Aug 7, 2014

Healthcare’s Disruptive Innovator

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Disruptive Innovation is a term widely attributed to Harvard Business School professor, Clayton Christensen. Often used interchangeably with the term, disruptive technology, there is an important distinction: the former represents not just advancements in underlying technology but the innovative application of that technology.

Disruptive innovation is something that concurrently, though at varying speeds, creates a new market while disrupting an existing market in ways that essentially had not been anticipated. Examples frequently cited include the introduction of personal computers and the impact that had on mini and mainframe computers; cellular phones’ impact on fixed line telephony; the iPod’s impact on the music industry; and most recently – retail medical clinics’ impact on traditional physician offices.

Enter The Clinic at Walmart.

Writing in the Healthcare Finance News, Contributing Editor Anthony Brino writes how Walmart is now wading into physician territory. Having already opened over 100 walk-in clinics across the country that provide access to medical care through collaborative agreements with local hospitals and/or physicians, this latest move – directly employing nurse practitioners – is part of a longer term strategy for Walmart to be self sufficiently ingrained as a primary care provider.

And of course, it’s not just Walmart that is seeking to capitalize on the increasing demand for primary care coupled with the escalating cost of that care: according to a 2013 report from Accenture Research the number of retail health clinics is anticipated to double over the next three years from 1,400 to 2,800. The core value proposition is increased access and greater convenience at a substantially lower cost than a visit to a doctor’s office.

What we are really looking at here is the commoditization of Medicine. The underlying premise is that a wide swath of fundamental and routine aspects of primary care can be automated and standardized: treatment of simple acute conditions, preventative care (e.g., vaccinations), wellness screening, diagnostic testing, etc.

There are substantial reasons to be concerned with the promulgation of retail clinics, particularly where they serve in lieu of primary care physician relationships. For starters, nurse practitioners – which undoubtedly must be a critical element in expanding primary care – simply do not have the same level of training and experience as a board certified physician. Their ability to assess, decipher and act upon the nuances of a patient’s conditions are – in general – not going to be the same.

The historical relationship of a patient and his or her physician becomes over time an invaluable knowledgebase that the physician relies upon to identify changes in a patient’s condition that may warrant investigation. And convenience can be a double-edged sword. Being prescribed an antibiotic for a virus that someone then confidently carries with them to their work environment not only prevents that individual from staying home and getting needed rest – it unwittingly exposes coworkers to that virus, which the antibiotic does nothing to control (or treat).

But what disruptive innovation is without its unintended consequences? Look at how much time we now spend in front of computers instead of outside exercising. Cell phones migrated to smart phones that people now use to text their way to oblivion: in 2012 over 3,300 people were killed in distraction-related crashes. Whether the paradigm shift in the music industry is a positive or negative I think depends a lot on  your age – but as with all other such innovations, nothing will ever be the same.

That is true for the healthcare industry and the practice of medicine: nothing will ever be the same – except our resistance to change – that won’t change.

Cheers,
  Sparky

Filed Under: In the News, Retail Healthcare · Tagged: , , , , ,
Jul 22, 2014

As the ACA Turns

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So now what?

If the Affordable Care Act was a soap opera – and who’s to say it’s not – I think even Susan Lucci would have lost faith by now in the merits of a plot leading to any type of long-term resolution, clarity or certainty.

The U. S. Court of Appeals for the D.C. Circuit ruled today in the Halbig v. Burwell decision that the IRS had incorrectly allowed the subsidization of insurance premiums to millions of Americans covered under the Act’s health insurance exchanges. Then about an hour later, the U.S. Court of Appeals for the Fourth Circuit, in Richmond, argued that the IRS was within their legal power because the subsidies they provided were, “a permissible exercise of the agency’s discretion.”

Following along?

The Act provides that subsidies be provided to “state-run” exchanges, but whether through political objection or inability, 27 states opted to have the federal government establish and operate their exchanges while another 9 states opted to have their exchanges jointly ran by state and federal agencies. So by an interpretation of the letter of the law subsidies are unavailable to individuals living in those 36 states.

In writing the 2-to-1 majority opinion on the Halbig decision, Judge Thomas Griffith noted that, “we reach this conclusion, frankly, with reluctance.” Why? Because according to the Robert Wood Johnson Foundation an estimated 7.3 million people — about 62 percent of those expected to enroll in federal-run exchanges by 2016 — could lose out on $36.1 billion in insurance subsidies. Over 7 million individuals could be losing an average of $4,400 in annual subsidies (based on Congressional Budget Office estimates for the current year).

