A Three Pronged Approach to Making the Healthcare System Work

1
A Three Pronged Approach to Making the Healthcare
System Work

• October 12, 2004
• Thomas H. Lee, MD
• Network President
• Partners Healthcare System

2
The Optimistic Long View
High
Q 50 ppts 40 ppts
Chasm Crossing
Clinical re-engineering by MDs, hospitals
suppliers
Consumerism P4P
Value of Health Benefits
? Market sensitivity to hospital/MD quality cost
Performance Disclosure
Performance comparisons for hospitals, MDs Tx
Q compliance with guidelines annual health
benefits cost
Low
2002
2012
Key Evolutionary Steps
Reproduced with permission of Arnold Milstein, MD
(Mercer)
3
(No Transcript)
4
(No Transcript)
5
Nash Equilibrium

• Multiple parties frozen in current relationships
  because no party can change its strategies while
  the other parties keep their strategies
  unchanged.
• Nash Equilibriums break down when pain of status
  quo for multiple parties exceeds fear of unknown.

6
Why Change Is Hard

• The basic question providers ask We are good
  people who work so hard why do we have to
  change what we do?
• Health care system is focused upon meeting needs
  of patients with acute symptoms leading to
  tunnel vision and difficulty making/implementing
  long term plans.
• Perfect storm
• Too much to know
• Too much to do
• Too many people involved
• Patients not doing their part

7
But Essential

• We have a perfect storm for others in health
  care, too.
• Aging population of demanding baby-boomers
• Tremendous progress
• Greater costs
• Greater potential for chaos leading to safety
  issues
• Global economy
• Painful realization Providers cannot get the
  fees/rates that they need without meeting needs
  of purchasers (improved quality/efficiency and
  openness to new products with transparency)

8
Our Times Call for Two Revolutions

• Industrial revolution
• Adoption of electronic and other tools to improve
  the reliability of care by reducing errors of
  under-use/over-use/mis-use
• Cultural revolution
• Physicians evolving to understanding that they
  are (very important) part of overall system and
  (key) members of teams -- and that the focus is
  caring for populations of patients over time.

9
A Three Component Strategy for Making the
Healthcare System Work

• Pay for performance contracting
• Products with transparency to consumer re
  costs/quality
• Build a Prius initiatives

10

Partners HealthCare System, Inc. (PHS)

Dana-Farber/ Partners Joint Venture
Partners HealthCare System, Inc.
Two Physicians Appointed by Partners
Partners CommunityHealthCare, Inc.

Brigham And Womens/ Faulkner Hospitals
North Shore Medical Center, Inc.
Newton- Wellesley Health Care System, Inc.
The Massachusetts General Hospital

AtlantiCare Medical Center, Inc.
Newton- Wellesley Hospital, Inc.
The Salem Hospital
The General Hospital Corporation
The Brigham and Womens Hospital, Inc.
Faulkner Hospital, Inc.
11
Pay for Performance Contracting Spreading

• Other models (capitation, fee for service) not
  controlling costs or improving quality.
• Cost-shifting to patients is occurring, but is
  likely a short-term strategy.
• Rewarding physicians and hospitals for better
  quality and punishing those with worse quality
  has momentum.
• Publication of quality data alone not effective
• Integrated delivery systems need legal basis for
  contracting with affiliated physicians and PHOs

12
Current Model for Contracts

• A portion of the total increase is at risk.
• MDs who achieve targets will be rewarded with a
  greater net increase.
• MDs who do not will receive their guaranteed
  increase, but will see a lower net increase.

Current Provider Fees

• Note Numbers on Y axis are hypothetical, and not
  related to any contract.
• Key Point To achieve higher overall increases,
  physicians may have to put a substantial
  percentage at risk for performance against
  defined quality and efficiency targets.

