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MedPAC Sinks Deeper Into the MACRA Tar Pit

The Healthcare Blog - Fri, 10/20/2017 - 13:01

The Medicare Payment Advisory Commission (MedPAC) has done it again. At their October 4, 2017 meeting they agreed to repeal the Merit-based Incentive Payment System (MIPS), an insanely complex and evidence-free pay-for-performance scheme within the larger program known as MACRA. Instead of examining how they made such a serious mistake in the first place (MedPAC has long supported turning fee-for-service Medicare into a giant pay-for-performance scheme), they repeated their original mistake –- they adopted yet another vague, complex, evidence-free proposal to replace MIPS.

MedPAC’s history gives us every reason to believe that when they discuss their “repeal and replace MIPS” proposal at their December 2017 and January 2018 meetings, they will refuse to discuss their “replace” proposal in any detail; they will not ask for evidence indicating their proposal is safe and effective; and in their March 2018 report to Congress they will foist upon CMS the dirty work of figuring out how to make their lead balloon fly. CMS will dutifully write up a gazillion pages of gibberish describing how the new program is supposed to work, it won’t work, MedPAC will return to the scene of the crime years later and, pretending they had no part in creating it, propose yet another evidence-free tweak. And so on.

MedPAC is caught in a trap of their own making. They endorse health policy fads without any evidence and without thinking through the details; then when the fads don’t work, rather than review their defective thought process, they endorse other iterations of the fads, again without evidence and without thinking through the details. The tweaked version of the fad fails, and MedPAC starts the cycle all over again. Two analogies for this trap or vicious cycle occur to me. One is the tar pit where mastodons got stuck and died; struggle only caused the dimwitted creatures to sink faster. The other is the hedge fund that gradually becomes a Ponzi scheme. Investors like Bernie Madoff make bad investments, and when the investments go south, instead of admitting their mistakes, they induce their investors to throw good money after bad.

In this comment I will explain why MedPAC’s MIPS-repeal-and-replace scheme deserves ridicule. In my next comment I will describe the process by which MedPAC built the MACRA tar pit or, if you like, the intellectual Ponzi scheme, that now traps them.

Excellent diagnosis

The October 4 meeting opened with a statement by MedPAC staffer David Glass about why MIPS was bound to fail. The staff’s most fundamental objection to MIPS is that it’s not possible to measure accurately the “merit” or “total performance” (to use MACRA’s goofball language) of individual doctors. They cited several reasons for this, including: Small sample size; the freedom CMS gives to doctors to select their own “quality” measures from a list of “around 300” (page 5 of the transcript of the meeting ), which guarantees apples are not being compared to apples; and the poor correlation between most of these “quality” measures and, um, quality.

Oddly, Glass’s otherwise thorough critique of MIPS failed to mention the attribution problem. In order to measure physician “value” or “merit,” one must first decide which patients “belong” to which doctor. The MACRA statute instructs CMS to follow a bizarre attribution scheme based on whether the doctor was the “lead” doctor or a “supportive” doctor, and whether the condition was acute or long-term (see my discussion of this section of MACRA here). Understandably, CMS totally ignored these instructions and adopted a slightly less bizarre method of attribution: Medicare beneficiaries are attributed to doctors based on the plurality of primary-care services provided. This plurality method guarantees that doctors are rewarded and punished for patients they never see or, in the case of patients they do see, for treatment decisions made by other doctors. The attribution problem by itself guaranteed MIPS would be difficult to administer and that MIPS scores would be useless or at best difficult to interpret.

Despite overlooking the attribution problem, MedPAC’s staff reached the right conclusion: MIPS’ grading system is useless, both to physicians and to patients. As Glass put it, “[I]t is extremely unlikely that clinicians will understand their score, or what they need to do to improve it” (p. 7). The staff noted in addition how costly MIPS is to physicians. “CMS estimates that the clinician cost to comply with MIPS in the first year of the program is over $1 billion,” reported Glass (p. 6). Glass offered no information what it costs CMS to administer MIPS.

Evidence-free cure

This would have been an ideal time for the staff and commissioners to stop, take a deep breath and ask, “How the hell did we fool ourselves into recommending a whacky pay-for-performance scheme to Congress, and why did it take us two-and-a-half years after MACRA was enacted to admit MIPS can’t work?” Or even: “How could we have done a better job of warning Congress not to pass such a useless bill?” That, of course, is not what happened. There would be no looking back to learn from history.

When Glass was done explaining why MIPS was a disaster in need of repeal, his colleague Kate Bloniarz presented two vague entities that might replace MIPS. Bloniarz and the other staff did not refer to these options as ACOs (they called them “groups”), but I will because they walk and quack like ACOs. The two options were: “Virtual” ACOs that doctors (with gobs of free time on their hands) will start up and “voluntarily” join; and geography-based ACOs that CMS will force upon all the retrograde physicians who refuse to move into “virtual” or existing Medicare ACOs (or other MACRA “alternative payment models”). The only information Bloniarz offered about these entities was that they had to be “sufficiently large to have statistically detectable performance on population-based measures” (p. 12) such as use of “low-value” services, “healthy days at home,” and the ever-popular “potentially preventable admissions” and a cost measure (“relative resource use”), all poorly adjusted for factors outside provider control. Doctors will, allegedly, be inclined to join some flavor of ACO –- virtual, geographic, or existing –- and be rewarded and punished for “performance” on “population measures” because, according to the staff’s proposal, if they don’t they will lose 2 percent of their Medicare FFS payments.

The one feature of Bloniarz’s vague proposal worth praising was the removal of the expensive MIPS reporting requirements. Bloniarz proposed that CMS calculate grades on the “population measures” using claims data only, that is, data doctors are already reporting.

If you were a commissioner and you had been exposed to Bloniarz’s annoyingly vague MIPS replacement proposal, what questions would have occurred to you? You’d want to know, among other things:

  • What the staff meant by “sufficiently large;”
  • how Medicare beneficiaries would be assigned to the new ACOs;
  • whether it’s possible for CMS to risk-adjust accurately the quality and cost scores and, if not, whether ACOs would avoid inviting doctors with sicker and poorer patients to join them;
  • whether ACOs of any stripe (existing, virtual, or geographically defined) will be available to all doctors;
  • whether doctors in any ACOs, but especially the “virtual” and geographically-based types, would have any way of influencing each other or knowing why their group was being punished or rewarded; and
  • whether ACOs anywhere are making enough money to at least offset the expenses of starting and running an ACO so that doctors would have some incentive to join.

