Is there a better way to pay for healthcare than the prevalent “fee-for-service” model?
The answer to this question has been pursued for years. Recently, it has become even more urgent due to the changes in Medicare reimbursements (Hospital Readmission Reduction Act), the Affordable Care Act, and recent targets set by the Obama Administration to increase alternative payment methods in Medicare. The goal of payment reform is to find a better way of paying for healthcare that results in better value (i.e. higher quality, lower cost, resulting in better health). In other words, the right care, at the right time, in the right setting, at the right price. Continue reading →
The current way healthcare services are delivered in this country is, at its core, the opposite of lean. Those of us working in the industry need to do much more to become truly patient-centered, or lean, as stated in so many of our mission statements.
To elaborate this point, I will focus on “flow and pull value,” a fundamental principle of lean. When this principle has been applied to the care process, the patient dictates where, when, and how often a service is provided. In addition, waste has been eliminated, so that service can be provided at the lowest cost possible. Examples of this principle in action may include: Continue reading →
It sounds like a simple idea to change from push to pull.
In the months of December and January, many hospitals are in the middle of putting the finishing touches on their annual budget. Thousands of line items, each requiring thought, planning, and measurement are rolled up into a larger set of numbers. Hospital leaders will use this one document to make future financial decisions basing their assumptions on data from the previous six months when the budget process began. This is known as the push style of budgeting. Conversely, some hospitals are changing their annual budget process from push to pull, and have reduced the time spent on budgets by 60% or more. Continue reading →
In 2008, as the U.S. economy tanked, Congress passed a $700 billion stimulus package to fund ‘shovel ready projects’ to put Americans back to work and America back on its feet. They specifically designated $30 billion to wire the American healthcare system. The Office of the National Coordinator was created to manage the digital transition and Meaningful Use came to life. The idea, of course, was that the investor (the U.S. Government as a proxy for the U.S. Taxpayer) must see a return on investment in the form of demonstrated use of the technology it had just funded, thus ever increasing strings were attached to Meaningful Use incentive payments. The $30 billion fund will be exhausted by year end 2014. The compliance carrot of increased revenue is progressively being replaced by the threat of penalties for noncompliance. Now what? Continue reading →
Today (as I write this) is Veteran’s Day. I’m a veteran. My wife is a veteran. My dad was a veteran. My father-in-law is a veteran. Most of my uncles are, or were, veterans. Some of my best friends are veterans.
There are some (including some in Congress) who feel that changing the bureaucracy is not enough. For instance, Representative Jeff Miller, Florida Republican and Chairman of the House Veterans’ Affairs Committee, said “A bureaucratic reshuffle isn’t a substitute for firing employees who were responsible for the wait lists, ignored whistleblowers, or otherwise put the department’s needs ahead of veterans.” Continue reading →
I just went to the doctor’s office for my annual physical. In my market, I have to schedule this appointment a year in advance, and there are no automatic reminders. So when a year rolls around, there is always some sort of scheduling conflict that makes me have to reschedule. This time, when I called to reschedule, the very polite front desk person said next available was seven months away! Oh boy, I had no choice but WAIT.
When the appointment finally rolled around, I sat in the waiting room for over an hour. I wished someone had let me know ahead of time that Continue reading →
When I mention healthcare payment reform these days, I get one of two, maybe three responses. One is someone’s eyes light up. They’re fired up – this is a passionate topic for some folks. They can’t wait to tell me what’s wrong with our system and what ought to be done. More of the time, however, I either get eyes glazed over, or a deer in the headlights look. Admittedly, this was me until earlier this year, when I took a role at the ThedaCare Center for Healthcare Value, where my main focus would be – and is – payment initiatives. Now I understand the importance, and it’s my mission to do my part to be a change agent. I’m one of those ‘light in the eyes’ people, and I think everyone should have a vested interest in this topic. Our current prevailing approach is wrong, and has serious consequences. If you have a current or future need for healthcare in this country, or have an interest in the US economy, then you ought to as well. Continue reading →
My mother passed away recently. As her children reminisced about her life, we recognized that one of the biggest gifts she had given us was her practical wisdom. This wisdom came in the form of countless proverbs with which she would admonish or help us, some more well-known than others, such as, “don’t saddle the horses before the cart is ready,” “the night is a bad advisor,” “better late than never,” and, “bad news travels fast.” Adding to these was the oft repeated reminder about the wisdom of the story, A Message to Garcia, when explaining why she set high expectations without giving clear instructions.
So it’s not surprising that I often find myself thinking of proverbs I learned from her in my daily life. A proverb that summarizes for me what happens when healthcare leaders don’t spend time in the gemba (Japanese for “at the site”) is, “out of sight, out of mind.” Continue reading →
This year I attended the 5th Annual Lean Healthcare Transformation Summit, and I was excited to hear James Hereford, COO at Stanford University Medical Center give his keynote presentation. He had a lot to share, and I had a lot to learn.
First, Hereford explained that lean is nothing new. Henry Ford was following lean principles when he designed flow into the early assembly lines in Highland Park. But what is new is that lean thinking has the power to fundamentally transform the way healthcare is delivered. He bases this thought on the years of experience he gained while experimenting with lean at Group Health Cooperative, the Palo Alto Medical Foundation, and now in his role at Stanford.
However, unlike applying lean thinking in manufacturing, healthcare has a much more complicated operating environment. No other industry has the amount of specialized buildings, the high priced capital equipment, such a large number of labor intensive specialties, and such a highly engaged customer base as healthcare. Continue reading →
Recently, I was skimming through travel websites in search of the most scenic route to take from my home town in northeast Wisconsin to a location in southern Indiana where our bi-annual family reunion will be held next month. We have made this trip a number of times and are ready to look out the window at something new during the nine-hour trip. As I scanned the pages, reading traveler comments, (‘Beautiful’, ‘Excellent!’, ’Don’t do it – speed-trap!’) I encountered a phase I have never heard before – at least in regard to road-tripping – ‘elephant racing’. Next thing I knew, I was six sites deep into the theory of elephant racing as a significant contributor to traffic congestion and road rage. Certainly, a little deeper than was necessary to plan our trip to the family reunion but, interestingly enough, I found some valuable relevance in the concept of elephant racing that we can use to understand and improve information flows in healthcare. Really? Yes, seriously. Let me share… Continue reading →