What each court had to wrestle with was whether it was Congress’ intent to provide expanded access to healthcare insurance through premium subsidization irrespective of whether the exchanges are ran by state or federal governments. Judge Griffith wrote that, “the fact is that the legislative record provides little indication one way or the other of congressional intent, but the statutory text does. Section 36B plainly makes subsidies available only on Exchanges established by states.”

And there’s the rub. Looking back to the summer of 2010, the legislative process leading to passage of the Affordable Care Act was ridiculously chaotic, incredibly politically charged and fraught with misinformation being spewed in all directions by nearly every stakeholder who could find a media outlet. All (as in both) parties being equally complicit in disinformation

John Earnest, White House press secretary noted, “you don’t need a fancy legal degree to understand that Congress intended for every eligible American to have access to tax credits that would lower their health care costs, regardless of whether it was state officials or federal officials who were running the marketplace. I think that is a pretty clear intent of the congressional law.”

I think he is wrong. It’s not clear because the legislative process leading up to and through passage was anything but. In fact, it can be effectively argued that lack of clarity was a direct result of favoring political expediency over legislative pragmatism. The Act is very poorly written and is fraught with these types of examples where implementation wasn’t very well thought through. But that lack of clarity – and legislative ambiguity in particular – is not grounds for overturning legislative intent.

Writing today in The New Republic, Brian Beutler argues that applying Supreme Court Justice Antonin Scalia’s concept of “overall statutory scheme,” that, “the words of a statute must be read in their context,” it is unambiguous that it was Congress’ intention through the ACA to provide insurance subsidies a priori of the means and mechanisms of the exchanges. Even if the argument could be made that it was ambiguous, Beutler notes that there is still the need to determine whether the law has been interpreted plausibly. In either case, it seems unlikely this latest attempt to derail the ACA will ultimately succeed.

But let’s assume that it does. I think it could easily be a case of be careful what you wish for because you might just get it for republicans. By the time this issue would make it through the Supreme Court there will be at least over 7 million individuals that are going to be told they will suddenly lose what then could reasonably be a $5,000 a year benefit. All that would be required to maintain the benefit would be an administrative language modification, which republicans could refuse as a plausible effort to cripple the Affordable Care Act. They would be in a politically very difficult spot – but then that seems to be a self-inflicted level of comfort they’ve grown accustomed to.

So stay tuned, as they say . . .

Cheers,
  Sparky

Picture credit: Time Magazine

Filed Under: Affordable Care Act, Editorials & Opinions · Tagged: , , , ,
Jul 16, 2014

The Lunacy of Our Mental Health Policy

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MEDICAID1-master675An institution for mental diseases (or, “IMD”) is defined as, “a hospital, nursing facility, or other institution that is primarily engaged in providing diagnosis, treatment, or care of persons with mental illness, including medical attention, nursing care, and related services” (42 U.S.C. §1396d(i)).

Last week the New York Times ran an article addressing the infamous Medicaid IMD exclusion: the culmination of state and federal policies dating back to the 19th century up to and including the Medicare Catastrophic Act of 1988, in which an IMD was infamously defined as a facility with more than 16 beds.

The apparent intent at that time was to promote small, community-based group living arrangements as an alternative to large institutions. But what has resulted is that Medicaid covers mental health treatment for a large percentage of people with Medicaid, but that coverage is excluded for inpatient treatment of adults aged 21 to 64 in any acute or long-term care institutions with 17 or more beds that are primarily engaged in providing treatment for mental illnesses. This is what is known as the Medicaid IMD exclusion.

Another indirect consequential reality of the IMD exclusion is what’s known as psychiatric boarding. The 1986 Emergency Medical Treatment and Labor Act (EMTALA) requires hospitals participating in the Medicare program to provide a medical screening examination of any person presenting to its emergency department regardless of the ability to pay.  For psychiatric emergencies, an individual expressing suicidal or homicidal thoughts or gestures, if determined to be dangerous to themselves or others, the hospital must either provide treatment until their condition is stabilized – or transfer that person to an inpatient facility where the person can be treated until the condition is stabilized.