With the exception of the attribution question, the commissioners as a group did a good job of posing every important question a rational person would think to ask. (Sloppy attribution is an obstacle to accurate measurement of physician “merit” at both the individual physician level and the ACO or group level.) But, sad to say, not one of those questions was answered by the staff or Chairman Crosson. The staff and Crosson either remained silent, or offered non-answers. To impress upon you how poorly prepared the staff was to defend their vague, Rube Goldberg proposal, I’ll use the rest of this comment to illustrate the non-productive, one-sided conversation between commissioners and staff.

Ask and you shall not receive

The commissioners who spoke first focused on whether it is reasonable to expect that ACOs in any of the three flavors will be available for all doctors to join. The importance of this question is obvious: If doctors are going to be robbed of 2 percent of their Medicare payments for not joining an ACO, they should at least have the opportunity to join one. These commissioners noted that the problem of ACO accessibility is two-fold: ACOs are not available everywhere, and many existing ACOs will want to avoid clinics and hospitals that serve poorer, sicker and more expensive people, such as clinics in rural areas and doctors who specialize in treatment of addiction. All the staff could say was that CMS might be able to create a “fall back option” for clinics and hospitals in rural or poor areas. (Note the staff did not say, “Excellent question, WE will figure out a good answer and not ask CMS to do the dirty work we refuse to do.”)

Commissioner Kathy Buto asked about “isolated providers” who might find it difficult to form groups large enough to create pools of patients large enough for statistical accuracy and, if in the event that large numbers of isolated providers could be herded into one ACO, whether they would feel they had any input into or control over the ACO’s decisions (pp. 18-19). All Glass could say is those problems afflict all ACOs. Commissioner Dana Gelb Safran asked, “[A]re we creating a kind of mini-version of the problem we had with the SGR where individuals really aren’t accountable to each other, even though they are grouped together…?” (p. 58) No one answered her.

Commissioner David Nerenz asked how big an ACO’s pool of attributed patients would have to be to make “population measures” accurate (by MedPAC’s low standards, I would have added). Bloniarz answered 1,000 to 10,000 depending on the “measure.” When Nerenz asked how it would be possible to apply a common set of measures to all ACOs if some didn’t have big enough patient pools for all measures, Bloniarz had no answer. When Nerenz rephrased his question to ask how many doctors an ACO would have to have, Glass replied, “It’s hard to say.”(pp. 20-22) When Nerenz asked how the staff proposed to weight the half-dozen “quality” measures and the cost measure prior to deriving an arbitrary “composite” score, Bloniarz excused the staff’s inability to answer on the ground that their proposal is “a bit exploratory.”

When Commissioner Pat Wang asked the only question any commissioner raised about attribution, staff dodged again. Wang asked if attribution would be prospective (meaning ACOs know in advance which patients are “theirs”) or retrospective (ACOs don’t find out till the end of the performance year who “their” patients were). Bloniarz replied, “I don’t think we have weighed in on [that issue].” “I don’t think we had a reaction to that,” added Director Mark Miller helpfully. (pp. 24-25)

When Commissioner David Grabowski asked what would happen to providers who take care of a disproportionate number of dual eligibles, Bloniarz replied, “I don’t think we have a great answer for that,” and then added wistfully, “[T]here would be risk adjustment,” as if CMS’s grossly inaccurate risk-adjustment method would solve the problem. (p. 29) Grabowski seemed dissatisfied. “If you don’t get the risk adjustment right …, you’re going to magnify disparities,” he replied. “You’re going to widen that gulf between the haves and the have nots.” (p. 31) Staff had no further comment.

Nerenz also warned that inaccurate risk adjustment put the poor and the sick at risk. He urged the commission to adopt criteria for the “quality” and cost measures that would guarantee they can measure quality and cost accurately. Nerenz quoted an article from BMJ that found that failure to adjust readmission rates for socio-economic factors punished hospitals in poorer regions. He warned that if the staff’s proposal was “rolled out” today it would “exacerbate socio-economic disparities.” (p. 72) Nerenz also cited a paper that found that quality of care is better in small clinics than in large networks, and yet the staff’s proposal will encourage further consolidation of the medical sector into large groups. The only reply Nerenz got was a “thank you for that” from Crosson and an “amen” from Commissioner Coombs.

Commissioners Safran and Craig Sammitt asked how the virtual and geographic ACOs would differ from existing ACOs. Neither Crosson nor staff answered.

Summarizing the unintelligible

At the end of the MIPS segment of the October 4 meeting, Chairman Crosson attempted to summarize the unproductive conversation that he and his staff had forced upon the commissioners. He began by saying “I’m going to try to summarize where I think we are. (p. 83) ….We have very close to consensus that MIPS should be repealed.” After that, his ability to construct complete, meaningful sentences deteriorated rapidly. I quote him at length so you can see for yourself what I mean: “I think we have consensus that it would be good to advance population health as the basis for accountability. [84] …. Where we had a difference was like how to do that –- well, I guess, whether we can do that at all with a replacement which would be the – – well, let’s just replace MIPS –- I mean let’s just eliminate MIPS and leave nothing with respect to measuring accountability for cost and quality in that practice environment. I think my notion was that we could take that direction, but we ought to try, before we do that, to think through whether or not there are some ideas that we could put forward which would — I guess I ‘m not sure I like the term ‘replacement of MIPS’ but to substitute something ….” (p. 85)

Will the other 16 commissioners insist on answers to their questions before they authorize the staff to write up some vacuous version of the staff’s MIPS replacement proposal and send it over to Congress? Don’t bet on it. The commission has caved into their staff and chairman repeatedly throughout its history. The commissioners are capable of asking obvious questions about the half-baked proposals their staff and chairman cook up, but they have never shown an ability to force the chairman and staff either to clarify a proposal and cite evidence for it, or to throw it away.

In my next comment I will explore the history of this habitual failure. I will focus on the commission’s endorsement of pay-for-performance in 2003 and how that endorsement led the commission into the MACRA tar pit.

Categories: OIG Advisory Opinions

Do Doctors Deserve Mercy?

The Healthcare Blog - Thu, 10/19/2017 - 15:09

This past week a video went viral when a woman complained about the lengthy wait time at a clinic.  On video, we see the physician asks if the patient still wants to be seen.  The patient declines to be seen, yet complains patients should be informed they will not be seen in a timely manner.  The frustrated physician replies, “Then fine…Get the hell out. Get your money and get the hell out.”  While we do not witness events leading up to the argument between doctor and patient, we do know staff at the front desk called the police due to threats made by the patient to others. 

