Rein in National Drug Spending

Drug costs now account for about 20% of all healthcare expenditures.

Putting Interoperability on FHIR

This lack of interoperability leads to incorrect diagnoses, ineffective therapeutic plans, and unnecessary and costly duplicate testing.

Predicting the Future: What to Look for in 2016

The role of a prognosticator is to accurately predict the future. We will see how well I have done when December rolls around.

Choosing the “Good Jobs” Strategy

Provider organizations, for the first time, are now forced to choose between a good- or bad jobs strategy, with many leaders unaware of the available options.

Recent Articles:

Rein in National Drug Spending

Rein in National Drug Spending

Although overall healthcare cost inflation remains relatively small, healthcare spending just passed 18 percent of the nation’s gross domestic product at the end of 2015. Because of the size of healthcare as a component of the nation’s expenditures, this continued increase in spending is unsustainable and threatens our economy.

While hospital spending makes up the largest slice of healthcare spending at 32 percent of all healthcare expenditures, drug costs have risen as a component and now account for 20 percent of that total. In addition, for all categories of healthcare spending tracked by the Alatarum Institute’s Center for Sustainable Health Spending, drug costs increased at the fastest rate, rising 12.1 percent from November 2014 to November 2015.

Many factors lead to this increased spending on pharmaceuticals. One is that the use of prescription drugs has grown dramatically. A recent article by Elizabeth Kantor in the Journal of the American Medical Association documented the increase in medication use from 51 percent of U.S. adults in 1999-2000 to 58 percent in 2011-2012. In addition, Kantor reported that polypharmacy—the use of five or more drugs—rose from 8.2 percent of U.S. adults to 15 percent over that same period.

Excerpts from The Rising Urgency to Rein in National Drug Spending. Health Data Management, February 5, 2016

Photo Courtesy of  Don Guerwitz Photography

Putting Interoperability on FHIR

February 1, 2016 Featured, Health IT No Comments
Putting Interoperability on FHIR

The release of the Office of the National Coordinator’s (ONC) Connecting Health and Care for the Nation marks a dramatic shift from focus on Meaningful Use to incenting all stakeholders to fix our interoperability problem.

While the HITECH act moved the nation’s providers to deploying electronic medical records, it failed to build a robust, reliable ecosystem that allowed the easy exchange among providers of up-to-date, complete medical information. This lack of interoperability leads to incorrect diagnoses, ineffective therapeutic plans, and unnecessary and costly duplicate testing.

In February 2014 Health Level Seven International – the standards organization that developed clinical HL7 messaging that is used universally to exchange medical data – published the draft standards for FHIR – Fast Healthcare Interoperability Resources. In December 2014, a broad cross-section of stakeholders came together to form the Argonaut project, a platform to accelerate the funding and political support for using FHIR as an interoperability standard.

HL7 developed FHIR to replace the complex Clinical Documentation Architecture (CDA), currently used to exchange medical documents, with a set of simpler, more modular, and interoperable data objects format. This approach allows healthcare organizations to identify, gather, and repurpose in real-time FHIR messages as they pass over a network.

Excerpts from Putting Interoperability on FHIR. Becker’s Health IT & CIO Review, January 27, 2016

Photo Courtesy of  Don Guerwitz Photography

Predicting the Future: What to Look for in 2016

January 25, 2016 Featured, Health IT No Comments
Predicting the Future: What to Look for in 2016

The role of a prognosticator is to accurately predict the future. Although many have tried to predict the trend of the stock market, an imminent earthquake, or even the end of the world, soothsayers rarely get their predictions correct. That said, they are very grateful that most people only remember the correct predictions and rarely if ever called to task for their incorrect ones. In this spirit, below are my predictions for 2016.

1. Internet of Things (IoT) Continues to Gain Interest but Not Much More

2. Politics Influences the Healthcare Conversation but the Industry Continues its Current Course

3. Provider Organizations Set the Stage to Effectively Leverage their EMRs to Enhance Clinical Care

4. CHIME’s Voice and Influence on Healthcare Policy Grows

5. Provider Industry Consolidation Continues but at a Slower Pace

6. HL7s Proposed FHIR Standard Opens the Floodgates for Healthcare App Development

7. Drug Costs Take Center Stage as the Obstacle Preventing the Slowing of Healthcare

Excerpts from Predicting the Future: What to Look for in 2016. Becker’s Hospital Review, January 20, 2016

Photo Courtesy of  Don Guerwitz Photography

Choosing the “Good Jobs” Strategy

December 7, 2015 Featured, PSQH No Comments
Choosing the “Good Jobs” Strategy

For more than half a century, provider organizations had a free ride. Unlike other industries that faced rapid disruptions in their markets requiring constant adjustment to survive, healthcare has been fairly stable and predictable. As provider organizations expanded services, governments and private industry paid the ever-increasing cost of supplying those services to their beneficiaries or employees. Now, as spending on healthcare passes 18% of GDP, costs matter.

Provider organizations that previously balanced budgets simply by raising prices or increasing the volume of services provided, face resistance to these revenue enhancing measures. As labor approaches 60% of hospital costs, many organizations look to decrease those costs to meet budgetary targets. These organizations are at a crossroads.