But there’s the rub: since so many individuals with mental illness (and addiction is considered a mental illness) are Medicaid patients there are very often limited alternatives for transfer.  Thus those patients tend to stay in emergency departments longer than necessary – an expensive consequence because of the cost intensive nature of ED’s. Communities work hard to develop informal diversion relationships to try and address the issues and challenges this creates: but their time could be better spent – like on improving patient care.

Section 2707 of the Affordable Care Act, Medicaid Emergency Psychiatric Demonstration, is a three-year pilot program that permits non-government psychiatric hospitals with more than 16 beds to receive Medicaid payment for providing EMTALA-related emergency services to Medicaid recipients aged 21 to 64 who have expressed suicidal or homicidal thoughts or gestures, and who are determined to be dangerous to themselves or others.

But this only addresses specifically-defined crises and will take a long time to be tested, evaluated and debated. It does not address the epidemical crisis we face as a nation with heroin addiction. So even though 26 states have willingly or unwillingly embraced Medicaid expansion under the ACA, many of the individuals needing inpatient treatment for addiction will be unable to receive that treatment.

A recent study published by researchers at the Boston Medical Center in the JAMA Internal Medicine Journal  reaffirmed the importance of combining inpatient and outpatient treat of heroin addiction. From the NYT article: for many suffering with heroin addiction, “there is an undeniable and essential need for residential treatment,” said Allen Sandusky, the South Suburban Council’s chief executive in Chicago.

Study after study has demonstrated that substance abuse treatment and rehabilitation is less expensive than incarceration as an alternative to addressing individual addiction and alcoholism. At the same time, economies of scale driving greater efficiency and lower program costs in facilities that allocate overhead over a larger number of beds is just economically intuitive.

When all these considerations are taken together with the skyrocketing costs associated with increasing crime and the burden being placed on community first responders as a direct result of the heroin epidemic it would seem like the biggest no-brainer in the history of earth is to legislatively repeal the IMD exclusion. Thus be to the ignominious wasteland that is Washington, DC.

At a time when communities across the country are scrambling to address a heroin epidemic that is literally destroying those communities and the families living there Congress is focused on a lawsuit against the president (the House) and an irrationally urgent need to reverse the Supreme Court’s innocuous Hobby Lobby decision (Senate). Shameful, truly shameful. Even more so than usual.

Cheers,
  Sparky

Photo credit: Armando L. Sanchez for The New York Times

Filed Under: Editorials & Opinions · Tagged: , , , , , , ,
Jun 26, 2014

Don’t Make Mental Health Policy About the Stigma

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Cost of not caring: Stigma set in stone by Liz Szabo, USA TODAY.

This second article of a USA Today series, Mentally Ill Suffer in Sick System, this morning began exploring, "the human and financial costs that the country pays for not caring more about the nearly 10 million Americans with serious mental illness." But the article didn’t address any of the aggregate human costs nor any of the financial costs the country pays due to serious mental illness. Maybe future articles will, and that’s what I would like to encourage with this post.

Now, admittedly, USA Today isn’t in the top 10% of resources I normally rely upon for keen insights and emerging trends and drivers in healthcare, but nonetheless I think they deserve enormous credit for using their national reach to bring greater awareness to a critically important issue.

From a public policy perspective, however, this first contribution is wide of the mark in advancing the type of dialogue that could actually lead to meaningful public policy initiatives impacting mental and behavioral health services. So though I very much doubt their editors will ever see this post, I would like to provide some input that might be useful in developing content for future articles in the series.

Today’s article focused on two themes: the latent impact that stereotypes associated with mental illness still have, often creating self-absorbed obstacles to seeking and receiving much-needed diagnosis, treatment, support services and ongoing care; and the dramatic lack of sufficient resources committed to helping those who are brave enough to seek assistance and support.

Of course, stigmatism is still very real, yet very difficult to understand: it isn’t just a case of stereotyping and ignorance. Mental illness is difficult for many of us to comprehend because the mechanism responsible for its existence is the same mechanism we use to understand it. Most of us can use our brains to understand heart disease, diabetes and lung cancer. But somehow using our brains to explore and reason through a disease process that in others (or, to be sure, often ourselves) impacts our thinking can be uncomfortably counterintuitive.

The inherent stigmatization isn’t just in the fact that someone with mental illness is, "different." It’s the added frustration of having difficulty understanding why they are different. An individual receiving chemotherapy for cancer may look different than their appearance prior to disease. Someone who has had an amputation resulting from diabetes has a noticeable difference in appearance. But mental illness very often doesn’t carry with it the externalities of these changes in appearance (the manifestation of behavioral health consequences resulting from mental illness may lead to dramatic changes in appearance, but those are usually self-chosen much the same way one would choose a different hair color or style).

