"Look at a day when you are supremely satisfied at the end. It's not a day when you lounge around doing nothing; it's when you've had everything to do, and you've done it."
Margaret Thatcher
Wednesday, March 31, 2010
Friday, March 26, 2010
Reform and hospitals
Reform means that everyone has skin in the game, individuals, employers, states, the federal government and insurance companies. They are now the new "consumers" of healthcare. And it will be confusing to all of them as they figure it out. So what will they look for: the best value for their dollar. How they define value will change by constituent, by age demographic, by plan. What they will all have in common is an overwhelming interest in the cost! They collectively will never pay on the curve we are going on in healthcare delivery.
So what do hospitals need to do:
1. Help define the measurement of value: quality, quantity and cost. Outcome data will be key but preventive services, highest quality physicians, and cost will be the test.
2. Integration: delivery from one provider and service to another must be more consumer friendly. That includes all processes.
3. Information: consumers want it. They want their own info and they want info to compare theirs to.
4. Appropriateness: redefining community standards of care. Do you substitute great nursing and customer service for expensive testing that doesn't add value?
5. Understanding personalized care and getting on top of it before it becomes a costly necessity. Collaborative approaches to moving genomics into the delivery setting to eliminate wasteful treatments that don't improve outcomes.
That's just the beginning....
P.S. Do you jump on number one by being the community resources that explains to citizens how this affects them and how they should start looking at their healthcare dollar?
So what do hospitals need to do:
1. Help define the measurement of value: quality, quantity and cost. Outcome data will be key but preventive services, highest quality physicians, and cost will be the test.
2. Integration: delivery from one provider and service to another must be more consumer friendly. That includes all processes.
3. Information: consumers want it. They want their own info and they want info to compare theirs to.
4. Appropriateness: redefining community standards of care. Do you substitute great nursing and customer service for expensive testing that doesn't add value?
5. Understanding personalized care and getting on top of it before it becomes a costly necessity. Collaborative approaches to moving genomics into the delivery setting to eliminate wasteful treatments that don't improve outcomes.
That's just the beginning....
P.S. Do you jump on number one by being the community resources that explains to citizens how this affects them and how they should start looking at their healthcare dollar?
Tuesday, March 23, 2010
Wow. Its signed.
I understand the concerns over the government doing anything given the fact that I am a resident of Illinois. But this is one of the few things in life where the government should be in. So I am glad that we have started today. Why?
1. The market didn't work to solve the issue of the uninsured. It is not a market anyone wants. People who are only buying what they need when they need it and because of poverty and lifestyle could actually be a bad risk (and then you have to cut them off). I ran an inner-city hospital and I can assure you that on the day we would have closed that place, no free market would have rushed in. The other struggling hospitals would have picked up the few patients on which they could make an incremental margin. THERE IS NO MARKET FOR SICK PEOPLE WITHOUT RESOURCES.
2. The system is not a system, is not a system. It is very fragmented and gamed for where the revenue comes from. It has to work that way to make up for the unbelievable fragmentation and cost-shifting. Everyone clips toenails if that is what is paid for. Every one does detox if it pays. And if you are fortunate to be in an insured market where Orthopedics, Cancer and Neuroscience pays then you look like you don't game the system. Will this be solved with reform? Not in the short term but as insurers have to take on everybody, their skin will be in the game too.
3. There is no ability to group purchase without a large entity. Even the government doesn't group purchase pharmaceuticals to the extent that the insurers do. Medicare is much more generous then my group insurance because of the politics of Medicare.
4. Medicare will go broke at the current rate (because it is an isolated political block and can't be touched as it is now) and Medicaid which is a burden on states will go broke with the extra burden of an out of control system. Some large structure has to create the moment for systemic, not piecemeal change.
5. "Managed care" needs to reemerge under the pay for performance and system incentives that are developing. The old managed care where specialized nurses managed your CHF, Coumidin and other chronic diseases and medications over the phone or computer line to keep you well and out of the ER.
6. 40% profit margin on certain lines of business that only cover the elite among us are not a sustainable model for cost control and access. The new administrative cost caps are still very generous.
