Sunday, November 30, 2008
Faced with a well documented financial meltdown, the global consequences and a deep national recession, how can a hospital or system CEO keep the doors open and the lights on?
The answer is simple, yet complex and difficult to carry out. Few try and most of those that do fail.
Think about this for a moment, there is little if any differentiation in the healthcare marketplace. Hospitals on average look the same. They provide the same services, have the same managed contracts contract and even have similar medical staffs. Patient satisfaction runs in the 80th – 90th percentile satisfied. Looks like an industry that is very close to becoming a commodity which will eventually compete on price alone.
The hospital CEO, medical business leader, managing partner, vice president, director or manger needs to be creating customer evangelists to not just survive, but grow and thrive in this and any future environment.
The answer: Customer Evangelists!
A customer evangelist is an individual, who has such an outstanding service experience that they freely become your positive spokesperson in the community. They are not paid. They have no financial sake in your survival, but have come to believe so completely in what you do, they drive business to you. This happens because you have highly satisfied employees that provide exemplary, detailed, person-focused service.
Notice I did not say patient or customer satisfaction. Anyone can have good and even high patient satisfaction scores, and that my friend is the fix you are in- high satisfaction scores do not for one minute translate into customer evangelists. Don’t stop measuring satisfaction; you have to for a variety of reasons. I say focus on creating customer evangelists and the scores will be fine.
The tile of the post says it all Employee Satisfaction + Service Excellence = Customer Evangelists. From now on, my posts are going to focus on this topic. I will be talking about creating an environment that results in highly satisfied employees and putting processes and systems in place to be able to provide outstanding customer service to create customer evangelists. It is an unassailable position in the market. Do you want to be a market leader in healthcare? Do you want to grow and not merely hang on? Do you want the best doctors on your medical staff? Then create customer evangelists.
Some notes and comments:
RSNA starts in Chicago this week. Stop by the Agfa Healthcare booth. They do have the finest PACS I have ever seen and had the privilege to market. Agfa has had a tough couple of years with the never ending restructuring and global leadership changes, but if you are going to RSNA at McCormick Place, take the time to learn about their IMPAX PACS, you won’t be sorry.
I would like to clarify a couple of things about my blog on retail clinics. I do understand them very well. Yes, it is a model that has the potential to lessen some of the waiting and service problems experienced in healthcare delivery, but they are not the answer.
I go to a physician who does not have a NP or PA. My kid’s did see a PA but that was under direct supervision of a physician. The retail clinics popping up are not and let me be very clear about this, not under the direct supervision of a physician. And yes there is a quality of care difference between those PAs and NPs under direct supervision of a doctor and those not. Most of these companies creating these clinics do not even have a medical director, so please, let us not place them on par with physician treatment when they have trouble keeping up with changing standards of care and all that counts is the bottom-line.
As to the accreditation argument, accreditation means that the organization has meet the minimum acceptable standards of the organization that is conferring accreditation. You don’t get points or any other kind of awards for going above and beyond those standards. You paid your fee. Maybe there was an on-site survey. If you passed and few fail, you received a certificate and can say you’re accredited. It is a piece of paper that does not guarantee anything.
Sunday, November 16, 2008
Insuring the 45 million and growing uninsured is not in the cards fore the foreseeable future, not till 2010 at the earliest. President-elect Obama has his hands full. First priority is fixing the financial system, second is the economy, and third is healthcare. Without the first two, the third never happens.
Hospitals are cutting back, but it is in marketing as always. CEOs never did understand the value of marketing and what it can do, but then why do we need to be customer focused? Part of that blame goes to marketers who are unable to prove value; focus on the fluff stuff; and not holding themselves accountable for a bottom-line result. Could be too many newsletters, ads touting services people don’t need or want and not positioning on a quality and service perspective.
Answer this…. if you can’t say in 25 words or less about how you are different from everyone else, then you are adrift in your marketplace and your key customers can’t either. But then your competitors are in the same boat and they just may be as clueless as you are. Define and differentiate before someone else does it for you...
The hospital industry is undifferentiated and it’s becoming a commodity. Focus on satisfaction- employee and patient. You won’t have satisfied patients without satisfied employees. More to follow latter on that one
By the way I am hearing some not so flattering reports about the quality of primary care in those retail clinic settings. Wrong diagnoses, medication errors and faulty in site quick tests make we wonder how soon before the government step in and regulates. More direct physician oversight, certification and training are needed to prevent someone from dying. Hasn’t happened yet but it will. It’s just a matter of time. If you have a good or bad story about the retail clinics post it up.
The company I work for is going through a major reengineering. Look for big and I mean big reductions at the coporate staff level first quarter 09. Lots of uncessary layers and they could really benefit from a dose of lean management. Probably means I will be out of a job. Oh well, here we go again, that will be the seventh time in eight years. I have the nack for finding those companies.
