Value-based health care, Part 2. The physician imperative: define, measure, and improve health care quality

Health care is the only major industry that lacks agreed-upon metrics to objectively define the quality of its products and services. The fundamental deficiency has led to the use of price as the de facto metric for patient contracting. Provider selection defaults to price because quality is assumed to be equal across all physicians and hospitals. This assumption is erroneous and now obsolete. Health care quality can be accurately measured using sophisticated illness modeling techniques that objectively risk-adjust patients level data. Providers' clinical data can be correlated with patient self-assessed outcomes for all episodes of inpatient and outpatient care. Physicians and their hospitals currently managing financial risks and those positioning themselves for these opportunities find such tools and techniques to be invaluable. Credible information creates a power shift away from price-based contracting to a true competitive marketplace that rewards quality of care. Purchasers and patients seek providers who objectively demonstrate their value on both quality and price. Part I of this article appeared in the January/February issue of The Physician Executive.     

Legal issues in accepting capitation

The effort to reduce the cost of medical, hospital, and ancillary services increasingly focuses on shifting the financial risk for the cost of these services to those who provide them. Shifting arrangements include capitation for physicians classified as "primary care" physicians; capitation arrangements that include primary and specialty services; risk shifting to medical groups, IPAs, and other physician organizations; as well as the packaging of physician and hospital services on a "full risk," "per case," or other basis. Accepting financial risk for the cost of medical and other health care services, as well as the responsibility for managing the provision of services, may very well be the only remaining opportunity for providers to maximize reimbursement and maintain administrative and clinical self-direction. However, physicians must work with managed care organizations (MCOs) through negotiation of contracts and throughout the relationship to make sure: Unnecessary financial and legal risks to the MCO and physicians are eliminated. Risks that cannot be eliminated are apportioned between the MCO and physicians. All risks are managed in a coordinated fashion between the MCO and physicians.     

Common denominators of success

There is no mystery to the success stories described in this column. In addition to a lot of hard work, a few basic principles have been applied to widely differing scenarios. These common denominators provide the philosophies and dynamics that can lead to your breakthroughs in quality health care delivery: (1) Trust--among the physicians and then between them and management and the board of directors; (2) positive physician culture and attitudes; (3) effective physician leadership; (4) patient care focus; (5) strong team orientation; and (6) true accountability by all stakeholders. Your job is to help your physicians feel they are major stakeholders in your health care delivery system and be their voice in clinical and financial decision-making at the highest level.     

Building a framework to transform health care

Advances in information technology are helping clinicians to realize the promise of evidence-based medicine, which includes benchmarking, outcomes monitoring, predictive modeling, and clinical pathways. By integrating individual clinical expertise and the best available research, physicians can apply the disciplines and techniques of clinical research to their practice of medicine, one patient at a time. Evidence-based medicine also allows organizations to move forward with continuous clinical quality improvement programs. Standards, open systems, data warehouses, and evidence-based medicine help a health care delivery system obtain the technical infrastructure, decision-making processes, analytical skills, clinical databases, predictive models, and clinical pathways. With this information technology (1) physicians can practice evidence-based medicine and (2) the delivery system can profile clinicians' practice habits for managed care contracting and continuous clinical quality improvement.     

Capitation and informatics

When physicians, hospitals, and allied health professionals bill for services they render, their information processing requirements are relatively simple, at least compared to those of capitated organizations. When payers (insurers or employers) accept financial risk for the health care services of beneficiaries, they have usually invested in claims processing, membership tracking, and, under managed care, utilization review and provider profiling systems. But payers, for the most part, have not invested in electronic collection of clinical information about beneficiaries, nor have they tended to keep all claims they have processed in electronic form for study after accounts are settled and payments disbursed. In this article, we will explore why informatics is so important to capitated organizations and why payers that have traditionally taken financial risk for insuring the health care costs of populations are also learning about the importance of informatics.     

Health care trends, Part 2. The new health care team. Panel discussion

In Part 2 of this third annual panel discussion, six experts talk about the growing diversity of health care providers and what it means for consumers and physicians. Americans are getting their wellness and health care services from a wider variety of non-physician practitioners than ever before. The number of allied health and alternative providers with direct patient access is likely to continue growing. This trend is being driven by consumer demand, by the lobbying efforts of non-physician providers, and by federal, state, and private payers who see the potential for reduced health care spending, greater consumer satisfaction, and better outcomes. In practice, this means physicians and non-physician providers, some of whom may not be sanctioned by the medical establishment, are obligated to collaborate as a team. Members of this new provider team will have to communicate effectively (with each other, with consumers, and with payers) and make evidence-based clinical decisions. Physicians may have to share decision-making with other members of this new health care team.     

Twenty steps to survive managed care.

