If you remember a prior post, I talked about reliable websites to assess a hospital’s quality. Here is an email report I received from Jennifer Faerberg Director, Health Care Affairs Association of American Medical Colleges:

As many of you are aware, the AAMC is a founding member of the Hospital Quality Alliance (HQA), which in conjunction with CMS, is responsible for generating the Hospital Compare website hosted on the HHS website located at www.hospitalcompare.hhs.gov.

Attached is your institution copy of the AAMC COTH Hospital Compare report for April 2011. Please note that CMS has changed the update cycle for the Compare website by one month so reports will now be sent April, July, October and January. This release updates the inpatient, outpatient and patient satisfaction measures. Mortality, readmission and imaging efficiency data are updated annually and therefore will be updated in the July release.

The latest release also includes data (rates) on eight Hospital Acquired Conditions (HACs) which are available only via a downloadable database. This information will not be displayed on Hospital Compare until 2012. We plan on incorporating
the HAC data into the COTH reports prior to their public display.

Here are some of my thoughts and those of Dr. Tom Diller:

- Remember, the data is July 2009 through June 2010, so the report represents our performance 10 to 22 months ago. It is a little like driving and only looking through the rear view mirror. We have to do both.

- We are doing really well on Core Measures, as are a lot of hospitals. There is a proposal by CMS that the VBP program will include only a subset of Core Measures. These are measures that have not been maxed out by hospitals and are the remaining ones that we need to improve as an industry. It also would focus specifically on those measures that are tied to significant reimbursement in 2013.

- Cardiology and Cardiac Surgery results are superior…let’s celebrate, hold the gain and keep moving.

- There is still a lot of room for improvement. Keep thinking about our commitment to Total Health and how we need to look at keeping populations healthy and costs down. To that end, take a look at pages 10 and 11. These are radiologic efficiency measures that are relatively new. They are not great measures or comprehensive measures, but they directly relate to Total Health. Reviewing these measures, we have significant overutilization, both relative to national benchmarks and COTH hospitals. We are going to need to get control of this issue around utilization in order for us to be successful as an Accountable Care Organization. To that end, the Chair of Radiology, David Williams is working on implementing some software that would be linked to Computerized Physician Order Entry that will help guide physicians with evidence based radiologic ordering. The goal is best care, not less care!

- One more caution, even though this shows great progress on our Patient Satisfaction survey (HCAHPS) we have a significant need to improve on those scores.

Below is the report, if you cannot read the report; CLICK HERE to download the PDF.

Hospital Compare Analysis – Greenville Memorial Hospital

The following NYT editorial was by Scott Walker, a Republican, who is the governor of Wisconsin. I become increasingly convinced that the solutions for healthcare are not dualistic. It is not a Republican or Democratic solution, rather a Republican and Democratic solution. I think that is the good news of having a Republican congress…it allows for the conversation to be both, even if it may at times look like neither.
——-
Our Obsolete Approach to Medicaid
By SCOTT WALKER
Published: April 21, 2011
Madison, Wisconsin

WHAT does Medicaid have in common with “I Dream of Jeannie,” “Lost in Space” and “Get Smart”? They all made their debut in 1965. Although we enjoy watching reruns of these classics, the television networks have updated their programming. The federal government should do the same.

In recent years Washington has taken an obsolete program, which covers health care for low-income Americans, and made it worse through restrictive rule-making that defies common sense. It is biased toward caring for people in nursing homes rather than in their own homes and neighborhoods. It lacks the flexibility to help patients who require some nursing services, but not round-the-clock care.

If we were designing a health insurance program for low-income families today, we would use a much different model to drive efficiency and innovation — one that recognizes that the delivery of health care is fundamentally personal and local.

Time and again states like Wisconsin have blazed the path in Medicaid — from giving individuals greater control over their care to expanding the use of electronic medical records — while the federal bureaucracy has lagged behind. Just now Washington is discovering accountable care organizations (networks of doctors and hospitals that share responsibility for caring for patients and receive incentives to keep costs down) and “medical homes” (a model in which one primary-care doctor takes the main responsibility for a patient).