Saturday, August 9, 2008
Now back to the issues....
P4P, Patient Satisfaction and my read on what you need to do Mr. Hospital CEO......
Attempts at payment system reform to stem rising healthcare costs by controlling access and utilization through various insurance programs and market based reforms- PPOs, HMOs, MSAs and HSAs to name a few, have meet with limited success. With projected healthcare spending to potentially exceed $4.1 trillion by 2016, Pay-for-Performance (P4P) represents a potential mechanism to reign in unsustainable healthcare spending growth.
Pay-for-Performance, commonly referred to as P4P, is a concept whereby hospitals, health systems, physicians and other medical providers are incentivized along agreed upon quality standards for specific procedures. In return, they receive increased reimbursement rates based on meeting defined quality standards of which patient satisfaction is one of the critical performance measures.
The short historical background of the P4P movement begins in:
1991, the National Committee for Quality Assurance (NCQA) with the introduction of the Health Plan Employer Data and Information Set (HEDIS)
2001, the Institute of Medicine proposes that quality-based incentive payments to healthcare providers can improve quality
2002, the Center for Medicare and Medicaid Services (CMS) launches its pay-for-performance plan based on 10 quality measures, and in conjunction with the Agency for Healthcare Research and Quality (AHRQ), develops and introduces HCAHPS
2003, Medicare Prescription Drug, Improvement and Modernization Act of 2003, hospitals reporting quality data in 2004 receive enhanced payments in 2005
2003, CMS and Premier launch the Premier Hospital Quality Incentive Demonstration Project (HQID)
2004, employer-based groups entered the P4P debate with the concept of “Care-Focused Purchasing” using quality standards based on medical evidence
2005, the Joint Commission and the American Medical Association begin to more heavily weigh into the debate
Underlying all is the concept that patient satisfaction is a key value-based decision driver patients can use to make reasonable purchasing evaluations when seeking treatment, as well as positively affecting patient compliance and adherence. Organizations demonstrating the ability to consistently deliver high levels of satisfaction will improve their quality outcomes and be rewarded accordingly through higher reimbursements.
The Patient Satisfaction Imperative
Are more compliant with treatment regimens
Even if the medical outcome is not good, believes that he or she had a quality medical experience.
Recommend you to others
Return to you for care
Highly satisfied patients are a source of continued revenue, cost avoidance and positive community image. A culture of satisfaction is one of the major focuses of the institution. Lead by senior executives, satisfaction is measured, evaluated and defined as an organizational imperative. In a P4P environment where a portion of the hospitals reimbursement is at risk by not achieving required quality standards, the institutionalization of patient satisfaction processes, measurements and departmental change capabilities targeting benchmark performance can result in additional revenue. This enhanced revenue possibility could potentially be the difference between growth, expansion and continued mission, or an uncertain future that hospital leadership has little ability to control.
Taking Advantage of Pay-for-Performance
Understand that P4P is a risk-taking proposition requiring dedicated resources, measurement capabilities and access to proven quality improvement techniques and systems. The hospital or health system that applies the following principles established through years of research and market success can take a step forward confidentially thriving in a P4P environment. Some of the key programmatic elements for a successful venture into P4P include:
Rigorous measurement and analysis
Willingness to focus on change
Access to current thought-leaders, case studies and white papers
Peer group comparisons and the ability to network
Gain-sharing with physicians, employees and vendors
Vendor risk sharing and support
Pay-for-Performance represents a significant opportunity in the age of data transparency to improve quality, reduce costs and improve outcomes. Leadership’s action supported by proven expertise can allow for the taking of calculated, defined risks necessary to capitalize on payments for achieving high levels of patient satisfaction. As consumer-directed health becomes more relevant and employers continue to shift the cost of care to employees, high levels of patient satisfaction will be one of the determinants of reimbursement, exclusive agreements, expansion and market share growth.
 John A. Poisal, Christopher Truffer, Shelia Smith, Andrea Sisko, Cathy Cowan, Sean Keehan, Bridget Dickensheets, The National Health Expenditures Account Team, “Health Care Spending Projections Through 2016: Modest Changes Obscure Part D’s Impact”, Health Affairs, March/April 2007, (26) 242-253.
 White Paper, Plexis Health Systems, Inc., “Pay for Performance: Improving Quality and Efficiency of Healthcare Delivery”, 2008, 1-4.
 Ralph Bell, PhD, Michael J, Krivich, CHE, “How to Use Patient Satisfaction Data to Improve Healthcare Quality”, ASQ, January 2000, 6 -7.
 Michael J. Krivich, FACHE, PCM, “Only Sixty-eight Percent Satisfied” Healthcare Matters Blog, April 2008, www.michael-healthcarematters.blogspot.com
© 2008, Michael J. Krivich, FACHE, PCM. All rights reserved.