Unfortunately my taxes will go up, right as my kids head toward college. I guess that means alot of change for my family who is lucky to be college-bound and insured. We are also lucky to be in America. We are also lucky that our health insurance can't cut us off for preexisting conditions now. I'm not able to say the same for my life insurance which I lost with a job change and won't be seeing again.
1. The market didn't work to solve the issue of the uninsured. It is not a market anyone wants. People who are only buying what they need when they need it and because of poverty and lifestyle could actually be a bad risk (and then you have to cut them off). I ran an inner-city hospital and I can assure you that on the day we would have closed that place, no free market would have rushed in. The other struggling hospitals would have picked up the few patients on which they could make an incremental margin. THERE IS NO MARKET FOR SICK PEOPLE WITHOUT RESOURCES.
2. The system is not a system, is not a system. It is very fragmented and gamed for where the revenue comes from. It has to work that way to make up for the unbelievable fragmentation and cost-shifting. Everyone clips toenails if that is what is paid for. Every one does detox if it pays. And if you are fortunate to be in an insured market where Orthopedics, Cancer and Neuroscience pays then you look like you don't game the system. Will this be solved with reform? Not in the short term but as insurers have to take on everybody, their skin will be in the game too.
3. There is no ability to group purchase without a large entity. Even the government doesn't group purchase pharmaceuticals to the extent that the insurers do. Medicare is much more generous then my group insurance because of the politics of Medicare.
4. Medicare will go broke at the current rate (because it is an isolated political block and can't be touched as it is now) and Medicaid which is a burden on states will go broke with the extra burden of an out of control system. Some large structure has to create the moment for systemic, not piecemeal change.
5. "Managed care" needs to reemerge under the pay for performance and system incentives that are developing. The old managed care where specialized nurses managed your CHF, Coumidin and other chronic diseases and medications over the phone or computer line to keep you well and out of the ER.
6. 40% profit margin on certain lines of business that only cover the elite among us are not a sustainable model for cost control and access. The new administrative cost caps are still very generous.
Unfortunately my taxes will go up, right as my kids head toward college. I guess that means alot of change for my family who is lucky to be college-bound and insured. We are also lucky to be in America. We are also lucky that our health insurance can't cut us off for preexisting conditions now. I'm not able to say the same for my life insurance which I lost with a job change and won't be seeing again.
Friday, March 19, 2010
Execution
Can the Democrats deliver? If so, what is it going to mean to your organization? Execution on a number of projects, on a number of sacred cows, on a number of system changes, on physician alignment, on incentive plans. Where will your focus be? How to focus your team on change? How to move out of your comfort zone?
When the spotlight switches from Congress to the Insurance Companies and exchanges....how will healthcare providers get moving for the moment, soon when the spotlight turns solely on you?
When the spotlight switches from Congress to the Insurance Companies and exchanges....how will healthcare providers get moving for the moment, soon when the spotlight turns solely on you?
Tuesday, March 16, 2010
Down to the wire.....is it a costly mess or a new start.....
Check out the Health Affairs latest blog on why it needs to pass!
http://healthaffairs.org/blog/2010/03/16/a-consumers-advocacy-group-refutes-the-anti-health-reform-myths/
http://healthaffairs.org/blog/2010/03/16/a-consumers-advocacy-group-refutes-the-anti-health-reform-myths/
Physicians needing a bailout?
Specialty vs. Primary Care. The Pendulum swings again. Specialists (Cardiology this time) take a deep cut from Medicare, one many thought they would avoid and are still lobbying againgst. So deep that many are asking for...a what...say that again....a bailout? A government bailout? No a hospital bailout!
The argument goes like this: as a cardiologist I don't make my $400k per year salary until after I am 33 years old. I work 80 hour weeks and save lives. That's only $200/hour (something no self respecting management consultant would accept!). And if you take into account the 10 years that you didn't get paid....okay I get it. No please don't take a pay cut! Bail them out!
Last time I looked, in most major metropolitan cities cardiologists were a dime a dozen. If you ask them about testing, those that have the tests available say that they probably test more than they need to because its there and if they are in a hospital without cardiac cath, god forbid, they actually do slightly less testing than average. My point, their competition is not increasing quality and decreasing price, it is actually increasing overall cost.