Based on the statement released by Peter Gallogly, MD, he is a humble, thoughtful, and compassionate physician who was very concerned for the safety of his staff, which he considers “family.”  Physicians like Dr. Gallogly do their best to serve patients, ease their suffering, and avoid losing ourselves to burnout at the same time. Every human being deserves our compassion, kindness, and clemency.  Patients and physicians must accommodate each other when possible.

Do physicians actually deserve our mercy when necessary?  Yes, they do.  I should know.  The kindness shown to me by my patients over the past month has been unparalleled, leaving this physician thankful beyond words. 

My father has been a practicing pediatrician in our community for 47 years.  As I type these words, he is dying in a hospital bed.  We have worked side by side for the last 16 years.  It is difficult to make it through the day, desperately hoping to hear his voice one last time in the clinic hallway.  He was carrying a full patient load before an unexpected cardiac arrest ended his career.  The patient load doubled overnight; it is a burden I am carrying alone.

Many families have brought their children, grandchildren, and great-grandchildren to us for more than 40 years.   We have seen them through the darkest moments of their lives, at their most vulnerable, and brought them into the light.  Now, our patients must guide me through unimaginable heartache and grief. 

Long wait times can be terribly frustrating.  Punctuality has long been a personal obsession. Lately, I have been unable to keep up; patients with appointments are waiting more than two hours to be seen.  Every new encounter begins with an apology for tardiness followed by an update on the condition of my father.  Most families are aware of my overwhelming task — running a practice built for two when I am but one physician.  Not a single parent or child has complained, yelled, accosted, or threatened.  Each family has shown me desperately needed mercy. 

Over the last twenty-one days, patients have provided 15 home-cooked meals.  Some have assisted by car-pooling my children or taking care of them when my presence at a last minute hospital care coordination meeting was required.  Others have simply offered a helping hand, by filing charts, running errands, or landscaping the grounds.  This is the physician-patient relationship as it was meant to be, simple, beautiful, and perfect. 

Yesterday, after apologizing yet again, a mother reassured me she would wait as long as it took to have her child seen, hugged me tightly, told me to take a deep breath, and offered me her chair to rest.  She reminded me to take care of myself.  In the next room was a grandmother who has been patronizing our practice since 1977, when I was barely three years old.  She offered billing services free of charge and emphasized how grateful she was for the loving care provided for two generations to her family. 

The clinic my father established is a place where mutual admiration between physician and patient has existed seamlessly for a half century.  Magic happens when patients walk through our doors.  The next time your physician is running late, consider the challenges they might have faced that day.  Accommodating their delay will be treasured more than you can possibly imagine.

Medicine is not a hospitality industry.  Patients are not customers and physicians are not restaurant wait staff.  We gave up our youth to become educated, skilled, and compassionate.  Saving the life of human beings is not equivalent to ordering a hamburger and having it served your way.  Physicians genuinely work hard to serve patients at their most desperate hour.  Remember, we are also human beings, who unequivocally need and deserve your mercy.      

Categories: OIG Advisory Opinions

Could OpenNotes Transform the Analytics Marketplace?

The Healthcare Blog - Wed, 10/18/2017 - 14:17

Could OpenNotes help push predictive analytics from paternalism to partnership?

As new payment incentives make it profitable to prevent illness as well as treat it, new technology is offering the tantalizing prospect of accurately targeting pre-emptive interventions.

At the recent Health 2.0 Annual Fall Conference, for example, companies like Cardinal Analytx Solutions and Base Health spoke of using machine learning to find those individuals among a client’s population who haven’t yet been expensively sick, but are likely to be so soon. Companies seeking to make that information actionable touted their use of behavioral theory to “optimize patient motivation and engagement” via bots, texting and other technological tools.

Being able to stave off a significant amount of sickness would constitute extraordinary medical progress. Along the way, however, there’s a danger that an allegiance to algorithms will reinforce a paternalism we’ve only recently begun to shed. A thin line can separate engagement from enforcement, motivation from manipulation, and, sometimes, “This is for your own good” from “This is for my bottom line.” It is here where OpenNotes could play a critical role.

In a recent article for The BMJ, I proposed a concept called “collaborative health” to describe a shifting constellation of relationships for maintaining wellbeing and for sickness care. Shaped by each individual’s life circumstances, these will sometimes involve the traditional care system, as “patient-centered care” does, but not always.

Algorithmic alerts may go directly to a vendor’s employed nurse, for example, and not be automatically shared with a primary care physician. Doctors, I suggested, can retain their role as patients’ trusted allies only if they embrace shared information, shared engagement and shared accountability.

Shared information in the form of OpenNotes could well be the most important step towards establishing a balance of informational power. With access to complete electronic information from any and all entities involved in care management, individuals can judge for themselves whether “engagement” is mutual or just marketing. They can also start to make accountability a two-way street.

Appropriately using information to support clinicians and citizens alike in the search for better health “is one of the most important responsibilities and opportunities we have,” Hal Wolf, about to become HIMSS’s new chief executive officer, told the Health 2.0 meeting. That’s a noble sentiment, but corporate entities like health plans and tech companies are unlikely to lead the way.

Modeling a relationship of transparency and trust is first and foremost a physician obligation. The collaborative health pillars of shared information, engagement and accountability symbolize a commitment to ensuring that digital health’s potentially transformational improvements in wellbeing and sickness care never weaken the foundational bond of patient trust. Physicians must lead so that accreditors, regulators and ethically responsible corporate entities will follow.

Michael L. Millenson, President of Health Quality Advisors, LLC, is a nationally recognized expert on making American health care better, safer and more patient-centered. Follow him on Twitter at @MLMillenson.

Categories: OIG Advisory Opinions

EHR-Driven Medical Error: The Unknown and the Unknowable

The Healthcare Blog - Tue, 10/17/2017 - 18:49

Politico’s Arthur Allen has written a useful report on recent findings about EHR-related errors. We must keep in mind, however, that almost all EHR-related errors are unknown, and often unknowable. Why?

  1. The most common errors involved with EHRs are medication prescribing errors. But we seldom find those errors because those type of errors seldom manifest themselves because so many hospitalized patients are old and sick, have several co-morbidities and are taking many other medications. Key organs, like the liver, kidney and heart, are compromised. Bad things can happen to these patients even when we do everything right; conversely, good things can happen even when we do much wrong. We usually miss the results of, say, a wrongly prescribed medication. (Note: these types of ‘missed’ medication errors contrast to leaving a pair of hemostats in the gut or to wrong-site surgery—where most errors soon become obvious).
  2. As the experts referenced (Dr. Bob Wachter, Dean Sittig and Hardeep Singh) noted, very, very few cases make it to litigation, further reducing the numbers examined in the study discussed.
  3. Perhaps worse, few clinicians want to report problems even if they know about them. This is a litigious society and few medical professionals want to spend time in court. Also, as the authors Allen interviewed (all of them my friends and respected colleagues): some of the errors that were known did not result in harm and many were caught by others or by the professional involved in the error before they harmed.