Wednesday, May 14, 2008
Clearly, as time and time again we are reminded, the healthcare system is in crisis and something must be done. No argument there. The question is fixed by whom and how much is this going to cost? Will the American public be willing to see taxes rise to support a universal health system? Will the insurance companies willingly give up billions of dollars under a one-payer system? Will the healthcare providers see this as a the savior of their way of life?
Who has the ability to bring all of the groups together, consumers, doctors, hospitals, nurses, insurance companies, government, employers, states, etc.? Any meaningful reform will need to be accomplished in year two and three of any new administration. Should anyone consider that reform can be accomplished in year one of a new presidency is frankly, dreaming.
All of that aside, let me pose a series of questions. If one has been reading the reports now circulating, we have several shortages, doctors, nurses and other clinical health professionals. Additionally, over the last decade, treatment patterns have shifted to hospital outpatient and free-standing ambulatory settings. The end result that a significant number of hospital beds nationwide have been permanently removed from the available inventory.
Let's for a moment say that consensus is reached in a remarkably short period of time and we have some form of national health insurance for the 47 million plus who have none. Think the system is in disarray now? What do you think will happen when suddenly 47 million men, women and children have access to the care they need? They have access to the right care, at the right time, in the right setting. And this does not even address the illegal immigration discussion.
Some form of national health insurance will generate great demand on an already taxed and over extended system. Bed shortages, waits for care, queues are what await us as we move forward. Costs will be controlled not by improvements in the quality of care, but by a natural process of access being limited due to excessive demand placed on services that the current healthcare system will be unable to provide.
A burgeoning new sub-segment of the healthcare system will arise. Service will be provided on an immediate basis to those who can pay privately for care outside of the system. A three tier system so to speak, those who can pay, those who have private or employer health insurance and those who have government. The more things change, the more they stay the same.
I am not saying that we should not have national health insurance for 47 million people. Personally, I believe that in one of the wealthiest country's in the world that it is unthinkable that we have such a situation.
This is one very complex issue and until all the issues are out on the table and under discussion instead of the simplistic proposals and idealistic views, change will happen and the unintended consequences of goodwill and policy will make an already bad situation worse.
Monday, April 21, 2008
My very second blog last year was on patient satisfaction. Well, I said it then and I will say it again, its more than the hotel services. Its not entertainment so Disney doesn't work well in serious life and death situations. Its about understanding and creating a culture of satisfaction which most healthcare professionals and organizations are clueless about. Clueless organizationally and clueless from a leadership perspective. So in the interest if time, here is the voice from the wilderness again......
The Patient Satisfaction Imperative
Ever wonder why in the healthcare industry that satisfaction is sometimes so hard to come by? That is not to say that every hospital or health system has a satisfaction or service problem. There are many exemplary examples of service focused healthcare organizations that day-in and day-out deliver high levels of patient and physician satisfaction.
Yet, in an industry where we "serve" individuals, we hear from consumer research that it's the other guy. My doctor and my hospital is fine as consumers report general happiness with their healthcare providers. Hospitals regularly report satisfaction in the 90th percentile. Get people outside of the hospital and you hear some pretty common complaints: the food is cold; I did not know about my test; you woke me up in the middle of the night; it was noisy; the room to cold; the room is hot; and on and on.
As organizations tout the JD Powers Satisfaction Award, show great improvements in Press Ganey or NRC-Picker or other survey instruments, there is still the uneasy feeling that all was not okay. These and other survey tools are all very valid, all worthwhile, show trends and document accomplishments.
With the government HCAPHS Hospital survey in play by reporting provider satisfaction as a common basis for measurement and consumer comparison, all the more imperative the focus on patient satisfaction. Healthcare is not an easy business by any stretch of the imagination. We work with people who are patients and their families that are at various states of emotional distress, caring employees (for the most part), good physicians etc. So satisfaction for so many different groups becomes interrelated. Why is it important? For several valid and researched reasons.
Satisfied patients are more compliant with treatment regimens. A satisfied patient even if the medical outcome is not good, believes that he or she had a quality medical experience. Satisfied patients recommend you to others. Satisfied patients return to you for care. Satisfied patients tend to litigate less.
It's the right thing to do.
Where does satisfaction start?
No surprise here - right in the executive suite. Yep, the CEO and senior leadership sets the tone, tenor and actions by what they do or don't do. How they treat others. How they measure and hold themselves accountable in the performance evaluation process. It's either part of the culture or not. People clearly understand the organizational rationale, polices and procedures for satisfaction and are part of the program, or they see it as the flavor of the day because so and so said so.
Satisfaction is not a program or a slogan, or simply a set of behaviors codified in polices or procedures, a bar chart on the wall. It is not the notice in the hallway or patient room that if you can't rate us as very good or excellent, call this person to immediately address your needs. Satisfaction is all that and more. The defining culture of the organization. A recognition that satisfaction is every ones responsibility. It is anticipating the needs of the person or family. Taking care of the little details day-in and day-out is what creates a satisfied patient. The successful healthcare organization recognizes and understands that patient, employee and physician satisfaction are interrelated, is a process and is controllable!
