news isn't really so good.

Now let's talk about the bad news. Moody's Investor Service projects that most hospitals should be able to operate relatively unscathed over the next three years because many of the key provisions of healthcare reform do not kick in until 2014. But after that all hospitals, particularly stand alone community hospitals will struggle with the reduced payments. Even though there will be some increased reimbursement from the previously uninsured patients and some add ons from Medicaid for hospitals that have hired primary care physicians, in balance hospitals will need to be extremely efficient to survive. Higher cost providers will not make it.

For those that want to know more about how to get ready for this new era of healthcare, I am presenting a free webinar on "Preparing Your Hospital for the Impact of Healthcare Reform" tomorrow, Wednesday March 31, 2010 from 1:15-2PM CDT. I will present it again in two weeks at the same time. To register, simply go to our website at compirion.com and look under Webinars.

More on this later

Mark Brodeur

Will Primary Care Really Be Promoted Under the New Healthcare Reform Bill?

2010-03-29T14:31:00.005-05:00

I knew that the healthcare reform bill contained language to promote better access to primary care and some funding for prevention as well as health education, but I didn't know if these activities would really be significant or just lip service. It appears that as far as primary care access goes, there may be some real improvements funded in the new bill.

I have previously discussed the physician shortage, particularly for primary care. This will clearly get a lot worse with the addition of all the previously uncovered adults accessing the system for the first time. I have also discussed the financial dis-incentives for physicians to choose primary care over highly paid specialties. Massachusetts which has led the country in expanded access to care for its residents reports disturbing numbers. They say that over half of the state's internists and 40% of the family practice physicians have closed their practices to new patients because they are full. Provisions in the new law aim to start turning this around by offering bonus payments to primary care physicians and expanded community health centers.

Only 30% of our physicians practice primary care while 65 million people in this country live in areas that are designated as having a shortage of these physicians. So under the new bill there will be a 10% bonus from Medicare for primary care physicians who practice in these areas. This is a good start.

There will also be promotion of "medical homes" instead of the traditional primary care physicians office. These are designed to help extend the limited number of primary care physicians by making them leaders of a team of primary care health professionals. The team will consist of nurses, nurse practitioners, physician assistants and disease educators. They will work together providing more attention to those who need it most. This innovative approach could have a real impact on taking us from a system that reacts to disease and trauma to a system that truly works to prevent disease and manage it before acute intervention is needed.

Its way too early to say that this new bill is going to be effective, but I am encouraged that it will start moving us in the right direction.

More on this later.

Mark Brodeur

Four Preventable Risk Factors That Reduce Life Expectancy

2010-03-26T15:32:00.003-05:00

I wanted to end the week by talking about something other than healthcare reform. There will be plenty more to talk about next week.

Imagine someone saying they would add five years on to your life if you would simply avoid a few health risks. This would get my attention. Hopefully it will get the interest of others as well. A study published this week in PLoS Medicine found four risk factors that, when combined, have a big impact on life expectancy; 4.9 years in men and 4.1 years in women. These four factors are:
1) Smoking
2) High blood pressure
3) High blood sugar
4) Obesity

No surprises here except for maybe the big impact they have on life expectancy. You don't die directly from these except high blood pressure but they are directly linked to chronic diseases that are fatal such as cardiovascular disease, cancer and diabetes. Knowing I could live in a relatively healthy state for five years longer is enough motivation for me.

Also not surprising is the fact that the study found a person's ethnicity and where they live is a predictor of their health. Asian Americans have the lowest body mass index, smoking rates and blood sugar, while white Americans have the lowest blood pressure. Black Americans have the highest blood pressure, while western Native American men and low income rural black women have the highest body mass index. Smoking rates are highest among western Native Americans.

We all know that the biggest savings in healthcare can be had if more people were healthy and didn't use healthcare services at the rate they do now. Hopefully studies like this one will motivate more of us to start or continue to live healthier lifestyles. I know I enjoy eating decadent foods and I hate working out vigorously, but I sure feel a lot better after months of working out than after a month long eating binge. Do we really need financial incentives to live healthier or is a longer life expectancy enough?

Mark Brodeur