In one of my papers we studied all medication orders stopped by the prescriber within 45 minutes. It emerged that 2/3rds of those orders were either wrong or at least suboptimal. To my knowledge, however, not a single one of those errors was reported as an error (or near miss). More, if the patient already received the medication, I also know of no case where the actual error was reported.

  1. The non-disclosure clause in EHR vendors’ contracts prevents clinicians from publicly reporting EHR problems to the public. Yes, they can report errors to the vendor, to the FDA, and to a patient safety officer. But if they took a screen shot of a dangerous or deceptive EHR screen and published that to their colleagues or to the web, they could be sued for millions. Moreover, the “hold harmless” clause in those contracts means that vendors are not responsible for errors—even if 2000 doctors have reported them. Of course vendors don’t wish to harm patients and make corrections, but they have not removed those two clause in the 9 years since I exposed them in an article in JAMA.
  2. EHRs are very difficult to use, and not all of the problems are due to lousy programming by the vendors. The systems must interact with hundreds of other IT systems that are constantly changing. Also there are always new environments, e.g., patients with differing diseases, new clinicians with different training, new equipment, and new requirements. New medications and new disease protocols require constant updating. The quality of the implementation teams differ, as do the institutions’ experience with technology.

All of that said, EHRs suffer from significant usability challenges, e.g.,

  • Confusing presentations of patients’ data and general poor usability
  • Drop-down lists that continue to several screens (with the existence of the extended often hidden from the clinician)
  • Pop-ups that hide medication or problem lists
  • Medication lists and problem lists that can’t be seen when ordering medications
  • Lab reports presented in erratic or absurd formats and sequences
  • Herds of decision support alerts that obscure the screen
  • Data that should be contiguous separated by three screens and multiple clicks
  • Critical information on the patient is lost because of proprietary EHR software, idiosyncratic device data formats, and refusal to accept data standards, and
  • Lack of true interoperability.
  1. As with any complex software system, one is often not sure if the user is the source of the problem. Did I fail to read a recent update memo? Did the hospital IT department make a change? Did the vendor make a change? Did another colleague alter the patient’s record in some way? Did a diagnosis change and thus the patient is re-classified in some way? Is there a bug? Did I put in the right combinations of passwords? Am I authorized to use this computer on this floor for these types of patients? Like all of us with very complex software, even physicians can feel like sinners in the hands of a capricious god. Few rush to report a “problem” that may be uncertain, due to something or someone else, and may well not even be a problem.
  2. As the piece by Allen also notes, the ONCs effort to construct a patient safety reporting system has been consistently refused by congress and the administration. Even if a clinician knows about a problem, there is no single place that systematically collects them.

In sum, we know just a tiny fraction of errors associated with EHRs. This report, while most welcome, does not reflect the tip of the iceberg. More, it’s a scratch on the tip of the iceberg.

NOTE: parts of this text are taken from some of my previous publications.

 

Ross Koppel, Ph.D. FACMI, UNIV. OF PENNSYLVANIA

Senior Fellow, Wharton’s Leonard Davis Institute of Healthcare Economics;

Senior Fellow, Center for Public Health Initiatives, Perelman Sch of Medicine;

Adjunct Professor (full) Sociology Department;

Principal Investigator and Affil Prof of Medicine, Perelman School of Medicine;

Senior Investigator, School of Engineering and Applied Sciences

Also:  Chair, Clinical Information systems, AMIA; & Research Prof. Biomedical Informatics, SUNY@Buffalo

 

 

Categories: OIG Advisory Opinions

Valuing Value-Based Payment

The Healthcare Blog - Mon, 10/16/2017 - 09:51

The idea that payment should be linked to the value lies at the heart of most of the transactions we participate in on a daily basis. Yet, value based payment in healthcare has seemingly run into very rocky waters as of late.  It is at this precarious time that stakeholders representing large employers and other purchasers of health care’ took to the Harvard Business Review to write in defense of value based payment reform.  The authors pepper their article with cherry picked ‘successes’ of the value movement and urge the country to forge ahead on the current path.  The picture that comes to my mind hearing this is of the Titanic, forging ahead in dark waters, never mind the warning signs that abound.

One of the authors of the paper – Leah Binder – is President and CEO of the Leapfrog Group – a nonprofit organization founded in 2000 dedicated to triggering ” giant leaps forward in the safety, quality and affordability of U.S. health care by using transparency to support informed health care decisions and promote high-value care”.  This is a laudable goal, but it is very much predicated on the ability to measure value.  A perusal of the Leapfrog group’s  homepage notes a 1000 people will die today of a preventable hospital error.

The warning is explicit – choosing the hospital you go to could be the difference between life or death.  I have spent some time in the past about the remarkably weak data that lead to an estimate of 400,000 patients dying per year in hospitals due to medical errors, but suffice it to say the leapfrog group subscribes to the theory that of the ~700,000 deaths that happen in hospitals per year, half are iatrogenic.  With no exaggeration, I can say firmly that those who believe this are in the same company as those who believe the earth is flat.  If the home page of the Leapfrog group, examination of their claims in their HBR article merits additional concern.

The first example proferred relates to a reduction in venous thromboembolism or blood clots acquired in hospitals after a government agency (AHRQ) began tracking this from 28,000 in 2010 to 16,000 in 2014.  Binder et al., note that this means 12,000 fewer patients had ‘potentially fatal blood clots’.  Ostensibly this reduction in clots was due to reporting of these events and a Bush era rule from 2008 that put hospitals on notice that Medicare would no longer be paying for Hospital acquired Conditions (HAC) like clots after joint surgery.  But how exactly did hospitals achieve these impressive results?  While the hope is that hospitals achieved these reduction by better attention to therapies that prevent blood clots, the reality is somewhat more complicated.

For starters, orthopedic surgeons grew wary of searching for blood clots postoperatively.  The surgeons weren’t necessarily wrong to adopt a newly parsimonious approach.  Easy access to ultrasounds and cat scans meant many patients ended up diagnosed with small clots in the calf or in the small arteries of the lung that were unlikely to cause the patient harm.  It was not lost on surgeons that these clots were unlikely to be fatal to the patient, but were potentially fatal to the hospital and surgeon’s bottom line.