So while it may be said that ignorance is a lack of understanding acted upon, I agree we should continue to concentrate efforts on building understanding and awareness through continued education, rather than trying to coach away ignorance through reprimand and humiliation that too often characterize so many public awareness campaigns.

Such efforts have had beneficial impact: as a society we are generally much more accepting today than 20 years ago that mental illness is not a self-chosen condition bearing the shame of poor choices and moral subservience. And they have concurrently raised awareness about the urgent need to develop more effective public policy to address accelerating mental and behavioral health needs.

And so, as related in the USA Today article, the most emotionally convenient and expedient approach to lobbying for additional funding in support of MH/BHS is to continue making the case that mental illness should be viewed just as any other disease of a human organ – since the brain is, after all, a human organ. This reflects the inherent strategy that fighting the stigmatization of mental illness will hold sway over those able to increase funding of MH/BHS policy initiatives. But I don’t think it will because every dollar allocated to healthcare is becoming increasingly precious.

From a policy perspective, I believe it is both folly and a wasted effort to spend valuable resources on lobbying for more funding without being able to provide realistic and achievable budgetary offsets. To do this, advocates of MH/BHS programs need to focus their time and energy on generating evidentiary support for where and how funding of existing programs that address the consequences of mental illness can be more effectively invested in programs that diagnose and treat mental illness – i.e., before that illness results in consequences which place resource strain on other areas of social health and welfare (e.g., utilization of hospital emergency departments and the criminal justice system, the economic impact on families and the cascading effect that has on the rest of society). This is, I assume, what USA Today claims the series intends to do via relaying the “human and financial costs” of mental illness. We will see.

In healthcare, we are now living in an era where the expectation that research and evidence support clinical decision-making has steadfastly made its way into organizational administrative and financial decision-making. Quite obviously, we cannot hope that will ever be the same in Congress, but through the Affordable Care Act and various programmatic changes impacting state Medicaid budgets legislators are by default forcing healthcare providers to much more carefully analyze alternative investments – and to use return on investment as a tool for that analysis. Mental health advocates need to recognize this reality if they want their efforts to ultimately result in constructive public policy consistent with their overarching goals and objectives.

I really hope this understanding is reflected in future articles in the USA Today series. I understand anecdotal human-interest stories that tug at the heartstrings help sell newspapers, but they contribute very little to the knowledgebase of understanding needed to assess where and how limited resources can best be reallocated to address this tremendously difficult challenge that we all face as a society.

Cheers,
  Sparky

Picture Credit ~ Jim C. Jeong for USA Today

Filed Under: Editorials & Opinions, Mental/Behavioral Health · Tagged: , , , , ,
Jun 15, 2014

Much Ado About Value

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I was recently honored when Greg Scandlen took time to consider and write about some of the work I shared with him that has been produced by Michael Porter on value-based healthcare delivery. Mr. Scandlen is a regular contributor for the National Center for Policy Analysis’s Health Policy Blog, and in his article,  Value Based Payments, he argues that attempting to use the concept of value to drive systemic improvements in the US healthcare delivery system is misguided because of the inherently subjective and multidimensional nature of patient outcomes (Porter has used the equation of Value = Outcomes/Cost as the basis of arguing for industry transformation).

Michael Porter, “is generally recognized as the father of the modern strategy field, and has been identified in rankings and surveys as the world’s most influential thinker on management and competitiveness.” He has extensively researched and written on healthcare, establishing a comprehensive body of work that supports the need for reorganization of our healthcare system framed around value-based delivery.

After collaborating with Elizabeth Teisberg on their seminal work, Redefining Healthcare, in 2006 Porter wrote an article in 2010 for the New England Journal of Medicine: What is Value in Health Care? This is the article Mr. Scandlen references in his article. There are several additional contributions from Porter that add meaning and understanding to the value paradigm discussion, and these include:

Measuring Health Outcomes: The Outcome Hierarchy, a supplementary appendix to the above-referenced NEJM article;
How to Solve the Cost Crisis in Health Care (with Robert Kaplan) in the September 2011 edition of Harvard Business Review; and
The Strategy That Will Fix Health Care (with Thomas Lee) in the October 2013 edition of Harvard Business Review

There are a couple of areas where my perception of value as a catalyst for delivery transformation differs from Scandlen’s.