13
Major Target Areas in Pay For Performance
Contracting

• Hospitals
• Hospital use (and type)
• Radiology
• Computer order entry
• JCAHO cardiac quality measures

• Physicians
• Hospital use
• Pharmacy
• Radiology
• Electronic record adoption
• Diabetes/Asthma/ Chlamydia screening

14
Incentives Lessons from Prospect Theory

• Awarded Nobel Prize for Economics in 2002
• Explains what was previously considered
  economically irrational behavior
• More perceived value ascribed to
• Losses (compared to gains)
• MDs dislike risk of a 100 loss more than they
  like potential for a 10 gain
• Percent difference (than actual dollar value)
• People will drive two miles to save 1 on gallon
  of milk, but not to save 1 on television set

15
Correlation between perceived loss or gain and
actual loss or gain
Prospect Theory, Kahneman and Tversky,
Econometria 1979
16
Implications

• Multiple smaller incentive pools create more
  bang for buck than single larger pool
• Steep portion of curve -- Sum of two gains (or
  losses) have greater perceived value than single
  equivalent gain (or loss)
• Threat of loss of withhold creates more
  unhappiness but more action than offer of a
  bonus
• Sum of gain (e.g., 1,000) and smaller loss
  (e.g., 750) has less perceived value than total
  (250)

17
Implications for Impact of Consumer-Oriented
Products

• Physicians have generally dismissed likely impact
  of consumer-oriented products because
• Report cards are too complex
• Rewards of more market share are not that
  meaningful to physicians and hospitals
• But as products are introduced with major savings
  for patients moving to lower cost/higher quality
  providers, some patients may actually move
• Loss of a few patients likely to have impact on
  physicians and hospitals

18
Dissemination of Innovation
19
Joke 1 How to Accelerate Adoption of Best
Practices

• We are making progress one funeral at a time
• Physician leader of mid-western integrated
  delivery system

20
Examples of Year 1 Signature Work

• LMR enhancements
• Safety interventions percolating through IS
• Cardiac and diabetes leaders making house calls
• Decision made that all admitted CHF patients will
  be candidates for CHF program
• Call center for high risk Medicaid/Free Care
  started
• Radiology management program being implemented
• High cost drug evaluations underway

21
Themes of Year 1 Work

• Taking inventory of System activities
• Knowledge management inventory of decision
  support, collection of data on patient safety
  hardware/software
• Supporting/studying pilot programs
• Adverse event reporting systems, radiology
  management pilots
• System-level decision making
• E.g., LMR priorities, drug interactions, high
  cost drug guidelines
• Changing System culture
• Pushing EMR dissemination, making enrollment in
  CHF program systematic
• Developing new System-level systems
• Cardiology and diabetes peer review programs,
  call center for high risk Medicaid/Free care
  patients

22
Joke 2 Benchmarking

• Over the years, many great ideas have come out of
  Harvard Medical School and very few have gotten
  in.

23
Partners Vs. The VA
24
How Did the VA Do It?

• Everyone uses electronic medical record
• Registries to track patients with certain disease
  conditions
• Performance measurement and reward system
• Public release of data
• Physicians removed from decision-making process
  for some functions (e.g., flu shots)

25
Jokes 3 and 4 Organizational Dysfunction

• The problem with socialism is that it will take
  up too many evenings.
• -- Oscar Wilde
• A vote of 1500 physicians to 1 is a tie

26
Is Integration and Coordination of Care the
Answer?

• The right thing to do better for patients
• Costs of integration can approach or exceed
  financial benefits
• Costs of coordination decrease with greater
  tightness of organization
• Can help blunt trend, but wont get at the 30
  waste believed to be out there

27
Just-in-Time Decision Support
Small traditional practices
Practices investing in quality improvement for
populations
Practices investing in producing efficiency
28
What Do the Initiatives Boil Down To?
The Signature Initiatives promote systems that
make it easier for doctors to provide better care
to patients.
Electronic Medical Records CPOE (Teams 1, 2 5)
Reduce dangerous and costly medication errors
improve efficiency in use of tests
High Risk Patient Management Teams and Call
Center (Team 4)
Some Systems of Care Incorporated into The
Signature Initiatives
Coordinate care for sickest and most complex
patients
Assure that patients reliably receive the most
effective available treatments
Deciding what we should do -- and then doing
it! (Team 3)
29
What Do Partners Change Leaders Want Most?
Question to SI Team Leaders If you could have
only one or two things to achieve your team
goals, what would they be?
Team 1 EMR adoption in the community EMR use
at the AMCs Team 2 CPOE with decision support
for drug ordering. Teams 3 4 EMR templates for
managing chronic conditions. Team 5 Electronic
prescribing and radiology ordering with decision
support.
30
Joke 5

• For physicians, free is not cheap enough.