Wisconsin has created a database of claims and payments that gathers information from all insurers, including private companies and the state Medicaid program. It allows people to compare cost and quality across providers. We have asked Washington to add its data to our database, but it has not done so.

We need to modernize not only Medicaid’s benefits and service delivery, but also its financing. In good times, the open-ended federal Medicaid match encourages states to overspend. Amazingly, the program is now viewed by some states as a form of economic development because each state can at least double its money for each dollar spent. That matching feature penalizes efficiency and thrift, since a reduction of $1 in state spending also means forfeiting at least one federal dollar, often more.

Medicaid in its present, outdated form is unsustainable. Without serious reform, it is unthinkable to add 16 million more people, as President Obama’s health care legislation would do. The White House budget would temporarily pay 100 percent of the costs of new Medicaid enrollees. As a result, many states would expand enrollment, deferring the hard decisions until the federal money goes away.

An alternative approach is to offer block grants for Medicaid, as my fellow Wisconsinite, Representative Paul D. Ryan, the chairman of the House Budget Committee, has urged. Why now support a block grant for Medicaid when similar proposals have failed?

First, we know from more than a decade of experience with welfare reform that switching from open-ended entitlements to block grants pushes both individuals and states to behave more responsibly.

Second, more than a decade of experience with the State Children’s Health Insurance Program, which has vastly expanded coverage for children while being more flexible than Medicaid, shows the success of the block-grant model.

Third, there are already caps within Medicaid through so-called Section 1115 demonstration projects. It is through such projects, known as waivers, that innovative programs like BadgerCare in Wisconsin and MassHealth in Massachusetts (which President Obama says was his model for reform) were built. States from Arizona to Washington have also had waivers that capped federal liability for Medicaid. Their success shows that we can move beyond demonstration projects and let the federal government relinquish control over Medicaid.

Finally, some state officials oppose block grants because capped financing would bring the fiscal discipline they try desperately to avoid. But this discipline is precisely what is necessary to slow the rate of growth in health care costs. It is unlikely that doctors and hospitals will support authentic cost-saving measures as long as they believe there is more money coming from somewhere.

States are not merely “laboratories of democracy,” but also sovereign governments under our system of federalism. Unfortunately, the encroachment of the federal government in Medicaid threatens to reduce states to mere agents.

Block grants would bring a truce to the tug-of-wars between Washington and the states. This is the best option for Medicaid, facing a midlife crisis, to survive.

To find this article, here is the link on NTTimes.com: http://www.nytimes.com/2011/04/22/opinion/22walker.html?_r=1&hp

I sent the below email to the Board a few days ago. It contains a few links about Dr. Sorensen and his accomplishments, but a quick search of the literature will find many more. I thought of Andrew this morning and, perhaps oddly, a quote attributed to the Lakota Indians – “Today is a good day to die.” Although the saying may have a warrior quality to it, I believe it goes deeper than that and speaks to hard work, preparation, and being connected and clear with loved ones.

I think of Andrew as someone who was always alert and engaged. Rarely would he hold back – he was all in all the time. We had a chance to work together when I first got here and I am grateful for his support and encouragement as we progress from a community teaching hospital to an Academic Health System.

I am also struck by the fact that something has happened to me since I have hit 50 – I think much more about the second half of life. How do I contribute to something that is bigger than me…what do I give back..how do I help others? I trust many of you have similar questions. What a liberating thought to be able to say “Today is a good day to die.”

To: GHS Board of Trustees

You may already have heard that Andrew Sorensen, PhD, died unexpectedly yesterday in Columbus, Ohio. Dr. Sorenson was a long-time GHS supporter and more recently a valued collaborator and partner in the important initial phases of the USCSOM-Greenville expansion. Following are links to three related news reports:

http://www.greenvilleonline.com/article/20110417/NEWS/304170041/Former-USC-leader-Sorensen-dies

http://www.wyff4.com/news/27578324/detail.html

http://www.thestate.com/2011/04/18/1782770/former-usc-president-sorensen.html

As details about funeral and memorials services are put in place, we will ensure that the Board and GHS communicates our condolences to Mrs. Sorensen and the family.

