The Medicare payment system is fundamentally flawed. It penalizes efficient providers delivering better quality. It incents over utilization and the building of over capacity. In this paper we begin to document the immediate things that must change if we are going to incent high quality, low cost care with appropriate utilization. See attached document for further details.MedPac_whitepaper_1209
We have been working with Senator Kohl to introduce this amendment for some weeks now. It is great to be able to announce that he has done so. It is imperative for us to gather data on methods of improvement that are working in U.S. healthcare and we know applying lean to healthcare is one of them. The network will be able to act as a model to show that reducing cost and improving quality is possible by using a well defined system transformation methodology.
Read the amendment below. It is midway down the second column.
I participated in a roundtable of distinguished health care experts convened by The Institute of Medicine to discuss cutting the health care bill in America by 10% or over 400 billion dollars by 2018. Read on to see what we discussed and concluded.
Harvard researchers, employee benefits administrators, physicians, health plan executives, and improvement experts gathered at the National Academy of Sciences in Washington on Dec. 15 and 16th to discuss the nation’s health care cost crisis. We reviewed reams of data that had been presented over three workshops the IOM hosted in 2009. At the September workshop I presented data from the work of the Healthcare Value Leaders Network.
The purpose of the meeting was to obtain expert opinion in addition to literature review to better understand how likely it is the nation could actually reduce health care expenses by 400 billion dollars over 10 years. I believe we can do better than this and have said as much on this blog and in peer reviewed journal articles we have published. At the end of the day most of us felt 10 % was quite possible and we were able to categorize where we thought we could obtain it. The IOM will be posting comments on this work in the next few days www.iom.edu but the following is a compendium of what we were working off of and what we felt was possible. I should make it clear to the readers this does not represent any official opinion of the IOM or even a consensus of the roundtable members. It really is just the beginning of the very tough discussions we are going to need to have in this country if we are are really going to bend the cost curve.
The first document lists the members of the roundtable.The second document describes three scenarios written by the IOM’s Pierre Yong M.D. based on 2009 workshop presentations with dollar figures attached to each strategy for cost improvement based on the presenters data or experience. Each strategy is described in more detail under the scenario. Finally, at the end of the document is the preliminary conclusion of the roundtable which is summarized by me on what the priorities should be to reduce cost and estimates of what cost improvement could be obtained.
Tell me what you think.
This is a terrific presentation by front line nurse Jamie Guth who works on the Collaborative Care Unit at ThedaCare.
ThedaCare and Collaborative Care was one of three organizations chosen by the Commonwealth Fund as best practice in North America for innovation related to multidisciplinary team development. Thirty-one organizations were initially screened with three chosen. One of ThedaCare’s front line nurses was chosen to represent the team. The following is Jamie Guth’s presentation at the 21st IHI National Forum on December 9, 2009. The presentation slides are attached below as well.IHI Dec presentation
In his plenary speech yesterday in Orlando, Don Berwick the CEO of the Institute for Healthcare Improvement recognized eight organizations as delivering remarkably better performance. Four of them are members of the Healthcare Value Leaders Network.
Cedar Rapids was identified as major example of a community where low cost high quality care was being delivered. Both Mercy Hospital and St. Luke’s( Iowa Health System) are part of the Health care Value Leaders Network.
In addition, Gundersen Lutheran in LaCrosse and ThedaCare in Appleton were highlighted in terms of efficiency of care. Also mentioned were Denver Health and Virginia Mason both of which have been on the lean journey as well.
Go to Paul Levy’s blog and get a summary of the speech. (See link below.)
http://runningahospital.blogspot.com/2009/12/berwick-at-national-forum.html
This article points out the seven issues to watch in the ensuing health debate.The issues are: public option,abortion,health insurance excise tax,prescription drugs,affordability,insurance exchanges,and Medicare cuts.
Isn’t it interesting that removing waste from the care delivery system isn’t mentioned any where. I assume that by cutting Medicare spending by several hundred billion dollars that legislators are saying to the delivery industry “get more efficient or perish”. Problem is most hospitals and doctors don’t have a clue how to become more efficient.
Please visit the Health Care Value Leaders Network and join the few that are anticipating these cuts and see what they are doing to get ready.
The following article clearly expresses what we have been espousing for months: without focus on care delivery reform costs will go up,regulation will increase, and innovation at the level of care provision will be stymied.
Dr. Flier explains what is really happening in Massachusetts which is that costs are rapidly rising to the point that the state’s payment commission has decreed a new payment model must be implemented now and that it most likely will be some form of capitation. This in itself is not necessarily bad or wrong but the speed at which it must be implemented due to the cost crisis does not allow for thoughtful and careful pilots to understand what would work best.
These new payment models cannot be implemented at a federal level.Massachusetts will have a hard enough time achieving consensus but getting the whole nation to consensus is impossible? It’s time for our legislators to step back and take a hard look at what they are about to do. A new insurance mandate for all without the necessary reform of the payment process or the care delivery system will only add a trillion dollars of cost over the next 10 years.
http://online.wsj.com/article/SB20001424052748704431804574539581994054014.html
Group Health has made terrific strides in their quest to build a culture of continuous improvement using lean.