The Changing Dynamic
Did you know that here appears to be a major shift in how patients and their families judge the quality of medical care? Used to be it was all based on the the hotel services, food service, housekeeping etc. Arrogantly, clinicians and hospital leaders confidently stated that patients did not have the ability to judge the technical quality of what we do.... its magic to them! With the information available from the Internet, health and wellness programs, news stories etc, patients are very well informed and are making technical judgements of the quality of the care that they receive.
Most of the time research is indicating patients technical judgement of care is on par with those of the attending physician. Now that is a dramatic change and one which is little recognized. However, it goes one step further. The dirty floor, the torn wallpaper, the piece of paper on the floor are now adding into the mix. The patient is now judging, "If they can't take care of the little things, then how can I expect them to take care of the big things...... like my treatment......... " OK now what?
With the advent of HCHAPS, pay-for-performance, awards as well as the bragging and marketing rights in the community, patient satisfaction moves to the forefront of operational excellence. Here's the rub.... now comes the program to increase satisfaction and how to show statistically why we are better... Here comes the program, the flavor of the day, the decree from on high.... Lies.... damn lies....and statistics........ Patient Satisfaction is a process.
Satisfaction is a Process
Patient satisfaction is a process that is controllable and understandable. It is the voice of your customer. By listening to that voice, I mean really listening to that voice, you would be surprised at the improvements that you can make in your healthcare setting. Patients, physicians and others view the hospital experience not as a set of unrelated departments where things are done to me, but as a coordinated whole in a continuous process.
Is the process of satisfaction in or out or control? Ask any hospital executive that question and for the most part, I think they would say yes it is. Ask them to show you the data that it is in control, nine times out of ten, the subject gets changed. The simple fact is they don't know. Healthcare leadership needs to know if their process of satisfaction is in or out of control to know if they even have a satisfaction issue. A simple percentage explanation won't do that. A bar chart won't do that. A new program that is the flavor of the day for increasing satisfaction won't do that. It takes a commitment to in-depth analysis, using all the tools of Quality Management. It takes a willingness to change the culture of the organization. That is not easy. Its hard and forces some very difficult personnel decisions.
For example, say hypothetical Hospital A is dismayed about its satisfaction scores and the CEO declares, we need a 10 percent improvement in the scores. Admirable, but misguided. If I am housekeeping and my percentage score of patient satisfaction is 70 percent, a seven point increase over time is probably doable. If I am nursing and my percentage score is 90 percent, a nine point score improvement is impossible. Flat out can't do it, not going to happen, Nada, no way. That is what happens when you only use percentage scores or a bar chart as the basis for action.
A Call to Action
Now, had the organization been analysing the satisfaction data with the tools of Quality Management, this could have been the action on the part of leadership in a conversation in hypothetical Hospital A. " We really need to move the culture of the organization and improve our satisfaction scores. I asked our Quality Department to do an in-depth analysis. When you look at the bar charts we see steady improvement, but regression analysis shows really not much change over time. The telling difference was when we looked at patient satisfaction scores though the use of Statistical Process Control Charts and what a story that told. It looks like our process of satisfaction is out of control, there seems is no rhyme or reason why the scores fluctuate so much. Yes, they are all in a narrow range, but this tells me we really don't understand the process of satisfaction and how to control it. When applying this analysis to individual departments and units, we find some striking differences. Some units and departments are outperforming the organization as a whole, others could really use some improvement. I really think we need to get to those units and departments outperforming the whole and benchmark what they are doing. So instead of everyone trying to improve 10 percent overall lets use the upper control limit of the charts as the incremental target for improvement based on historical performance. That means housekeeping you can improve 10 percent, but nursing, its really only one percent at this time. Lets make this measurement an ongoing process so that we know the point of when we designed an intervention, implemented and see the result."
Mythical CEO continues.." What gets measure gets done, so in your goals and objectives put in place a measurement for patient satisfaction for your departments that the scores will not vary by more than 2 points plus or minus of the top score. This isn't going to be easy. We need to really change the organization. I know we have done this before and seen some improvement. But we always fall back after a couple of months. If we go at this the right way, the employees won't see it as the flavor of the day. And we all know what that means. It may mean over time that we will lose some people. That is never good nor is it easy. But consumers, the government, payers and employers are all demanding higher performance from us. This does have a financial impact to us. As we move forward, we need to set behaviors and hold people accountable, that includes us. We need to become world class in delivering high levels of patient satisfaction."
That unfortunately, is a conversation that does not take place nearly enough.
Where do we go from here?