Michael C. Riordan
President and CEO

Last Friday was a meaningful day. In the morning we had a Board meeting to review and approve the agreements between GHS and USC as we move forward with the University of South Carolina School of Medicine-Greenville. To mark the occasion, I wore my red USC tie. There was much excitement, but also a knowledge that much still remains to be done. We have to finish the work needed to receive national accreditation with the Liaison Committee for Medical Education (LCME). We submitted all of our documents last week and we are scheduled for a visit in earl July – things are on track and look good. We are also scheduled to meet with the Commission on Higher Education (CHE) and review the plans with them and I anticipate all will go well. While there is much to celebrate, there is still more to be done….and then the real work begins as we look to have students in the classroom in the fall of 2012.

What happened next, however, was just as meaningful, although very different. On occasion, I receive calls from friends or community members about a patient in the hospital. If requested, and appropriate, I will visit the patient. In fact, because of privacy laws a call from a friend is usually the only way I know a patient is in the hospital. I take patient privacy very seriously. The night before, requests for me to check in on a patient and visit the family came from two different people – both of whom I greatly respect. It was also from them that I learned this person was more likely to appreciate an orange tie rather than a red one. With that in mind, when I left for work that day, I stuck a Clemson tie in my pocket. After the Board meeting, I made a quick wardrobe change and headed upstairs to the Intensive Care Unit. When I entered the room the patient was not awake, but a beautiful woman elegantly rose to greet me and the Director of Nursing. I was struck how she was there with her son, standing vigil. We spoke for several minutes, I told her how several of her son’s friends had contacted me and she remarked he is “loved by so many.” She fought back tears, spoke positively, asked for our prayers and we hugged. As we were leaving, she mentioned the tie. I had forgotten about the tie up until then, but I paused and told her the story. She laughed and was grateful for the gesture and we said our goodbyes.

For me, it was a meaningful day…I was connected to purpose in a Board room and a Patient room and I was reminded of the love of a parent and that small gestures mean a lot.

The Healthcare debate continues on – get used to it. It seems as if everyday there is a new idea, or an old idea, being raised to address the healthcare dilemma in this country. The ideas range from privitizing Medicare to going to a Single Payer System for the State. Smart people of good will have expressed concerns that we have gone too far and others that we have not gone far enough. The financial and debt issues in this country along with the problems of the uninsured and under-insured make these conversations important and timely. We will be hearing more about the pros and cons of the Affordability Care Act (Obamacare) as the 2012 Presidential Campaign moves forward. We will have a preview of that debate right here in Greenville, at the Peace Center, in early May when Republican Candidates for the Office of the President square off for a debate – I plan to be there.

In the meantime, I have attached an article from the New England Journal of Medicine that describes the approach of a small state in the northeast – Vermont. The article is below for you to review, if you cannot see the article then CLICK HERE to download the PDF.

As always, feel free to comment.

I have spoken about my cycling endeavors in the past, and if you don’t remember, wearing a helmet is important!  There are many reasons to ride a bike and the following video may be one more.  I hope you will join me and many friends in the community on one of these rides.

Best Practices for Better Care

We’re Making Sure Our Best Practices Make the Rounds

From medical breakthroughs to the latest treatments, America’s medical schools and teaching hospitals, and their physicians and scientists, have a legacy of advancing medicine and setting the standard for the best patient care. Now, we are working together to create Best Practices for Better Care, a multi-year initiative to improve the quality and safety of health care.

Through Best Practices for Better Care, we are putting proven practices in place to ensure safer surgeries, reduce infections, and cut hospital readmissions. We are building an even stronger culture of quality and safety in medicine by passing on these best practices to every new doctor we train and making sure quality and safety is part of medical education from day one. And through research and evaluation, we will continue to refine these best practices, discover new ones, and share our knowledge with others to improve health and health care in the future.