First, while I agree it’s true individual value is a subjective reality, my understanding of Porter’s work does not advocate for creating objective measures of value on behalf of the patient. In the October 2013 article referenced above Porter writes, “in healthcare, the overarching goal for providers, as well as for every other stakeholder, must be improving value for patients, where value is defined as the health outcomes achieved that matter to patients relative to the cost of achieving those outcomes.”

Second, Scandlen takes issue with Porter’s claim that, “in any field, improving performance and accountability depends on having a shared goal that unites the interests and activities of all stakeholders,” arguing that is counterintuitive to how competitive markets function – which Porter himself advocates for and has written about extensively. But I think Scandlen has too narrowly applied this axiom. Using his own example of how difficult it would be to imagine IBM, Apple and Microsoft having a shared goal, I would argue the goal they shared was to develop and provide lower-cost personal computing capacity and technology to individual consumers.

This wasn’t a coordinated or collusive effort to limit competition or share profits – it was a market-driven opportunity that each corporation recognized independently to bring value to consumers and be rewarded accordingly. Porter recognizes that in healthcare, in order for providers and organizations to transform delivery models based on value they must all recognize – and act upon –  the perceived economic benefits of creating value for the patient.

The graphic accompanying this post provides the six steps outlined in the October 2013 HBR article that Porter argues healthcare organizational leadership, patients and health plans/employers must pursue to achieve a high-value care delivery system. The key concepts embodied include integrated care delivery, transparency, outcome-measurement, accountability and geographic expansion of specialized capabilities (e.g., what the Cleveland Clinic has been doing through affiliations such as their recent minority interest in Akron General Hospital).

Finally, I do not believe measuring outcomes (the ubiquitous challenge facing Porter’s value equation) is a long-term effort in futility. Porter’s outcome hierarchy was an attempt to recognize and address the multidimensional nature of outcomes that Scandlen identifies. Many other such similar efforts are ongoing across the world. With the continual advancement of Big Data, the ability to monitor, analyze and report on patient-related data and information across the full spectrum of an outcome will continue to become more and more useful: to providers, insurers – and most importantly, patients.

Where the concept of outcome measurement runs into its biggest theoretical challenge is when payment models such as ACOs and episodic payment bundling seek to use such data to objectify achievement of patient value as a measurable statistic (i.e, benchmarking) used as an incentive to influence provider behavior. But the old adage of not being able to manage what you cannot measure is a critical element of value-driven performance improvement that I believe Porter effectively argues is at the heart of transforming our delivery system.

Value-driven payment models are in their genesis. Any type of industry transformation at this juncture is going to endure understandable resistance and criticism.  The train has left the station. Industry transformation based upon value-driven performance is already well entrenched as represented by organizations such as St. Joseph Mercy Oakland Hospital (Pontiac, MI), Adirondack Medical Home Pilot (NY) and Dignity Health, Hill Physicians and CalPERS.

There is legitimate concern that data and analysis on outcomes will be used to supplant patient choice. I don’t believe that is what Porter and colleagues had in mind when writing about value-driven healthcare delivery. Of course that doesn’t mean their intentions won’t be bastardized in the interest of bureaucratic ignorance and expediency. This risk must be carefully guarded against, but it does not in and of itself change the important role value must play in transforming our healthcare delivery system.

Cheers,
  Sparky

Filed Under: Editorials & Opinions · Tagged: , , , , ,
May 29, 2014

The Human Spirit as an Organ

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Brain-Lightbulb1-214x300May 23rd, 2014 – Santa Barbara, California: another day, another shooting rampage, a few more souls lost to mental illness. More calls for gun control. More calls for funding of public health programs. More wringing of our hands and gnashing of our teeth where as a society we wrestle with what we can do to prevent disturbed individuals like Elliot Rodger from senselessly taking the lives of others.

I’d like to take a pragmatic approach to what we might do, starting with gun control.

As we saw recently, opponents of gun control are very effective politically at making impassioned arguments that owning a gun is the manifestation of a God-given right to defend personal self and property against threats from others – and most particularly in the minds of some political activists  (i.e., the Tea Party), the government. And they have huge lobbying strength.