It starts with learning. It starts with an honest assessment of here is where you are. It starts in the C-suite. Commitment, compassion, understanding, listening, process control and improvement. Every hospital and healthcare provider out in the wider world has the talent, experience and expertise to do this. But what is lacking is the will. What is lacking is the understanding of the importance of patient satisfaction. Its not sexy and really hard work. For those that are willing to start, learn and change - the benefits are enormous!
If we as an industry really understood satisfaction as we claim too, do you really think that year after year dozens of books would still be published on how to improve patient satisfaction in healthcare organizations?
My Book Okay, here is the plug for the book..."How to Use Patient Satisfaction Data to Improve Healthcare Quality", Raph Bell, Ph.D., and Michael J. Krivich, FACHE, Quality Press, January 2000, 156 pages and available on Amazon.com or from Quality Press at the American Society for Quality.
A time for change
Its all detailed in an easy, readable book that will assist you in reaching your satisfaction goals. Patient satisfaction is a process, it is controllable and takes work and at the end of the day, you will be better for it, your patients will be happier for it and you can outperform your competition with it. Unless the hospital industry begins to take a more detailed data analysis and organizational approach to patient satisfaction and make it a part of the culture of the organization, we are left with lies.... damn lies.... and statistics.....
And in the end, we may be very proud of ourselves, but our patients will still have that nagging doubt about what just happened.
Sunday, April 13, 2008
SSM Healthcare in St. Louis, MO, announced that they will be closing St. Francis Hospital and Medical Center in Blue Island, Illinois after years of sustaining losses for that hospital in eight figure range annually. In the press reports SSM could not even give it way.
They have taken some hits in the media, but decision like this are never taken lightly. I know some of the senior leadership at SSM and I can assure you that they took this decision with the greatest of care and deliberation. Mission has always come first. And I do agree that SSM has to consider the viability of the system as a whole to carry out their mission of service and care to all. Sometimes one part must be sacrificed so that the mission can continue on for the greater good.
What is missed in all of this is question: where were the other Catholic systems in the Chicago area, Provena, Resurrection, Loyola, and St. James, Palos Community (yes they are Catholic but keep it a secret), Mercy and St. Joseph? They sure did not step up to the plate. Maybe the press should take some time to ask why and look a bit deeper. The Archdiocese of Chicago and Cardinal George kept painfully silent in this as well.
The timing was not good as SSM announced that it would build a replacement hospital in Janesville, WI. Now that could have been handled better, but that decision was not related to the St. Francis closing. Maybe some day hospitals and health system will finally figure out PR is important and that they generally are clueless about it.
Condell to Advocate Healthcare, Oakbrook, Illinois, Gottlieb to Loyola Medical Center, Maywood, Illinois and Lake Forest in discussions with Evanston Northwestern, Evanston, Illinois. The Chicago market is heating up with the sub prime mess, tighter lending requirements and cheap capital going by the wayside. Poor at best payer contracts , the uninsured and bad debt are forcing these consolidations. This trend is not so different from what is happening around the country. Look for 08 and 09 to be big in the consolidation of hospitals. More to come stay tuned.
A brand new hospital not even opened six months gets approval from the State of Illinois to add a cardiac cath lab. In another one of the Illinois Health Facilities Planning Board huh decisions, with six existing cardiac cath labs within easy distance of the population that is already being served, Adventist Bolingbrook Hospital, Bolingbrook, Illinois adds another cath lab bringing to seven cardiac cath labs to the region. Here we go again with health planning at its best, another unneeded service in the region with all the hospitals competing for a limited patient base and driving up healthcare costs. Quality does not improve and may even be adversely effected by this decision. In the end we all suffer and pay higher prices.
Then the Planning Board denies Edwards Hospital, Naperville, Illinois third CON application for a new hospital in Plainfield, Illinois when additional beds are needed. Go figure.
Up next Silver Cross Hospital, Joliet, Illinois wanting to build a replacement hospital. The only small issue is that they want to build the hospital three miles east in a very affluent and growing south suburb of Chicago with a major expressway newly opened. The current hospital is located in section of Joliet with a high Medicaid, self- pay and indigent population. But the officials say that they are not abandoning those patients. Yea right, with a virtually non-existent public transportation system, how are those people going to get there?
Coming soon, as an author and established expert on patient satisfaction soon to come will be a some comments on the whole patient satisfaction information just released and where we need to go from here.
Thanks for reading!
Saturday, March 29, 2008
Let me set the stage. A new hospital opens in Bolingbrook, Illinois. It has been under construction for two years and is the first new greenfield hospital in 25 years. Looks like a major PR opportunity but no. The marketing consisted of some billboards without any mention of location, one full page advertisement, and one direct mail piece. Most of which happened during that two years before the hospital opens. Now that's useful.