To date, more than 200 teaching hospitals and health systems (Greenville Hospital System included) are participating in this unique effort. Together, these institutions represent 12 percent of hospital admissions nationwide and train nearly 41 percent of the nation’s doctors.

See who is part of Best Practices for Better Care

The Best Practices for Better Care Commitment

In this first phase of Best Practices for Better Care, participating medical schools and teaching hospitals have committed to:

Teach quality and patient safety to the next generation of doctors
Ensure safer surgery through use of surgical checklists
Reduce infections from central lines using proven protocols
Reduce hospital readmissions for high-risk patients
Research, evaluate, and share new and improved practices.
Over time, this list of commitments to Best Practices for Better Care will continue to grow.

For more information, please contact bestpractices@aamc.org.

I forwarded the link of Brene Brown’s presentation to members of my family and my oldest son Chis took a look and called me to let me know that he liked it. I mentioned how of all my posts, the one on Vulnerability got the most comments – I was quite full of myself. He then asked me how many comments and I told him 3. I could hear him snickering on the phone. Perhaps he gave me a lesson in vulnerability. Regardless, here is a follow up and I plan to show this at a subsequent Leadership Meeting.

Last week, I participated on a panel discussion on physician employment at the National Health Policy Forum in Washington DC. There were nearly 100 health policy professionals in attendance. One of these people sent a link to a Perspective article in the March 30^, 2011 issue of the New England Journal of Medicine. It has a provocative title: Hospitals’ Race to Employ Physicians – The Logic Behind a Money-Losing Proposition. I’ve included a copy below and following is a direct link to the article.: http://www.nejm.org/doi/full/10.1056/NEJMp1101959?query=NC&?query=NC

Here is a single excerpt from the article that gives a sense of the key message being communicated:

Strategically, hospitals with a robust employment strategy will be well positioned to compete under various reimbursement scenarios. If the fee-for-service system persists, large physician networks will provide hospitals with greater pricing power when they are contracting with health plans. This scenario favors greater hiring of specialists. Conversely, if payment systems move toward population health management and risk-based reimbursement, then large outpatient networks will allow a system to shift patients away from higher-cost hospital-based care and recapture lost revenues as shared savings or capitation surpluses. This scenario favors greater hiring of PCPs.

If you’re interested, I have also attached the slides from my presentation at the Washington meeting. If you cannot view the presentation, CLICK HERE to download the PDF.

* * * * * *

Perspective

Hospitals’ Race to Employ Physicians — The Logic Behind a Money-Losing Proposition

Robert Kocher, M.D., and Nikhil R. Sahni, B.S.

March 30, 2011 (10.1056/NEJMp1101959)

Article

References

U.S. hospitals have begun responding to the implementation of health care reform by accelerating their hiring of physicians. More than half of practicing U.S. physicians are now employed by hospitals or integrated delivery systems, a trend fueled by the intended creation of accountable care organizations (ACOs) and the prospect of more risk-based payment approaches. Whether physicians, hospitals, or payers end up leading ACOs will depend on local market factors, competitive behaviors, and first-mover advantage, but employment decisions made by physicians today will have long-term repercussions for the practice and management of medicine.1

In the 1990s, hospitals acquired many physician practices of which they subsequently divested themselves. After the current cycle of physician-practice acquisitions, it will be harder to revert to private practice if relationships sour, since new payment structures and care models will make it increasingly difficult for traditional private practices to remain profitable. Many clinicians are unaware that hospitals lose money on their employed physicians, though hiring them may be a wise long-term investment. Understanding the economics of these decisions will help physicians to anticipate the evolution of their employment situations and see why hospitals are making increasingly aggressive plans to acquire physician practices.