A 25-30% cut means a major change for these practices - fixed overhead, "fixed" salaries (why should they take a salary cut if the bankers didn't!). So what is a practice to do? Let some folks go! Restructure to provide only the services most needed? Spend more time with patients? Pay your diagnosticians the highest salaries? Manage your patients computerized record and make adjustment to keep them well and away from expensive tests? Bring in Cardiac and Geriatric Nurse Practitioners? Focus on rehab?
The head of the Association of Family Practice Physicians had little sympathy for the Cardiologists as she sees the shift in their payment going to her colleagues. Stating that the discrepancy between salaries is a factor of 4, she essentially told them to get a life!
P.S. Community based medical staff planning is different from hospital based medical staff planning. Executives should be doing both or they will be left with alot of expensively bailed out specialists and some underused capacity when bundled payments begin.
The argument goes like this: as a cardiologist I don't make my $400k per year salary until after I am 33 years old. I work 80 hour weeks and save lives. That's only $200/hour (something no self respecting management consultant would accept!). And if you take into account the 10 years that you didn't get paid....okay I get it. No please don't take a pay cut! Bail them out!
Last time I looked, in most major metropolitan cities cardiologists were a dime a dozen. If you ask them about testing, those that have the tests available say that they probably test more than they need to because its there and if they are in a hospital without cardiac cath, god forbid, they actually do slightly less testing than average. My point, their competition is not increasing quality and decreasing price, it is actually increasing overall cost.
A 25-30% cut means a major change for these practices - fixed overhead, "fixed" salaries (why should they take a salary cut if the bankers didn't!). So what is a practice to do? Let some folks go! Restructure to provide only the services most needed? Spend more time with patients? Pay your diagnosticians the highest salaries? Manage your patients computerized record and make adjustment to keep them well and away from expensive tests? Bring in Cardiac and Geriatric Nurse Practitioners? Focus on rehab?
The head of the Association of Family Practice Physicians had little sympathy for the Cardiologists as she sees the shift in their payment going to her colleagues. Stating that the discrepancy between salaries is a factor of 4, she essentially told them to get a life!
P.S. Community based medical staff planning is different from hospital based medical staff planning. Executives should be doing both or they will be left with alot of expensively bailed out specialists and some underused capacity when bundled payments begin.
What if you stop trying to fill beds?
Does your hospital have a horrible problem of patients waiting for a bed and can't get an imaging test and your staff is managing utilization to accomodate patients! Oh, you lucky one! All you think about is how to get patients to outpatient care! Hopefully you aren't adding beds! I suspect that you are the fortunate minority well financed, full, good reputation.
That is all well and good but what if you are the hospital with the 6% volume drop, the beds are not full and your entire focus in on filling them, courting doctors etc. I suspect that there is a good majority of hospitals in this category and they are creating strategies to boost their relationship with physicians and advertising their centers of excellence in OB and cardiac.
What if we stopped filling beds? Okay okay, I know that all your significant revenue is tied up there but that could change. Maybe just maybe you could be a different looking organization? Do you have the cash to transition? What are the options? What is coming down the road in terms of change that you could put your effort into? What is poorly reimbursed that makes more sense than what you are now doing that you should be advocating for? Are you too small to transition to accountable care? Or so large that it takes a tsunami to move you in a different direction? Do you really add value to the community and if so, how? Can you leverage the areas where you add value in a different way - specialty center part of a larger organization, for example?
Is this the conversation your board is having? If not, you might want to move in that direction. Its got to be more pleasant than be questioned about volume!
That is all well and good but what if you are the hospital with the 6% volume drop, the beds are not full and your entire focus in on filling them, courting doctors etc. I suspect that there is a good majority of hospitals in this category and they are creating strategies to boost their relationship with physicians and advertising their centers of excellence in OB and cardiac.
What if we stopped filling beds? Okay okay, I know that all your significant revenue is tied up there but that could change. Maybe just maybe you could be a different looking organization? Do you have the cash to transition? What are the options? What is coming down the road in terms of change that you could put your effort into? What is poorly reimbursed that makes more sense than what you are now doing that you should be advocating for? Are you too small to transition to accountable care? Or so large that it takes a tsunami to move you in a different direction? Do you really add value to the community and if so, how? Can you leverage the areas where you add value in a different way - specialty center part of a larger organization, for example?