So what do they do, open the hospital, a couple of newspaper stories and a billboard way off the expressway and a radio commercial. Build it and they will come mentality. Guess what? People are not coming. So for the last couple of weeks high on top of the hospital, the Adventist's and yes its Adventist Bolingbrook Hospital puts a giant black sign with white letters saying "NOW OPEN". Oh, I bet that will draw the patients. What were they thinking? Hey it works in retail, it will work for us? What is next a grand re-opening? Me thinks they are having trouble attracting docs to admit patients.
There I go again thinking that docs hold the patient admittance keys.
Thankfully, the sign finally came down.
Just another great example of what people in the hospital industry don't know about brand, marketing or even common sense.
A word of advice to the Adventist Health System in Winter Park, FL. You all have $2 billion in cash in the bank, the Midwest region pulls down nearly $500 million annually after expenses, spend some of that cash and do it right. But its going to cost you a whole lot more now because you have already lost the market opportunity.
I should have taken a picture and posted it. On second thought, I am sure they finally became embarrassed enough.
Sunday, March 23, 2008
An under-current of thought at the Congress was the sense that healthcare is undergoing some fundamental restructuring. No, not the kind that really addresses the underlying systemic process and care issues, not the "medicalized" social issues like the estimated 47 million men, women and children without health insurance, nor the crisis in Medicare solvency. The kind of change that over a generation will have a basic and fundamental shift based on the transparency of quality and data reporting.
Where we were
Healthcare in general for far too long, has been mired in secrecy and arrogance. No data releases, no voluntary reporting of adverse events, little effort to report how well a hospital does what it does. It is what is is, but that is really beginning to change. And I call the change the Age of Quality Transparency. An evolution of sorts.
Real Change is Generational in Nature
Looking at the past, it appears that healthcare in every generation has gone through a fundamental change. In the sixties, it was the age of insurance - employer and based private, the introduction of Medicare and Medicaid which had profound effects little understood or anticipated. Hill-Burton grants for construction and modern healthcare as we know it was born. Explosive growth little control and we will do things to you and take care of you. You take this pill, have this surgery, do this rehab.
Like parents talking to children, the industry took care of us.
In the 80s and 90s, the introduction of DRGs, managed competition, managed care, HMOs, PPOs, POS and the list goes on. Control of rising costs by attempts to limit utilization and place more burden of cost on the patient. A big change was the introduction of the concept of personal responsibility for your health. Wellness programs became an effort to change lifestyle. A change that is generational in nature for which we are all finally starting to see it pay-off.
Most cost control efforts are still in place today, but have done little in restricting choice and limiting payment having no effect on the continued unabated rise in the cost of healthcare. A failed attempt at meaningful reform and a single government payer system as proposed by the Clinton's in the 90s only added to the dilemma.
Today, HSAs, MSA, higher co-pays, employers dropping coverage and reports that healthcare will top the $4 trillion mark in a few short years. A new call for national health insurance. What we never had until the past few years is the spoken realization that quality pays, individuals have the right to know and that informed decision making based on measured performance against a peer group or nationally recognized care standards is fundamental to controlling utilization and cost.
Medicare will no longer pay for what they consider to be never events. Amazing when you think about it that we as an industry were paid for preventable errors.
Where are we headed?
To the brave new world of price and quality performance data reporting. Informed decision making based on information that is available, free and transparent. Dashboards, report cards, comparisons, call them what you will but it is data reporting none-the-less. This is not a fad, only the beginning of change. Consumers, government and employers being able to make informed choices. Asking a hospital or other provider what there prices are and getting a clean and understandable answer.
Will there be excesses, yes. Its happening already with healthcare organizations using Thompson, Healthgrades, Press Ganey, PRC reports and other reporting companies as evidence that they are better than the competition. Run an advertisement! Yep, that will sure do it. Unfortunately, the use of that medium to report data is not creative in the least and does a disservice to consumers and others, leaving it to the hyperbole of advertising claims.
I do think a clearing house is needed for all of us to sort through the claims, unless of course hospitals and other providers can shift to a more meaningful approach to transparency and quality data reporting than what we are now seeing. It's not about the ad. It's not about the newsletters. It's about doing the right thing this time before other tell the industry how to do it.
Sunday, March 2, 2008
A couple of weeks ago, Health Affairs reported that healthcare spending increased by $750 billion to $1.5 trillion. It was also predicted that by 2017 healthcare spending would increase to $4 trillion. Okay, can anybody without giggling too hard really admit that they can comprehend and understand exactly what $4 trillion means? Monopoly money... it has no meaning except for those that can figure out how to be part of that spending. Hospitals, health systems, medical device manufacturers, pharma, physicians, associations etc., all looking at what piece of the pie is theirs. The economist's know what that means. So what else are we to spend our money on?
Well, that kind of spending is unsustainable and will force concrete action to fix a broken healthcare system. Just what that will look like is any ones guess at this time. Don't fix it and we will have rationing, long waits and a national healthcare system where no one is cared for. And a dollar that so far south of the Euro that it will never come back. Government has enough trouble running Medicare and Medicaid now, what in good gosh almighty makes anyone think they can run a national healthcare system.