Hospitals lose $150,000 to $250,000 per year over the first 3 years of employing a physician — owing in part to a slow ramp-up period as physicians establish themselves or transition their practices and adapt to management changes. The losses decrease by approximately 50% after 3 years but do persist thereafter. New primary care physicians (PCPs) contribute nearly $150,000 less to hospitals than their more-established counterparts; among specialists, the difference is $200,000. For hospitals to break even, newly hired PCPs must generate at least 30% more visits, and new specialists 25% more referrals, than they do at the outset. After 3 years, hospitals expect to begin making money on employed physicians when they account for the value of all care, tests, and referrals. Skeptics note that often they already capture this value from physicians without employing them, through stable referral networks and hospital practice choices. Outpatient office practices of employed physicians seldom turn a profit for hospitals.

Hospitals are willing to take a loss employing PCPs in order to influence the flow of referrals to specialists who use their facilities. In the 1990s, hospitals usually guaranteed physicians nearly 100% of their previous year’s salary during their transition to hospital employment. This arrangement invariably led to losses, since drops in productivity were coupled with higher overhead expenses and less-effective revenue-cycle management. Today, aggressive hiring of PCPs is returning, in part because hospitals fear physicians’ becoming competitors by aggregating into larger integrated groups that direct referrals and utilization to their own advantage. Hospital-employed PCPs generally direct patients to their own hospitals and specialists affiliated with them. In addition, by employing physicians, hospitals retain maximum flexibility in the market, should health plans change their reimbursement structures to require providers to bear risk and manage population health.

Hospitals are clearly acquiring practices again (see Figure 1 Percentages of U.S. Physician Practices Owned by Physicians and by Hospitals, 2002–2008.).

A recent survey by the Medical Group Management Association shows a nearly 75% increase in the number of active doctors employed by hospitals since 2000, and recent hospital announcements suggest this trend is accelerating. A September 2010 survey revealed that 74% of hospital leaders planned to increase physician employment within the next 12 to 36 months.2 Furthermore, the young doctors being hired today tend to value better work–life balance and are more willing than preceding generations to trade higher incomes for the lifestyle flexibility and administrative simplicity provided by hospital employment.

Whereas hospitals prioritized PCP employment in the 1990s, they are now targeting both PCPs and specialists (see Figure 2Figure 2 Percentages of Active U.S. Primary Care Physicians (PCPs) and Specialist Physicians Employed by Hospitals, 2000–2012.); many organizations are constructing what could effectively become closed, integrated health care delivery systems.

Strategically, hospitals with a robust employment strategy will be well positioned to compete under various reimbursement scenarios. If the fee-for-service system persists, large physician networks will provide hospitals with greater pricing power when they are contracting with health plans. This scenario favors greater hiring of specialists. Conversely, if payment systems move toward population health management and risk-based reimbursement, then large outpatient networks will allow a system to shift patients away from higher-cost hospital-based care and recapture lost revenues as shared savings or capitation surpluses. This scenario favors greater hiring of PCPs.

A major concern in either scenario is the potential for hospitals to convert greater market power into higher prices and less competition.3 High-cost markets are typified by dominant local providers who exercise pricing power. This is perhaps most clearly illustrated in Massachusetts, where Attorney General Martha Coakley determined that high prices and price variation are largely correlated with market share. She found that “price variations are not explained by quality of care, the sickness or complexity of the population being served, the extent to which the hospital is responsible for caring for a large portion of patients on Medicare or Medicaid, or whether the hospital is an academic teaching or research facility.”4 Payers acquiesce in price negotiations because they cannot afford to lose access to large provider networks. Similar patterns have emerged around the country; for instance, in Roanoke, Virginia, the dominant system, Carillion, reportedly charged 4 to 10 times as much for a colonoscopy as local competitors or providers in similar markets.5 Although ACO-type organizations that integrate physicians and hospitals offer the promise of better care coordination, fewer complications, and cost savings, it is unclear whether these benefits will be passed along to patients as lower prices.