Now I feel I have to share, that even for those most zealous gun enthusiasts with huge caches of automatic weapons I truly don’t understand how they would expect to defend their neighborhood against an AH-64 Apache helicopter should there ever be a military-supported government coup. Can’t you see it? A long row of sixty-something Harley riders with ammo strips strapped over their shoulders, long grey hair flowing from under their skull n bones bandanas. Waving their AK-40’s wildly as they fall like dominoes. Sort of like us fifty-something’s having to get under our desks in grade school during the 60s to rehearse protecting ourselves against a nuclear attack. But I digress.

Humor aside,  I think it’s important in this discussion to understand that gun ownership is a culturally ingrained part of wide swaths of our society. Unless that changes gun control legislation and regulations will have about as much success in the 21st century that Prohibition had against controlling alcohol production and consumption in the early 20th century. And perhaps there is a measure of truth in recognizing that in both instances the policy focus is misplaced by not recognizing the ultimate responsibility of acts committed under the influence or with a weapon (or both) lies with the individual, not the bottle or the gun.

So ruling out much hope for gun control as a viable approach to prevent these types of tragedies we next turn to doubling down on promoting policies that will expand access to mental health services.  But what if rather than spending more money to treat mental illness and its symptoms as distinct and separate from physiological well being we instead doubled down on efforts to understand how critically important it is to treat mind and body together.

I realize there are earnest efforts all across the country to integrate physical and mental health and move toward holistic well being. But from what I have seen those efforts are mostly incremental in nature and not going to create the transformational shift in health practitioners’ approach that can ultimately have the type of impact on mental illness we seek.

I think what is required is a paradigm shift in thinking about where and how mental health integrates with the overall health and wellness of the individual. We need to begin recognizing that mental well-being is a spiritual reality that, while ultimately the manifestation of physiological attributes, exists independent of those attributes.

And in this way it is just as much a vital organ as is the heart, the brain and so on. And that leads me to believe we should be thinking of human mentality as an organ. Just as our physical organs are necessary to provide human cells with basic needs to sustain life, we are learning more every day how important our human mentality is to cellular health.

I believe if we can broadly achieve this vantage it would change the way we approach research, the way health practitioners integrate awareness of mental health into diagnoses and treatments, the way we approach and treat symptoms of mental illness – and it would change the way we view mental health policy.

Your thoughts?

Cheers,
  Sparky

Filed Under: Editorials & Opinions, Mental Health · Tagged: , , , ,
May 14, 2014

Mental Health in Crisis

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The cost of not caring: Nowhere to go ~ The financial and human toll for neglecting the mentally ill is the first in a new series of articles being produced by USA Today tackling this hugely critical issue (by Liz Szabo). Rep. Tim Murphy, R-Pa. (a child psychologist) declares that, "we have replaced the hospital bed with the jail cell, the homeless shelter and the coffin. How is that compassionate?"

Mental health services and programming has taken it on the financial chin as an unfortunate lesser of evils political choice among state programs that have traditionally provided funding. According to Robert Glover, executive director of the National Association of State Mental Health Program Directors, $5 billion was cut from 2009 to 2012, while 4,500 public psychiatric hospital beds were eliminated (a 10% reduction).

Mental illness is still not broadly well understood in a way that even starts to approximate its impact on society. The USA Today article estimates that approximately 10 million Americans with serious mental illness are not receiving care. While at the same time, individuals with serious mental illness have a probability of dying 23 years younger compared to others.

The costs to society are dramatic: in excess of $440 billion a year. And only about one-third of that total goes to medical care. Much of it reflects disability payments and lost productivity. And that amount does not include lost earnings or tax revenue spent on prisons.

The timing is not good. State budgets are already being stretched and the national focus is on how to take costs out of the system – not add more. Medicaid expansion is likely to help identify greater need for mental health services without any commensurate plan in place to address those needs.

Yet we simply cannot afford to continue down the care delivery path we have forged. Mental illness is often a root cause for various physical illness and chronic conditions. Tragic events like Sandy Hook Elementary, Virginia Tech and Fort Hood remind us of the potential incident costs of untreated mental illness – but a fitting analogy of those events to the broader problem might be comparing the tragedy of an airplane crash to the number of traffic fatalities across the country each year.

Recently in true Washington partisan fashion Republicans and Democrats illustrated their shared compassion for those suffering from mental illness by drafting legislation designed to promote political distinctiveness rather than policy progress (though it should be noted that in this instance the Democratic initiative has to be viewed as politically reactive). Here’s hoping maybe someday that will change and this country can start having the very serious and much needed conversation on how to address this terrible crisis.