A bet and forecast for my money..... Like Chicago politics, once everyone figures out how they get theirs, healthcare reform will happen. Everybody wins except for the consumer......
Medicare Rates Are Cut!
Scream the headlines and the hospital administrators, national leaders decry the action. OK, what does it really mean. First, Medicare is not being cut. Second, it is still growing. Third,what was cut was the rate at which Medicare is growing. And fourth, it is just not the rate healthcare people want. How about instead of crying for what we don't have find ways to be more efficient and productive, reduce medical errors, promote standards of care and become more self sufficient and less whinny.
Having been outside of the hospital part of the healthcare industry now for a couple of years and reading and watching, I never realized how whinny hospital execs are. We are expecting someone else to fix our problems. Maybe its time as healthcare executives we stepped up to plate, reached consensus on a strategy and drove some real national policy agenda and change. Instead we are reactive and acting surprised when someone steps with a solution on issues that we should be leading and then we react with the why it will not work, not the why it will. Oh wait, if we did that we couldn't complain much anymore. No wonder no one takes the healthcare industry seriously. I am sure this really endures me to the industry.
Expensive... needed.... and the right thing to do. EMR, e-prescribng, RHOIs (which may be dead anyway) and a whole host of issues besides the technical ones. Seems to me to be the cost of doing business. We all agree that government wants IT, doctors and hospitals want IT, employers want IT from providers and national healthcare leadership want IT and the AHA wants government to pay for IT. Sorry, there I go again not being part of the solution but adding to the let someone else pay for what I need to do for my organization from a cost of doing business perspective.
My simple question is, so why is the government expected to provide the cash to hospitals, health systems and others to move to computerization? Money for IT might just be available if every hospital in the US didn't have to provide every service, piece of new technology, improved efficiency and productivity, reduced medical errors and improved customer satisfaction.
In the end....
These are not simple problems and do not have simple answers. I have made light and poked fun, and I am sure irritated a bunch of people along the way. But at the end of the day, unless we can come together, use a little common sense and ask what is right for all instead of what's in it for me, we could solve these problems. Maybe that's what Senator Obama has figured out, the American people have figured out and we are just waiting for everybody else to catch up.
Sunday, February 10, 2008
No, this is not a joke. It has been most interesting reading sports columnists and broadcasters lament to a great common chorus that no one knows about the extent of Urlacher’s injury and his neck surgery. The Bears aren’t talking, the doctors aren’t talking and nobody else is talking. It is as if some serious plot has developed to keep the real story from the media. Hogwash…..
As a 20 year healthcare executive life changed a few years ago when HIPAA became the law of the land. Simply put, if an individual does not want anything released about their medical condition, treatment, so forth and so on, that was that. No press leaks, no briefings from the Bears, no info from the hospital, doctor’s or anybody else. The federal government has clamped down really hard on the privacy issue and this falls into that. Urlacher is the only person, who can make the decision on who does or does not receive any information about his medical condition or treatments. Who he designates as being able to receive information is prohibited from releasing any content. If you want to know you have to speak to Urlacher.
What you simply have here is that he decided not to allow for the release of medical information. The Bears won’t say anything, the hospital won’t say anything, and the doctors won’t say anything. Why, simply put they are prohibited by Federal law. Big fines, imprisonment, law-suits, malpractice judgments and loss of professional license will result if found violating HIPPA. That’s all it is, nothing more than that.
Gone are the days when tips would be called in. Staff will get fired for that. As a healthcare marketing executive, HIPAA makes life a lot easier for me and not having to deal with the press. Privacy is privacy and the law make no distinction whether you are Joe average or a superstar. Everybody is this same. It does make the media job harder.
So everyone please stop with the grand conspiracy theories and keeping things quite because the Bears don’t want others to know. It’s all about privacy and his wanting some. Everybody is pulling the media chain, you guys give free press and the Bears and NFL are laughing all the way to the bank.
Frankly, as a Bears PSL and season ticket holder, at this point could care less. They will be bad next year and the year after that. I have no confidence in an arrogant coaching and administrative staff, that can’t change and adapt to different situations. They are self delusional in thinking that and believing that they are better than they are. Their window slammed shut and is closed tight for at least another three years.
Tuesday, January 29, 2008
But and this is a big but, the premise of empowering consumers is that competition in the marketplace will fix the healthcare ills of the US faces some serious questions. On the face of it potentially true. In most markets competition drives down cost, improves quality and diversity of choice.
Healthcare does not operate as a true free-market competitive environment. It is more complex than the private health insurance, workplace, choice debate. The fundamental problem with the healthcare landscape is that until the very basics of regulatory reform are made to impact and make it a true competitive environment, all the tax reforms, HSAs, etc., will not alter the current crisis.