In the future, physicians should anticipate a shift from guaranteed salaries to incentive-driven compensation linked to productivity and clinical behavior — with base compensation that is lower than their previous earnings but incentives that can increase it to that level or higher. This approach attempts to maintain productivity levels, while encouraging physician behaviors that reduce costs or increase revenues. Today, in markets where most physicians who are highly profitable to hospitals are free agents, hospitals tolerate higher operating costs in order to attract and retain these physicians’ loyalty. As more physicians become employees, hospitals will be better able to reduce excess costs associated with unnecessary practice variation and unnecessarily expensive supplies selected by physicians. These reductions will be achieved through such actions as standardizing surgical supplies, using evidence to choose cost-effective medical devices, requiring use of health information technology, requiring adherence to clinical guidelines, scheduling elective procedures in ways that maximize asset utilization, and discharging patients consistently early in the day. Although some physicians may not want to trade autonomy for employment, they must understand that hospitals are under pressure to implement cost-saving strategies, which may benefit consumers if savings are passed on through lower prices.

Understanding the economics of physician employment and the actions hospitals will probably take to stem losses will help physicians make wiser judgments. Hospital owners will not engage in long-term strategies that lose money indefinitely. Though hospital employment may offer physicians some protection from system reforms, it comes with more performance management than it once did, and the option of reverting to independent practice later may be far less attractive in the future. Employment choices that physicians make today may not be able to be undone.

Of course, these choices will also affect patients. As patients accumulate more, and more complex, medical conditions, their care will require greater coordination, greater use of clinical data, and collaborative provider teams — which integrated delivery systems are best positioned to deliver. In the long run, any pricing distortions derived from market power and friction associated with changing the role and behaviors of physicians are likely to dissipate and be outweighed by improved productivity, outcomes, and patient experiences, and more efficient health care markets may translate into lower prices over time.

Disclosure forms provided by the authors are available with the full text of this article at NEJM.org.

This article (10.1056/NEJMp1101959) was published on March 30, 2011, at NEJM.org.

Source Information

From the McKinsey Center for U.S. Health System Reform and the Engleberg Center for Health Care Reform, Brookings Institution — both in Washington, DC (R.K.); Harvard Business School, Boston (N.R.S.); and the John F. Kennedy School of Government, Harvard University, Cambridge, MA (N.R.S.).

I recently received the following descriptive statistics, as of 3/23/11, of our physicians at GHS and I saw a story of age and gender shifts locally and nationally.

We have a total medical staff of over 1,100 physicians. This group includes all the physicians that practice exclusively at GHS as well as those that practice at several hospitals. The physicians in our University Medical Group (UMG) are a subset of the entire medical staff and comprise nearly 550 physicians.

What is the age breakdown for the entire GHS Medical Staff?
1) The percentage less than 60 years of age is 86%
2) The percentage greater than or equal to 60 years of age is 14%

What is the age breakdown for UMG Physicians?
1) The percentage less than 60 years of age is 89%
2) The percentage greater than or equal to 60 years of age is 11%

A couple of observations about the above numbers – in total we have a relatively young medical staff and the UMG is even younger. It appears to support the trend indicated in some prior posts that younger physicians are aligning with highly integrated delivery systems, like GHS, rather than moving between hospitals.

Let’s dig a little deeper on some additional statistics about the gender difference in the UMG.

1) The percentage who are female is 29%
2) The percentage who are male is 71%

It is apparent that practicing physicians are still primarily male, this is also the case at a national level. However, this is changing because the number of women entering medical school is now slightly more than men. It looks as if this trend will continue and, over time, the mix of practicing physicians will move increasingly towards a balance between men and women.

The influx of more women physicians and the changing gender of the medical staff is further demonstrated by the following:

1) The percentage of females less than 60 years of age is 98%
2) The percentage of females greater than or equal to 60 years of age is 2%
3) The percentage of males less than 60 years of age is 85%
4) The percentage of males greater than or equal to 60 years of age is 15%

The University Medical Group takes care of nearly 84% of the patients that come to GHS and we are changing. We are younger than the community physicians at large and we are seeing a gender change as older, male physicians approach and women are filling the ranks. We are experiencing a Generation Doc!