Yet another way of reducing hospital acquired conditions is to improve the diagnosis of blood clots that patients carry with them on admission.  It is clearly unfair to penalize hospitals for patients who present with a blood clot, so improving the diagnosis of these patients is important.  Unfortunately, too much of a good thing is usually too much of a good thing.  Some institutions actually began performing screening whole leg ultrasounds on all inpatients being admitted.  The whole leg is important because asymptomatic blood clots that do develop below the knee are generally not high risk , and indeed, many may resolve spontaneously with no treatment.  Worst of all the diagnostic accuracy of ultrasound falls precipitously as veins get smaller in the lower leg.  In 160 medical inpatients who had an ultrasound and a gold standard venogram, the positive predictive value of an ultrasound for a lower leg/calf/distal vein clot was 50%.  To reiterate – a positive result on a leg ultrasound has a flip of a coin’s chance of being correct, but it does allow the hospital to document a clot in the leg vein (also known as a Deep Vein thrombus (DVT)) as present on admission, and make any actually clinically meaningful DVT that subsequently develops not count towards the all important hospital acquired numbers.  The added benefit of documenting more DVTs in your medical inpatients (as opposed to the post-orthopedic surgical patients) is that it makes patients appear sicker.  This matters because another metric- the all important US News World Report rankings – are based on the difference between hospital expected and observed mortality.  The higher your expected mortality, the better.

It is not even clear that the numbers, if accurate, would tell the whole story regardless.  Consider the feared complication of DVT is a clot that spreads from the leg veins to the heart and causes death – a pulmonary embolism.  As far as I can tell, this information is not being publicly reported, but data for the incidence of pulmonary embolism is available from administrative claims data.  One would think that the reduction of DVTs should have lead to fewer PEs being diagnosed.  Unfortunately, very little in health care is predictable or intuited.   The incidence of PE’s has actually dramatically increased since 1998.  Our ability to find clots in the lung dramatically improved in 1998 with the introduction of MultiDetector Computed Tomography.  This would be ok if finding more PEs results in improved patient outcomes, but it has decidedly not.  Mortality from PE is stubbornly unchanged from prior to 1998 to now, ostensibly because we simply got better at diagnosing PEs that were never going to bother the patient.

The point of this long discussion on the blood clot example Binder et al raised is to demonstrate the absolute utter meaninglessness of the metrics highlighted as an example of success.  I am relatively certain we can ‘fix’ the overdiagnosis of PE problem by publicly reporting PE data.  I am sure the hospital/physician administrator class will respond with some non-granular edict that will strip the physicians ability to order an MDCT for PE.  As history would suggest, fewer unneeded CTs will be done, but fewer needed CTs will be done as well.  Medicine used to advance organically from the bottom up by education and discussion informed by data.  50% fewer coronary stents are placed in the elective setting over the last decade not because of public reporting or leapfrog, but because the data brought the frequent practice by cardiologists into question.

Binder et. al go on to highlight the benefits of transparency in improving outcomes in New York state patients undergoing cardiac surgery.  Apparently, public reporting of outcomes in cardiac surgery patients in New York lead to advances in cardiac care that saved lives.  Its a remarkable statement because there is ample data to suggest that lower mortality with public reporting in this setting related to lower surgical volume driven by a fear of operating on sicker patients.

One is left to contemplate the credentials of these arbiters of value in health care.  How can we possibly evaluate those who have anointed themselves as gods of value?  Data is no longer sufficient to rebut the movement because the data no longer fits the narrative.  It should be somewhat discomforting that this chart depicting the United States as outlier when it comes to dollars spent for life expectancy achieved is essentially unchanged since the Leapfrog group came into being in 2000.

The value based movement as currently envisioned has failed.  Apparently, a maze of third party payers and third party consultants don’t actually make healthcare better or less expensive.

The authors seem to understand the weakness of their arguments by ending their article with a warning about returning to the fee for service that brought us to the abyss.   Fee for service is the culprit that has produced ‘waste, heavy cost, and quality of care issues’, after all.  This is all true, but do the authors really believe that the fee-for-service system that existed brought no good with it?  It is certainly true that the last half century produced a  health care system emerged that was incentivized to treat patients.  Great waste arose as a result.  But this is the same health care system that finances cardiologists on call to open up your blocked artery within 90 minutes of where you currently sit.  It is also the same system that refused to give up on rare, fatal diseases in children when other systems have.  It should be lost on no-one that the value based movement has morphed into a tool to strong arm physicians into giving up on those it is cost inefficient to treat.  Burned by the managed care experience, third party payers have found a way to make physicians the deniers of care – employ the vast majority of physicians, and tie financial reimbursement to value based outcomes that incentivize doing less regardless of patient need.  A generation of physicians now emerges with an allegiance to populations and health systems, so it is no surprise that a good physician today is one who can provide a disney land experience to the consumer, all the while keeping length of stay in hospitals low, while documenting all possible diagnoses in EPIC to maximize patient expected mortality and maximize billing.

The best thing a customer with a sick heart who made the mistake of being admitted to the hospital with heart failure can do in 2017 is die.  Mounting evidence recently lead to leading heart failure physicians to write emphatically that hospital readmission reduction program is associated with fewer readmissions and more deaths.

Waste may abound in our current health care system, but the strategy employed by the value based seers exacts a heavy penalty on our sickest and most vulnerable.  Ideologues should consider that we indeed do have a health care system that resulted in too many heart transplants, but is it really better to live in a world where deserving patients don’t get a heart transplant?

This does not mean to say that massive waste does not exist in our health care system.  As an example: Hospitals have become massively bloated entities that innovate by hiring patient experience officers, giving patients ipads, paying hundreds of million dollars for EHRs that make physicians less productive, and hiring an army of hospitalists to check boxes and reduce length of stay.  I do mean to say that the current plan to give the nations dollars to insurance companies, health care consultants, and non-clinician administrators and expect an intelligent path forward is improbable.

A more honest path appears courtesy of true mavericks like the founders of the Surgical center of Oklahoma that accepts no third party payments but delivers care for elective surgeries at massive discounts relative to regular hospital systems.  Any surgical complications are covered free of charge.  Patients traveling from a distance have their airfare paid for and are put up in a hotel.  Sounds like patient, centric value based care to me.  How could this possibly happen without the Leapfrog group being involved?

I realize that the Surgical center of Oklahoma does not have to keep an ER open 24/7, and doesn’t have to pay for interventional cardiologists to be available constantly, but there is ample evidence to suggest the dollars being spent in hospitals are being spent on a variety of goods that have nothing to do with patient health.