Right now, tax exempt healthcare organizations through Federal and State regulation and Certificate of Need laws, are able to charge higher prices, form cartels to legally block competitors from expanding services or even entering the marketplace and collude. That does not describe a competitive environment. That sounds like a Justice Department probe for anti-competitive behavior, collusion in the marketplace to fix prices etc. We don't accept that behavior in other industries why do we accept that in healthcare?
I am sure that when the explosive growth of healthcare started motives where high, community good meant something and community leaders were trying to do the right thing at the right time. Today's world is fundamentally different that the 60s, 70s, 80s, or even the 90s. Strong bold regulatory action is needed first.
Unless fundamental restructuring of the tenets of the competitive healthcare market takes place, reform under the various proposals are not possible, unless it is universal and single payer. And heaven help us if we go there.
Healthcare market regulatory reform is something that neither party nor the candidates are addressing, except in some of the best political speak that I have seen in years.
Sunday, January 20, 2008
With the economy nearing recession it is a safe bet all the talk about healthcare reform and national health insurance will slow down. People want jobs and economic security. That debate is beginning to overshadow everything. Politicians are like a 3 year old child's short attention span and they focus on the flavor of the day. Until someone comes up with that private government combo plan for reform, its dead in the water. Look for incremental change that tinkers around the edges but fails to address underlying systemic issue. If real change is going to come it will have to come from employers large and small. As the old saying goes....Money talks and ........, well you know the rest.
We all know that hospital margins for the most part have been showing signs of improvement the last couple of years. With the growth in spending in Medicare and Medicaid, and CMS realizing its out of control faster than they even thought, reductions are in the works. That will pace more pressure on margins. Also, hospitals have done very well thank you very much, in the past few years with their investment strategies which has supported margin growth. With the current state of the financial markets, some will take a financial bath. Look for losses especially with the stand-alones going forward. Higher interest rates for bond issues as well because of the sub-prime market meltdown, lower margins etc. As layoffs become more prevalent in the general job market more uninsured will be seeking care further increasing bad debt and adding to margin compression. Oh wait, my bad, bad debt is really community benefit as they like to say.
Mergers and Acquisitions
One would predict that merger activity will increase this year and for the foreseeable future with the economy the way it is becoming. The Justice Department will be looking very closely at these transactions. I have yet to see one where healthcare costs were reduced, duplicate services eliminated and big time leverage was gained for increased reimbursement from payers. Doesn't mean that it doesn't happen, I just haven't seen it.
Nearly 100,000 people die every year from preventable medical errors. That's like crashing a fully loaded 747-400 every 1.5 days. Now we all know its unacceptable so why do we continue to allow that that in healthcare? Some payers and the government are going to stop paying for never events. A good start in the right direction. The jury is still out on whether or not P4P programs work. Mess with the medical communities money and you will see how fast the error rate and deaths associated with it goes down. Cynical yes, but true never-the-less.
Have a good week everyone and thanks for reading. Have some news or ideas just send them to email@example.com All will be treated confidently and anonymity assured.
Tuesday, January 1, 2008
Jan, 1, 2008 and another year starts anew.
Check out the poll on Certificate of Need.
Been seeing a lot of hospital quality ads lately. HealthGrade ratings are out touting we are the best. How many people out there really understand that hospitals and health systems have to pay a lot of money to use the HealthGrade logo and rankings? Not many I expect. Five stars, four stars etc, kind of like choosing from a menu at a restaurant. Wish my doctor had admitting privileges at all those hospitals, then we could pick and choose where to go. Like that is going to happen. I'd rather have info about medication and surgical error rate and malpractice suit results, physician qualifications and satisfaction rates.
Hospital Ad Wars
Always fun to watch hospital dueling in the marketplace with ads. Especially in a two hospital town. Lots of ad dollars and the only ones that profit are the local papers and radio stations. The ads are silly, cover nothing, have no call to action and look the same. My doctor and I make the decision of where to go based on my insurance, what's needed and the hospital she prefers to practice at. Humm..... there I go again thinking that doctors and managed care plans are the ones driving where to go, not hospital advertising. Gee, think they might want to work on customer service and improve how they treat people?
New Hospital Opening
Illinois newest greenfield hospital was to open December, 2007. Rumor now has it that it will open on January 14, 2007, over 5 weeks late. Last one was built and opened over 25 years ago.
How are they marketing leading up to the opening? Poorly at best. It is typical of the old build it mentality and they shall come. What an opportunity passed by. I live in the community and little marketing is taking place. Arrogant and Imperial. Each time I go to work and drive past the place its as dark and quite as could be.
I know lets do a some silly billboards with no call to action or even showing where the hospital is, no radio, one direct mail piece and one newspaper ad. Yep, that will sure draw attention. Think that maybe after spending $160 million plus to build it that it would take a little more than that to raise awareness. A couple of weeks to go and a big thud in the market.
That's it for today. Happy New Year everyone