Is this the conversation your board is having? If not, you might want to move in that direction. Its got to be more pleasant than be questioned about volume!
Monday, March 15, 2010
Business development and strategy
I spoke with a colleague a day ago who has a long track record in strategic planning. He said "I focus on growth, and given the environment no one is focused on growth".
Am I missing something? Everyone I talk to is worried about growing to a size where they can generate enough capital to stay competitive.
Is the focus on going internal on cost instead of growth? Are all your resources going inward? The Louisville Kentucky hospital system that just cut hundreds of positions thinks their 7% volume decline is permanent and recession related. They are taking no chances on a growth strategy but are paring back.
Given the environment of health reform, recession related insurance loss, my friend is probably right. It is time to hunker down, and streamline processes to eliminate cost permanently...not just to wait out the recession. And if by chance you accumulate capital - you may want to consider putting it toward physician integration and a very well defined EHR for your next growth strategy!
Am I missing something? Everyone I talk to is worried about growing to a size where they can generate enough capital to stay competitive.
Is the focus on going internal on cost instead of growth? Are all your resources going inward? The Louisville Kentucky hospital system that just cut hundreds of positions thinks their 7% volume decline is permanent and recession related. They are taking no chances on a growth strategy but are paring back.
Given the environment of health reform, recession related insurance loss, my friend is probably right. It is time to hunker down, and streamline processes to eliminate cost permanently...not just to wait out the recession. And if by chance you accumulate capital - you may want to consider putting it toward physician integration and a very well defined EHR for your next growth strategy!
Saturday, March 6, 2010
Cultcha!
You have definitely heard that "Culture eats strategy for lunch!" Its time to think about culture again because change is what makes culture rear its most resistant head and we are about to head toward a very big change. And everybody needs to be on top of it.
I listened to a physician (radiation oncologist) talk about how well reimbursed radiation therapy is and if hospitals just look at their markets there is huge room to grow. I cringed. All I could think about is what is the cost benefit of that technology and the next newest one and the next newest one. They are phenomenal and will add time for people who are runnning out but what is going to offset that cost. I think the case can be made but it needs to be in the framework of looking at the tradeoffs, what will that patient avoid.
I started thinking about culture in the context of IT strategy and how many are not successful - not well envisioned and not well executed. But the list is long and it is escalating in speed as is all of societal changes: physician practice changes, google-connected consumers, IT changes, readmission oversight, safety. How much effort are you putting into managing the message, the culture, the vision for these changes. Resources upfront will be critical to their success....my sense is that it is not a priority as mounting expense and the recent debt challenges take the front seat. Let me know if I am wrong!
As I read more about EHR implementation and talk to physicians, the keys to success are leadership (clear and well communicated vision) management (precise execution of the solution) and culture management (onboarding, training, process improvement, documentable progress). In the many mergers that I experienced, these are the continuous thread. Don't think you are buying software, you are merging a new culture into your established one. Evaluate the fit.
I listened to a physician (radiation oncologist) talk about how well reimbursed radiation therapy is and if hospitals just look at their markets there is huge room to grow. I cringed. All I could think about is what is the cost benefit of that technology and the next newest one and the next newest one. They are phenomenal and will add time for people who are runnning out but what is going to offset that cost. I think the case can be made but it needs to be in the framework of looking at the tradeoffs, what will that patient avoid.
I started thinking about culture in the context of IT strategy and how many are not successful - not well envisioned and not well executed. But the list is long and it is escalating in speed as is all of societal changes: physician practice changes, google-connected consumers, IT changes, readmission oversight, safety. How much effort are you putting into managing the message, the culture, the vision for these changes. Resources upfront will be critical to their success....my sense is that it is not a priority as mounting expense and the recent debt challenges take the front seat. Let me know if I am wrong!
As I read more about EHR implementation and talk to physicians, the keys to success are leadership (clear and well communicated vision) management (precise execution of the solution) and culture management (onboarding, training, process improvement, documentable progress). In the many mergers that I experienced, these are the continuous thread. Don't think you are buying software, you are merging a new culture into your established one. Evaluate the fit.
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