Is it a pipe dream to believe that in the wealthiest country on earth we can have a robust private system that can deliver us CAT scans for $400 and still manage to provide a support system for those financially destitute?  We currently find ourselves hostage to a health care system that has convinced us that health care is unaffordable, and that keeping the lights on in your local hospital requires being paid $50 for an ECG.  The solution has been to create a whole bureaucracy of measurers that have just as much expertise at valuing Big Macs as they do healthcare.  The evidence we didn’t need to generate now tells us we don’t measure value well, and it has not resulted in a net reduction in cost or any significant increase in real value delivered.

I would suggest we refocus on the problem at hand.  We can start by labeling the current value based movement with the cliched yet appropriate moniker: #FakeNews

Anish Koka is a cardiologist based in Pennsylvania 

Categories: OIG Advisory Opinions

Trump Thinks He Just Blew Up Obamacare With a Stroke of the Pen. Did He?

The Healthcare Blog - Sat, 10/14/2017 - 13:45

If you had illusions, or hopes, that the “Kill Obamacare” reality show starring Donald Trump would settle down to a dull roar, events of the last few days should blow those illusions out of the water.

You’ve heard the news by now and I won’t repeat it here.   In addition to your favorite media outlets, see this analysis by ACA legal expert Tim Jost.

Trump has been true to his word and his warnings of the last few months—that if Congress didn’t repeal and replace the Affordable Care Act he’d resort to regulatory and executive branch action.

The words of the day (Friday, Oct. 13) are “sabotage” and “spiteful.” And I agree. But I’ll be curious to hear THCB readers’ views on these extraordinary actions by the President. Bear in mind that every independent analysis of the elimination of the CSR (cost-sharing reduction) payments and reviving long-dead association health plans indicates:

  • Both will significantly undermine the stability of the exchanges—by eroding the participation of insurers, the affordability of coverage and enrollment.
  • Association health plans will siphon off the young and health and people at low risk, undermine coverage standards, and serve consumers poorly as they have in the past. (Notably, though, the rebirth of association health plans is not imminent. Trump’s executive order requires the Labor Dept., HHS and others to issue new rules, which could take up to a year).
  • The elimination of the CSR payments will cost taxpayers a projected $194 billion in additional tax credits/premium subsidies over the next decade—because insurers will raise premiums 10% to 20% to make-up for the loss of the CSR payments. That’s according to CBO but the projection assumes, of course, that the exchanges don’t implode.

As Vox’s Sarah Kliff put it: Trump is seeking to enact a policy where the government spends billions more to insure fewer people!

The administration’s argument that it had no choice but to cancel the CSR payments for legal reasons is dubious at best. They’ll be vigorous debate on this point in the coming weeks.   And the issue is indeed complex in the context of an unprecedented lawsuit filed in 2014 by House Republicans against the Obama Administration. The suit claimed that Congress never appropriated funds for the payments. (The CSR expenditure is projected at $8 billion this year rising to $9 to $10 billion in 2018; an estimated 7 million low people benefited.)

Says Jost: “In fact, the ACA requires the federal government to reimburse insurers for these [cost-sharing] reductions. This is not a bailout. It is rather a statutory obligation of the federal government to pay insurers for services they have provided as required by law.”

Moreover, the suit was still pending after:

(a) A D.C. district court judge accepted the House Republican’s argument in the spring of 2016 but stayed her order after the Obama administration appealed, arguing forcefully (with DOJ lawyers in the lead) that there was in fact an appropriation.

(b) The Trump administration never took a position on whether there was an appropriation or not until Thursday, and had agreed to abide by the stay several times and find the payments.

(c) The D.C. Circuit Court of Appeals in August allowed 19 state attorneys general to intervene to retain the CSR payments as an essential protection for their citizens. One health lawyer, Nicholas Bagley argues that the judgment allowing the states to intervene actually technically blocks the Trump administration from unilaterally dismissing the appeal.

However, while Bagley agrees with Jost that there’s a regulation on the books that requires the CSR payments be made, he wrote in August that the Trump administration and Justice Department “could simply announce that, after a thorough review, the Justice Department has concluded that no appropriation exists to continue making the payments.”

That appears to be the avenue the Trump White House has taken.

In quick action—having anticipated Trump’s move—Democratic attorneys general from the 18 states and the District of Columbia filed a lawsuit in federal court in California late Friday. (The states are: California, Connecticut, Delaware, Kentucky, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington.)

The states seek to force the Trump administration to make the next round of monthly CSR payments, which are scheduled for Wed. Oct 18.

“His effort to gut these subsidies with no warning or even a plan to contain the fallout is breathtakingly reckless,” New York Attorney General Eric Schneiderman told The Huffington Post on Friday. “This is an effort simply to blow up the system.”

Notably, the new lawsuit is separate from a case pending before the D.C. appeals court in which Democratic attorneys general are defending the legality of the payments.

How the California court will react is unknown. Proving immediate harm to consumers would seem easy.  But the administration could win on the technical legal merits.   The Court could uphold Trump’s action and rule that Congress must now authorize the payments.

What about Congress?

A bipartisan effort is underway in the Senate health committee that has revolved around a deal to fund the CSR payments for two years (what the Democrats want) in exchange for giving states greater flexibility to end-run parts of the ACA and experiment with coverage options (what the Republicans want).

Trump has played a bizarre cat and mouse game over the ACA with both Republicans and Democrats in the past three months—tweet-slamming both. And while he has occasionally has said he wanted to cut a deal with Democrats on health care he has never lent explicit support to the Senate health committee efforts on the CSR payments.

But one interpretation of his action is that it’s intended to gain leverage with Democrats to…..do what?   That’s the problem. The Dems aren’t going to go along with anything resembling repeal and replace; Schumer flatly told Trump that again after an entreaty earlier this month.   But, even so, Trump tweeted on Friday morning, saying to Dems, “Call me.”

One could make a plausible—and perhaps strong—argument, however, that Trump’s actions enhance the chances Congress will act. All Dems and moderate Republicans support the CSR payments.   Maybe Trump knows that, and he plans to take credit for prodding Congress to act in the public interest even as he claims he’s still trying destroy Obamacare.

Still, the legislation being birthed in the Senate—which was stalled during the debate over Graham-Cassidy—is no slam-dunk. The right-wingers in the House see the CSR payments as “insurer bailouts.”

Schumer said late Friday that he was optimism about the chances for a deal with Republicans to continue the subsidy payments.

All of this is taking place less than three weeks before ACA open enrollment begins. Chaos already reigned, and now this. More chaos. But we all know who thrives on chaos, suspense, brinksmanship and drama. Not to mention self-interest and spite. Mr. Make-it-all-Great-Again.