The HCVLN met in Seattle on Nov. 5th and 6th and visited Group Health of Puget Sound. What a great experience seeing the progress Group Health has made in their Lean implementation. We visited sites where executives and managers had standard work for leading improvement. We observed visual control boards focused on quality, staffing, and service.At Group Health there is a palpable difference in the way staff and physicians think and act about delivering care to patients. We observed a humility and respect for patients and each other which is at the root of the new culture.
So what? Group Health has recently published the answer to this question in the American Journal of Managed Care September issue.Their redesign of primary care using lean has achieved a 30% reduction in E.R. visits as well as an 11% reduction in ambulatory sensitive admissions .(These are admissions from an outpatient clinic that could have been avoided if appropriate resources were available to care for the patient in an ambulatory setting.) The 2 year follow-up data will be released shortly but promise to show even more remarkable improvement.
These results as well as ThedaCare’s results reported in Health Affairs in September and other published results are making it clear that the methodology to radically change health care is finally upon us. It’s not easy and it’s not just a project. It involves changing each and every person from the CEO to the administrative assistant but those organizations that change can produce improvements in cost and quality never before dreamed of.
Congratulations Group Health, keep it up, the world is watching! .
The op-ed describes another hospital’s journey in using The Toyota Production System to radically redesign and improve care.
Just think what we could accomplish if we could get the entire industry to change in this way.
http://www.washingtonpost.com/wp-dyn/content/article/2009/10/08/AR2009100802594.html
It’s been a while since I have written on this blog because we have been waiting for the democrats to sort out their differences. The passage of the Senate finance health bill is the first step in convergence on what we can expect to see from health legislation.
What do we need to prepare for?
1. Lower reimbursement. The way the CBO plans to pay for broader insurance coverage is to pay providers less over the next ten years. If a public plan is enacted that payment will be either negotiated by government entities or the payment will be tied to a percentage of Medicare reimbursement, which is proposed at Medicare plus 5%. This is the way the insurance plan will be funded in addition to higher taxes for those individuals making 250,000 dollars per year or more. Therefore, organizations that are not focused on radically redesigning the way they deliver care to become more efficient will face an uncertain future. I would estimate that a 2-5% productivity improvement (depending on inflation) per year is the minimum to survive financially moving forward. This improvement will be required because of a flat or declining revenue stream for providers. The productivity improvement required may be much higher if a public plan is enacted and many employer sponsored plans are transitioned to a public option. With no commercial rates to rely on organizations are going to have to survive on what are considered inadequate government payments today. It appears meaningful payment reform won’t happen for years as the only provisions in the bills for reimbursement reform are for pilots with no action recommended and no date established by which change must occur. With so many variables it really is difficult to predict the future but with any of the present scenarios plans should be put in place to begin to manage to significantly lower reimbursement. Of course this is exactly what we have been working on with the Health Care Value Leaders Network.Those interested should go to this website and sign up. We will contact you and help you get to work by learning form others who are achieving remarkable productivity improvements.
2. More federal government bureaucracy. There are many new federal agencies created in all 5 of the bills on the floor (http://www.createhealthcarevalue.com/blog/post/?bid=104). Quality, performance reporting, innovation centers, comparative effectiveness centers, and more will be centralized and run from HHS. This probably means more regulation and federal control but we don’t know for sure. We will need to prepare for more compliance programs related to federal oversight. If we aren’t freeing up staff by improving productivity from operations we won’t be in compliance and reimbursement will decline further.
3. Specialists and primary care doctors are going to have to work closer together. In the legislation there is money for a number of pilots related to medical home and accountable care organizations. There are many flaws in these concepts as presently articulated but all the bills have the concepts clearly articulated as being important to pilot in forthcoming reimbursement efforts. I am in complete agreement that primary doctors and specialists need to work more closely together. I am not in agreement that these theoretical models aggressively promoted by academicians are the appropriate solution. In fact, I am fairly certain these models will fail miserably because they are not focused on the right problem. I outlined in the September-October of Health Affairs (http://www.createhealthcarevalue.com/blog/post/?bid=102) the concept of designing a system around value to the patient vs. value to the doctors and hospitals. Accountable care organizations and medical homes create value to providers not patients.
4. Universal Insurance with significant federal involvement. Whether it’s a public plan, a co-op or a different model there will be a universal insurance system. It isn’t designed to do anything differently than our existing government insurance systems including Medicare and Medicaid. This means that costs will continue to escalate and as noted above reimbursement will continue to decrease and eventually more draconian controls will need to be added to control costs. What we have proposed at this site has been a system based on provider competition, which rewards better quality and cost of care delivery. In proposed insurance options there are no specific provisions for that to happen.
5. Many years of piloting all kinds of initiatives through HHS grants. Most providers will be involved in some government pilots. Whether it’s medical home demos, insurance demos, reporting demos there will be a lot of money spent trying to gather data on what works and what doesn’t for a myriad of questions. This also means that one common system administered by HHS is years away. It may mean that we opportunity here in Wisconsin to prove that many of our ideas regarding quality and efficiency can work to improve health. We will need to get in line quickly for the federal dollars available to test our approaches.
To summarize, change is going to happen. We need to prepare for lower reimbursements, greater federal oversight of care delivery, and a new insurance program administered if not by the government then with a lot of government involvement.