Cheers,
  Sparky

Filed Under: In the News, Mental Health · Tagged: , , ,
May 14, 2014

Why Can’t Healthcare Innovate?

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Whether viewed as paradox or conundrum, the healthcare industry’s relative inability to innovate has long been a source of both fascination and frustration. In the May 8, 2014 edition of the New England Journal of Medicine,  David A. Asch, M.D., M.B.A., Christian Terwiesch, Ph.D., Kevin B. Mahoney, B.A., and Roy Rosin, M.B.A. write about this phenomenon in Insourcing Healthcare Innovation.

Describing the understandable resistance of healthcare professionals to embrace problem-solving techniques from unrelated industries because the complexity of healthcare delivery is most often not well understood, those professionals are by definition usually most interested in exploring new ideas, new approaches and the pursuit of new knowledge. This apparent irony, the authors believe, might be effectively synchronized if a different approach could be taken to reconciling innovation with contextual understanding.

The approach they share is a four-stage design process they believe can achieve this reconciliation. The four stages include: contextual inquiry (understanding the processes currently in place); problem definition (ensuring the right problem has been understood and defined); divergence (exploring alternative approaches) and rapid validation (ability to move from theory to implementation).

If these sound familiar, it is because the general direction of proceeding from understanding where you are to achieving where you would like to be in an orderly fashion is the foundation of many approaches to strategic planning. So from that vantage there isn’t anything particularly revolutionary about the process described.

But understanding the core resistance to such processes – that the way in which healthcare practitioners are educated, trained and practice is frequently counterintuitive to innovation techniques successfully utilized in other industries – is an important distinction. What this translates into is making the requisite investment to understand the unique attributes and complexity of healthcare delivery – its distinctive product offerings, its highly dependent reliance upon personal relationships, its unbelievably complicated regulatory environment – as a necessary component of any planning effort.

It takes time and effort to build the needed understanding of the unique challenges that healthcare practitioners face. You have to ask probing questions and not hesitate to admit your lack of understanding: a fair balance of humility and curiosity can go a long way to building key relationships and creating the requisite knowledgebase necessary to innovate.

In other words, individual egos often create barriers to innovation processes that are attempted to be imported from other industries. More so than representing a different way of approaching innovation in healthcare, what this article does is reinforce a tried and true means of any planning effort: listen and learn before you lead.

Cheers,
  Sparky

 

Filed Under: Innovation · Tagged: , , , ,
Apr 20, 2014

The Business of Medicine

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The primary reason I love what I do is that gaining competitive advantage (as in being able to stay in business and provide for a family) requires a commitment to continuous learning. If I could change one thing about myself after all these years it would be to increase my reading speed without sacrificing comprehension. I often get frustrated by not having enough time to learn everything I would like.

Sometimes learning isn’t so much about discovery as it is connecting the dots you’ve discovered previously. You are engendered to reconsider what once were disparate pieces of knowledge and see how they can be formed into new thinking. This was the case for me recently when I read a blog post of A Country Doctor MD contributing to the KevinMD.Com blog site.

The article, If a doctor isn’t face to face with a patient, is he still a doctor? explores the fundamentals of a physician’s business model in lieu of regulated fee for service payment methodology. It explores the often paradoxical relationship between between time and money in the practice of medicine. I found that the issues and challenges described resonated with me because I have to deal with the same business issues and challenges.

There are parallels between the practice of medicine and consulting. Both businesses’ core value proposition is individual knowledge, reasoning and the ability to collaborate with others to solve problems. The risks and consequences of getting the right solution in medicine are decidedly much greater – and this should be reflected in higher comparative compensation. But I don’t think that is universally true by a stretch, and here’s why.

As the leader of a small boutique consulting firm determining how to price and sell engagements is a constant challenge. You are always building on your knowledge, so that the next client gets the benefit of what you learned working with the client before (I don’t know this to be true, but I would imagine it’s a similar situation with physicians: it’s a practice). We are always wrestling with how to price services when the value proposition is a desired outcome while the measurement of cost is in units of time.

And you get more efficient as you practice, so that the relative work effort to produce solutions decreases as experience increases. But that doesn’t necessarily translate into higher income because you have to remain market competitive. Of course, ideally over time your hourly rate increases to reflect the increase in value provided: getting the right solutions faster. That is, in consulting at least.