The health care industry is in the midst of discounted, price-driven, managed care. Many older physicians, not wanting to practice in this environment, are opting for early retirement. Others sell their clinical practices to management companies or hospitals to avoid the economic reality of day-to-day financial management. Most of these private practices are losing money every year. However, there still are a large number of physicians who have not sold their practice. As capitation continues to grow, these physicians will experience severe cash flow problems unless their financial plight is addressed rapidly. If it is not, the resultant cash flow problems will cause accounts payable to grow. Twenty steps are outlined that a physician or group should take right away to maintain a healthy cash flow. These include: Instituting a nurse triage system, setting up an after-hours clinic, getting the co-pay at the time of service, implementing a patient satisfaction questionnaire, monitoring the capitation reports, and checking capitation lists.     

The importance of data warehouses for physician executives

Soon, most physicians will begin to learn about data warehouses and clinical and financial data about their patients stored in them. What is a data warehouse? Why are we seeing their emergence in health care only now? How does a hospital, or group practice, or health plan acquire or create a data warehouse? Who should be responsible for it, and what sort of training is needed by those in charge of using it for the edification of the sponsoring organization? I'll try to answer these questions in this article.     

The physician executive "arrives"--a new generation prepares for the future

The recent rise in the number of physician executives in the health care industry vividly demonstrates that a genuinely new generation of physician executives is seeking to combine the sensitivity of their clinical skills with the business acumen that today's health care organizations need to prosper and grow. But physicians who are preparing themselves to be selected one day as chief executive officers by hospitals, integrated systems, and managed care organizations should understand that the CEO role is radically different from that of the CEO of a physician practice. The corporate CEO role requires the management of managers and responsiveness to the organization's board. Those who imagine that the corporate CEO role bears any resemblance to the autonomous, independent existence of the practitioner are certain to have a rough time.     

Risk alignment in health care quality and financing: optimizing value

How should health care best consolidate rational cost control while preserving and enhancing quality? That is, how can a system best optimize value? A limitation of many current health management modalities may be that the power to control health spending has been expropriated from physician providers, while they are still fully responsible for quality. Assigning responsibility without authority is a significant predicament. There are growing indications that well-organized, well-managed groups of high quality physicians may be able to directly manage both types of risk-quality and financial. The best way to optimize responsibility and authority, and to control financial and quality risks, is to place such responsibility and authority within the same entity.     

Medical decision-making around the time of death of cognitively impaired nursing home residents: a pilot study

The purpose of this article is to describe the end-of-life process in the nursing home for three groups of cognitively-impaired nursing home residents: those who died with a medical decision-making process prior to death; those who died without such a decision-making process; and those who had a status-change event and a medical decision-making process, and did not die prior to data collection. Residents had experienced a medical status-change event within the 24 hours prior to data collection, and were unable to make their own decisions due to cognitive impairment. Data on the decision-making process during the event, including the type of event, the considerations used in making the decisions, and who was involved in making these decisions were collected from the residents' charts and through interviews with their physicians or nurse practitioners. When there was no decision-making process immediately prior to death, a decision-making process was usually reported to have occurred previously, with most decisions calling either for comfort care or limitation of care. When comparing those events leading to death with other status-change events, those who died were more likely to have suffered from troubled breathing than those who remained alive. Hospitalization was used only among those who survived, whereas diagnostic tests and comfort care were used more often with those who died. Those who died had more treatments considered and chosen than did those who remained alive. For half of those who died, physicians felt that they would have preferred less treatment for themselves if they were in the place of the decedents. The results represent preliminary data concerning decision-making processes surrounding death of the cognitively-impaired in the nursing home. Additional research is needed to elucidate the trends uncovered in this study.     

MedDigital trends and tactics to lead into the future

Physician executives need to harness appropriate digital technology by understanding key trends and implementing best tactics. Being and doing MedDigital means taking back control and improving care--and, at the same time, improving efficiencies and the bottom line. This article presents seven e-trends that are shaping health care: (1) Consumers and patients are pushing doctors to go digital; (2) from Web health information to MedDigital decision support; (3) beyond managed care to custom health; (4) wireless is the way of the new world; (5) Passive web portals yield to digital destinations; (6) e-commerce means lower transaction cost; and (7) develop e-health care ROI methodologies and track results. The authors provide myriad examples of new technology that will revolutionize health care and provide both physicians and consumers with valuable interactive tools to enhance health, treatment, and decision-making.     

Community health information networks. Threat or opportunity in the doctor-patient relationship?