Categories: OIG Advisory Opinions

Six Assertions on Knowing the Unknowable Future of Healthcare

The Healthcare Blog - Fri, 10/13/2017 - 10:54

Some things never change. Joe Flower is one of those things. Pay attention. Joe was the keynote speaker at Health 2.0 Silicon Valley earlier this month. We’re excited to feature the text of his remarks as a post on the blog today.  If you have questions for Joe, you can leave them the comment section. You’ll find a link to a complimentary copy of his report Healthcare 2027: at the end of this post. You should absolutely download and read it. And take notes.

The future. The Future of healthcare. 
Here are the seven words at the core. If you take nothing else away from this, take these:

Everything changes.
Everything is connected.
Pay attention.

— Jane Hirshfield 

We are gathered here on holy ground, in Silicon Valley, the home of the startup, the temple of everything new, of the Brave New World.

And healthcare? Healthcare is changing — consolidation, new technologies, political chaos, a vast and growing IT overburden, shifting rules, ever-rising costs, new solutions, business model experiments.

So when I say, “The Future of Healthcare,”
what are the pictures in your head? Catastrophic system failure? The dawn of a bright new day of better, stronger, cheaper healthcare for everyone, led by tech? Do we have all the confidence of a little girl screaming down a slide? Do we just say in denial about the future and end up in a kind of chaotic muddling along?

In this century business sectors crash, transform, and re-emerge constantly.

  • Most malls in America will close in the next 24 months. Yet retail is thriving.
  • Big bookstore chains are history. Yet more books than ever are being published, printed, bought and read, and new physical bookstores are popping up every day.
  • Digital cameras went from a rounding error in the market in 1999 to destroying the film camera and bankrupting Kodak in six years. Ten years later digital cameras are a niche market, yet the world is flooded with images and video because everyone carries a camera in their smart phone.
  • The Encyclopedia Britannica was printed from 1768 to 2010. Now it’s a website.
  • Cassettes replaced LPs and eight-track tapes in the 1970s, CDs replaced cassettes in the 1990s, and now CDs are history — yet music is more widely shared than ever, music distribution is a thriving business, and LPs are making a comeback. My entire music library is on my phone, but most younger people don’t have a library at all — it’s all streaming music all the time.
  • Oil has dominated our geopolitics and economics for over a century. That will end within 10 years. Cars and trucks with internal combustion engines and human drivers will become relics and specialty vehicles in the same 10 years. Tesla already has a higher market capitalization than Ford.
  • This is normal.The people and organizations running each of those businesses and sectors did not anticipate these vast and deep changes until they happened to them. They did not anticipate:
    • that these changes would happen
    • the speed of the change
    • the shape and elements of the change
    • the second- and third-order effects on their business.

    Healthcare is not exempt. We are today where the film business was in 1999, where the retail mall and internal combustion engine is today. Within 10 years healthcare will be unrecognizable. From treatment modalities and workflow, to business models to technologies, it will not be the same industry it is today. Few of those who run healthcare can even picture that future, let alone plan for it. Yet they must not only plan for it, they must plan for it for their particular organization in their market with their constituencies —and they must plan how to get from here to there, how to keep the machine running even as the environment, the funding and the tools change.

    That’s the reason for what I am announcing today here for the first time. The American Hospital Association is increasingly shifting toward recognizing the need to help healthcare executives understand the future better. I will be launching, with them, a curriculum on how to think like a futurist, how to bring futurism into your organization as a normal ongoing part of management and strategy.

    So today I will make six assertions on knowing the future of healthcare:

    1)We need to know the future of healthcare.It is of existential importance to each of our careers, organizations, and products to figure out the future of healthcare.

    2)We can’t.That’s why it’s called the future. It hasn’t happened yet. Making a prediction or a forecast and getting it right is the booby prize. It’s the participation trophy — unless you really understand why you got it right. If you get it right without understanding, you don’t learn nothin’. The real goal of futurism is not getting it right, it’s insight, understanding how the future works.

    3)We
 must anyway.We have to find ways to say something useful, actionable, practical about the possibilities of the future.
For that, your future casting has to be about

    4) You. It must be localized to your situation, your organization, your product. It has to deal with the fact that healthcare is

    5) Complex. It is a complex adaptive system with many interdependent parts.

    Healthcare is complex. Simple solutions are useless. Any simple picture of the future is a lie. Simple techno-optimism or innovationist neophilia gets us nowhere.

    Thinking about the future is a complex business requiring extraordinary clarity, penetration, the broadest possible view, and the insights of complexity science. Simple futurism is entertainment. Futurism based on the insights of complexity is a tool for thinking, planning, strategizing.

    Simple futurism points at each shiny thing—AI, contractual blockchain, virtual worlds, augmented reality, cell transformation, haptic rebuilds—and says, “Wow! Look at this.” It’s a Jetsons way of looking at the future, as real as using the Flintstones as a guide to the past.

    A futurism based on complexity looks at every element, shiny, dull, or invisible, and asks:

    “What is it for?”
“How does it get its energy?”
“How does it affect other elements?”

    Complex futurism can connect the dots and the 3-D networks of dots building out over time to paint the pictures of future scenarios, of ways the future could really turn out, what will take us there, and what strategies we might employ to meet them.
The sixth assertion is that the future of healthcare can be studied in a table of

    6) Elementsas I lay out in the report Healthcare 2027: Elements. A link to a complimentary version of Joe’s report can be found here.

Categories: OIG Advisory Opinions

Moving the Needle to Diversify Health Tech

The Healthcare Blog - Thu, 10/12/2017 - 13:15

There is a dire need for the health tech workforce to keep pace with the changing racial makeup of the nation.  According to  the Pew Research Center study,  from 1960 to 2010, the percentages of Americans identifying themselves as Black, Hispanic, Asian, or “other” increased from just 15 percent of the population to 36 percent of the population:

  •       Black: Increased from 10 to 12 percent
  •       Hispanic: Increased from 4 to 15 percent
  •       Asian: increased from 1 to 5 percent
  •       “Other”: Increased from 0 to 3 percent


We live in a country whose racial makeup grows to be more diverse every day, however, the  nation’s tech workforce does not reflect the diversity of the nation in the least bit.  To dig deeper, the nation’s health tech workforce is no better in terms of its diversity and inclusion of minorities. While other tech companies may be able to get by with a certain racial makeup, it’s extremely necessary for the health tech industry to not follow this pattern mainly because of the diverse customers that these tech products are being made for: patients.  