I don’t want to belabor the nuances of professional services business models. I share these observations simply to make a point. In consulting, we have the luxury of pricing our work based upon what we think is in the best long-term financial interests of ourselves and our consulting practice. The physician who is forced to accept a payment schedule – whether from governmental agencies or private insurers – does not have that luxury.

With the recent release by CMS of the Provider Utilization and Payment data there have been reverberations in the media about physician income and the relative contribution of cost to our healthcare system. I am not advocating for less transparency even if, as I wrote last week, the data as it was released is quite misleading. All I am saying is that given the comparative amount of education required (time and cost), the stress level involved and the regulatory handcuffs applied, I wouldn’t want to trade. I think this is something that policymakers had better consider and understand very soon – because I can’t stand the site of blood, nor read fast enough.

Cheers,
  Sparky

Photograph: from thechart.blogs.cnn.com

Filed Under: Editorials & Opinions · Tagged: , , ,
Apr 4, 2014

SNF Value-Based Purchasing Under SGR Extension

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Earlier this week President Obama signed into law H.R. 4302, the Protecting Access to Medicare Act of 2014. The sole impetus of this legislation was to once again avert – by one year – the nearly 24% cut to the Medicare physician fee schedule that was initiated as part of the Balanced Budget Act of 1997 under the Medicare Sustainable Growth Rate (SGR) methodology. This marks the 17th time in 11 years now that the automatic cut has been averted by legislative action. Congress knows how to kick a can.

Just a few weeks back there was a fair amount of optimism the SGR might be fully repealed and replaced with a “permanent” payment methodology. There was bipartisan support in both the House and Senate, but as you might expect, wide differences in how to pay for the repeal. While Republicans sought repeal of the individual mandate, Democrats wanted to tap into unused military spending. And there you have it then.

In about 11 months from now Congress will be back to the same spot of having to deal with a pending fee cut, but it will be a different Congress.  Just how different of course should make for a fascinating late summer/fall entertainment for political wonks. In the interim, however, there are a number of non-physician related items included in this Act that are worth noting, including a delay in the implementation of ICD-10; acceleration of LTCH moratorium; changes to Medicaid disproportionate share hospital (DSH) payment reductions; limitation on the two-midnight rule enforcement; as well as other provisions.

SNF Value-Based Purchasing
In addition, the Act calls for the establishment of two hospital readmission-related measures for skilled nursing facilities (i.e., value-based purchasing for SNFs). The first measure is an, “all-cause all-condition” hospital readmission measure; and the second is to encompass, “all-condition risk-adjusted potentially preventable hospital readmission rate.”

The implementation of this program is a few years off: actual reductions in Medicare reimbursement based upon comparative readmission performance won’t take effect until FY 2019 (i.e., SNFs with fiscal years beginning on or after October 1, 2018). But when it does take effect, those organizations with relatively lower hospital readmission performance will be penalized two-percent of their otherwise Medicare reimbursement. In turn, up to 70% of the savings achieved from this penalty will be redistributed to those organizations achieving relatively better readmission performance.

No doubt the process for developing these measures will be contentious despite assertive measures to avoid bias and/or misrepresentation of care indicators included in the Act. And with penalties not starting until four-plus years from now who knows just how (or even whether) the program will be implemented.

Implications
Clearly the sentiment in Washington – at least today – is to shift reimbursement from post-acute/long-term care to acute care. And the preferred means of accomplishing this will be to focus on perceived opportunities for cost savings while improving, or at least without impacting, quality care. The value paradigm: quality divided by cost.

In advance of the value-based purchasing program will be the QAPI initiative, regulations for which are anticipated later this summer. SNF organizations will have to be able to develop quality assessment and performance improvement programs that support being able to predictively monitor and model hospital readmissions given a variety of qualitative and quantitative indicators requiring real-time operational and clinical adjustments.

For many smaller SNF organizations this is going to be a daunting task because of the investment requirements. They will be caught in the unenviable spot of having to make substantial capital investments to maintain cash flow levels that already cannot support capital accumulation. As such, within the next few years they will be faced with closing, merging or selling.

So although the revenue impact of value-based purchasing is still several years away, all SNFs would do well to begin understanding and assessing their short and long-term financial viability in lieu of these forthcoming requirements – while there are still choices available.

Cheers,
  Sparky

Filed Under: SNF Value-Based Purchasing · Tagged: , , , ,
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