The last half of the 20th Century has been witness to numerous changes in the delivery and financing of health care services. These changes have impacted the one-to-one doctor-patient relationship that may have existed in the past to become a complex of relationships. The contemporary physician collaborates with many other professionals to assist in the delivery, financing, and monitoring of health care services. These clinicians and other professionals require access to patient information to deliver care and secure payment. The patient understands this. Yet the patient has concerns about the widening circle of persons authorized to access his or her information. These concerns have been amplified by the development of community health information networks--(CHINs). This article focuses on CHINs, both patient concerns and the role physicians can take in developing them.     

Removing barriers to technology

Health care executives need to take every step possible to overcome barriers to adoption of new technology by physicians. Through just a few relatively simple and inexpensive strategies, they can enable their physicians to use the clinical information system and bring value to their patients, health system and medical staff.     

When push comes to shove: implementing VBAC practice guidelines

The dramatic increase in U.S. cesarean sections over the past two decades has been significantly driven by repeat C-sections. In response to this trend, clinical guidelines recommending vaginal birth after cesarean-section (VBAC) have been promulgated by national organizations. Adherence to these guidelines would reduce the number of repeat C-sections, lower the overall C-section rate, and improve both the quality and the cost of health care. While these guidelines have received professional endorsement, their implementation has been clouded by issues of patient acceptance and provider payment. To examine implementation of these guidelines by health care organizations, the authors surveyed 156 members of the American College of Physician Executives to determine their policies, practices, and attitudes toward VBAC guidelines. Those surveyed generally were medical directors in HMOs, hospitals, and other practice settings. The findings indicate that the health care organizations represented by these physician executives have not consistently implemented VBAC guideline and that they are reluctant to hold physicians, their patients, or hospitals accountable for the financial, utilization, and quality impact of the elective decision ot to pursue appropriate VBACs. We conclude that, even when widely accepted, clinical practice guidelines may be ineffective in reducing the costs or improving the quality of medical care.     

The rudiments of an Internet-based health plan for consumers: an interview with John Danaher, MD, MBA. Interview by Richard L. Reece

Richard L. Reece, MD, interviewed John Danaher, MD, MBA, on August 16, 2000, to discuss how his new company is preparing for the perfect storm--the looming convergence of demanding consumers, defined contributions, and Internet-based health plans. He describes how his firm is putting financial and clinical tools in the hands of consumers and physicians, so consumers can be more enlightened in their health care choices. Danaher says, "We're not about buying goods and services online. We are transforming the way consumers buy health care and seek insurance. We're trying to be a 401 k where people get on, knowing their risk profile and return horizons. We aim to motivate consumers to be proactive in making health care choices. How do we make consumers responsible and motivated enough to take control of managing their health care costs? How well we articulate this call to consumer action will be the key to our success."     

Complementary and alternative medicine. Integrative medicine: business risks and opportunities.

Much of the buzz over integrative medicine is well deserved. The opportunities seem to outweigh the risks, but superior management skills are needed to guide these programs through adolescence into clinical and business maturity. By carefully considering the staffing, team building, compensation methods, marketing, and program evaluation and development issues explored in this article, health care and physician executives should be able to steer between the rocks on their way to integrative medicine decisions that are right for their organizations. Many claim that integrative medicine has the potential to reshape health care delivery in a more patient-centered direction. While this may be true, such programs must prove themselves from financial and clinical operational perspectives in order to achieve this potential. Luminary clinical skills are not enough to guarantee the survival of such programs--a strong clinical base of expertise in alternative therapies is a key success factor. As with any health care venture, there are no substitutes for clinical excellence or sound management.     

Providing health care to human beings trapped in the poverty culture

The culture of poverty impacts everything patients in this socioeconomic group think and do. If what poor patients say does not sit well with the way we think, that doesn't mean they are wrong. Physicians have to adjust their mental model and think in different cultural terms. The author recently completed his thirtieth year of a career dedicated to providing health care to people living in poverty. He shares seven concepts important in building a mental model that will enable physicians to successfully provide health care to this patient population: (1) Poverty is the number one health problem; (2) we see same diseases as everyone else; (3) patients are trapped in the poverty culture; (4) patients' behavior is often manipulative; (5) compliance is a unique challenge; (6) patients have limited resources; and (7) the ultimate contributors to poverty are unwanted adolescent pregnancy and substance abuse. These concepts can help physicians to be more effective in providing health care to patients living in poverty. They can help them understand what is happening, so that their experience might be fulfilling rather than demoralizing.     

Managing the mixed physician practice.

In general, utilization of health care resources translates into physician income. In both a capitated and a fee-for-service environment, the physician is reimbursed for patient care. The reimbursement structures of these two systems is quite different, however, and this difference creates a perplexing reward system for the physician. This article has two goals: To focus on the decision-making process of physicians in a mixed fee-for-service/HMO environment and the potential for cognitive dissonance in this system. To propose an approach for physician leaders in this setting to not only manage and minimize cognitive dissonance, but also strategically position their group for a successful future.