Health 2.0 rolled out the first Diversity in Health Tech Mentorship program, TECHquality, earlier this year. Right now, there is an open applications for Mentors and Mentees for the second round of the mentorship program. Mentees must self-identify as part of an underrepresented group of health tech. This can range from people of color, women, seniors, people with disabilities, LGBTQ, etc. Mentors are individuals who have expertise in health tech and are dedicated to increasing diversity and supporting inclusion in tech.

We believe that increasing the number of role models for minorities and creating opportunities for mentorship and job growth will help to alleviate the disparities that we see in the health tech industry today.

We don’t want this to be just another diversity initiative that calls the lack of diversity and inclusion of minorities to light and fades away.  What we really want is action.  We hope for this initiative to push the needle forward and impact the health tech industry as it continues to grow and impact an array of patient lives.  Diversity is reflected in the millions of patient lives we hope to change through health tech, so why don’t our workplaces?

There are a few ways to get involved check them all out here.

Sabah Pervez and Alyx Sternlicht are Senior Program Managers at Catalyst @ Health 2.0.

Categories: OIG Advisory Opinions

The Four Things Keeping Hospital CEOs Awake at Night This Year (Hint: Donald Trump Isn’t One of Them)

The Healthcare Blog - Mon, 10/09/2017 - 15:25

The Center for Medicare and Medicaid Innovation released a Request for Information (RFI) last week– “New Direction for the CMS Innovation Center.” It’s the latest chapter in the unfolding policy framework that will govern the health system for at least the next 3 years.

The RFI, which doubles down on value-based alternative payment models and consumer directed care, coupled with a proposed rule to cancel mandatory bundles by former HHS Secretary Price, the administration’s actions last week to weaken contraceptive coverage requirements in employer-sponsored health plans and Congress’ FY18 federal budget that include cuts in Medicare and Medicaid funding provide a sobering context for hospital and health system strategic planning. But hospital CEOs have adapted to the new normal from DC: uncertainty about the laws governing our health system is standard fare.

Last month, I interviewed 13 hospital CEO’s in preparation for their upcoming Board-Management strategic planning retreats. They lead organizations in 11 states with substantial differences in the scale, scope and strength of their operations and the dynamics in their markets. Two are academic medical centers, six are independent multi-hospital systems and five operate in multiple markets. When I asked “what’s keeping you awake at night” their answers were the same.

The second wave of cost reduction: All recognize that reducing costs is imperative: there’s recognition that the low-cost position in their market is a huge competitive advantage. They made cuts in their supply chains and modified their contracts with suppliers. They tackled their revenue cycle by leveraging technologies and, in some cases, outsourcing to improve cash flow. They trimmed labor costs, improved productivity and eliminated positions. And they streamlined their clinical portfolio, centralizing programs where possible and applying lean management techniques across service lines. But CEOs see these as defensive strategies—necessary to stay in the game but insufficient to position their organizations for long-term success. They foresee even greater pressure on their cost structure as employers and consumers force price transparency, insurers flex their muscles demanding deeper discounts, the government cuts reimbursement and uncompensated care increases as the ranks of the uninsured and under-insured swell. The academics see cuts in funding for research and education, and all expect labor costs to grow annually. And all are hopeful FDA Director Scott Gottlieb’s efforts to constrain drug costs will be successful, but fearful it won’t. (Gottlieb’s focus is streamlining the approval process so high-priced drugs face more competition. This year, the FDA has approved 34 new drugs vs. 22 at this point last year and 73 applicants for generic approvals vs. 57 last year. He’s won accolades from both parties and is rumored to be the front runner to succeed Dr. Price as HHS Secretary). CEOs are focused on the next wave of costs and recognize it means saying no to projects and investments they’d ordinarily support.

Affordable quality: CEOs see what many overlook: ‘quality of care’ is pass/fail to purchasers and policymakers. You either hit the mark or suffer penalties from payers (including the government) or reputation risk at the hands of competitors. It’s increasingly complicated– more than 500 public measures accessible to competitors, media and the public. It’s report cards that pit clinical programs side by side with competitors alongside costs. It’s not just process measures in their control: it’s outcomes including those many patients themselves control. Exceptional performance on quality means access to cheaper capital from lenders and but only if costs are also low. CEOs see quality of care as highly variable between hospitals, operationally intense and costly. How populations are diagnosed, treated and managed optimizing the interaction of people, process and technologies and evidence-based care ruffles feathers, disrupts routines and causes friction. The public’s keen to know who gets the best results: more than 800 hospitals can lay claim to being among America’s best, based on which clinical program is measured, the metrics used and the list sponsors’ methodology. What keeps CEOs awake is recognition that optimizing quality of care is not a guarantee of financial success or long-term sustainability. It’s a necessary focus that’s getting more complicated and expensive.

Opportunistic growth to achieve optimal scale: CEOs recognize value-based purchasing and alternative payment programs are here to stay. They see lenders and investors making bets in profitable niches once their domain. The bond market is tightening and margins in their core operations—acute and outpatient services—are shrinking. But demand in healthcare is increasing! For CEOs, there is recognition that the scale and scope of their enterprises must expand if they are to remain relevant. But that carries risk: if capital is invested outside the core, will physicians and the board be supportive and will community leaders understand? Is the management team capable and competent to manage business units outside their experiences? How will partners be vetted? How should the current infrastructure change? And what’s the optimal scale and scope of their organization’s long-term? CEOs recognize the economics of ‘going big or getting out’ work in most industries: they sense the same in healthcare.

Board readiness: CEOs worry about their boards. Many think their trustees are not fully prepared for the expanded challenges ahead. Owning the issue of affordability in their market, operating in a model in which revenues are at risk based on value, and expanding their enterprises regionally in social services, retail, digital, financial domains are not fully grasped. Applying evidence to care aggressively, immersing the organization in data-driven decision-making, moving services into homes, schools and workplaces, and building population health capabilities are daunting imperatives. And informed vigilance about expanding regulations and encroachment by non-traditional competitors require more time invested in board education and deliberation. CEOs see functions like physician leadership, advocacy, regulatory compliance, philanthropy, analytics, capital planning, reputation management and planning taking on added significance as they equip their boards for the new normal.

I believe hospitals are at a crossroad. The sector cannot content itself that its clinical innovation and local economic impact guarantee a sustainable future void of major change. The public thinks them unwieldy and expensive. Employers think they’re costly and inefficient. Physicians believe they’re dabbling in areas they should otherwise avoid. And policymakers expect them to do more with less while also handling the public’s health.

For hospital CEOs, it’s hard to get a good night’s sleep.

Categories: OIG Advisory Opinions