Zeynep Ton, a professor at the MIT Sloan School of Management, studied service industries to better understand the two labor strategies companies use to make money. In The Good Jobs Strategy (2014), she describes the “bad jobs” strategy as one that succeeds at the expense of employees. These jobs offer low wages, scant benefits, and erratic work schedules. Tey are designed to make it hard for employees to perform well or find meaning or dignity in their work. Companies that follow this strategy will do anything to keep prices low. Ton also describes a “good jobs” strategy where jobs provide decent pay, benefits, and stable work schedules. Employees can perform well, and finding meaning and dignity in their work.

Excerpts from Choosing the “Good Jobs” Strategy. PSQH, November/December, 2015

Photo Courtesy of  Don Guerwitz Photography

Using Patient Acuity to Drive Healthflow

December 7, 2015 Featured, PSQH No Comments
Using Patient Acuity to Drive Healthflow

While the options to reduce labor costs in healthcare reflect those available in other industries, choosing one path over another delivers significant secondary effects.

For example, reducing the number of technical support representatives available to provide telephone support to customers may increase on-hold wait times, but reducing nursing staff may lead to an increase in bedsores or higher hospital infection rates. In healthcare, the downstream impact of changes in staffing presents potentially dangerous and expensive outcomes.

To reduce labor costs, managers have just a few levers to work with:

  • Decrease staffing levels
  • Decrease average cost per hour of staff
  • Increase staff productivity

These approaches are easier to implement in industries such as manufacturing and retail. Many of us are familiar with organizations that lay off workers as demand for products decreases, or that replace experienced, higher-paid staff with less expensive employees. For example, the use of robots and information technology drove much of the increased productivity seen over the last two decades in the manufacturing sector. Healthcare, however, does not lend itself to such easy solutions.

Excerpts from Using Patient Acuity to Drive Healthflow. PSQH, September/October, 2015

Photo Courtesy of  Don Guerwitz Photography

Good Jobs or Bad Jobs

December 7, 2015 Featured, Health IT No Comments
Good Jobs or Bad Jobs

As labor approaches 60% of hospital costs, many organizations are looking to decrease these costs to meet budgetary targets. These organizations are at a crossroads. Do they follow the strategy path toward good jobs or bad jobs?

Zeynep Ton, a professor at the MIT Sloan School of Management, studied service industries to better understand the two labor strategies companies use to make money. In her book The Good Jobs Strategy she describes the “bad jobs” strategy as one that succeeds at the expense of employees. These jobs offer low wages, scant benefits, and erratic work schedules. They are designed to make it hard for employees to perform well or find meaning or dignity in their work. Companies that follow this strategy will do anything to keep prices low.

Ton also describes a “good jobs” strategy where jobs provide decent pay, benefits and stable work schedules. Employees can perform well and find meaning and dignity in their work. Despite spending more on labor than their competitors in order to have a well-trained, motivated staff, these companies generate profits equal to, or exceeding those of companies following the “bad job” strategy. In addition, they are also able to compete on price.

Following the path of the “bad jobs” strategy in retail delivers shoddy products and services. Although inconvenient and frustrating, the end results are mostly manageable. In addition, many consumers may overlook such service and product shortcomings to obtain the lowest price.

In the healthcare industry, delivering poor services may lead to chronic illness, increased morbidity, or even death.

Excerpts from Good Jobs or Bad Jobs. Becker’s Hospital Review, October 13, 2015

Photo Courtesy of  Don Guerwitz Photography

Working Collaboratively to Enhance the Patient Experience

December 7, 2015 Featured, Health IT 1 Comment
Working Collaboratively to Enhance the Patient Experience

Currently patient delivery relies upon an unreliable system formed from poorly integrated and highly variable human parts. To deliver superior patient experiences, professionals need to make changes in what they do and how they do it. In addition, all caregivers must think of themselves as part of a team delivering care rather than a sole actor in a series of clinical handoffs.

Porter, Pabo, and Lee in an article in Health Affairs presented some very innovative ways to improve primary care delivery by a redesign of the all patient delivery care processes. Their approach focused on delivering value for patients as defined as “patient outcomes achieved relative to the amount of money spent.”

The current movement to value-based reimbursement requires a shift from care organized around fee-for-service transactional encounters and services to one that meets a “defined set of patient needs over a full care cycle.”

The authors identified five key areas to transform care. They are:

  • Base primary care on patient needs
  • Integrate delivery models by subgroup
  • Measure value for each subgroup
  • Align payment with value, and
  • Integrate subgroup team and specialty care

Excerpts from Working Collaboratively to Enhance the Patient Experience. Becker’s Hospital Review, October 5, 2015

Photo Courtesy of  Don Guerwitz Photography

Living and Working in Two Worlds

December 7, 2015 Featured, Health IT No Comments
Living and Working in Two Worlds

In 1876, Alexander Graham Bell offered to sell his patent for the telephone to Western Union for $100,000. After careful consideration the company rejected Bell’s offer.

They replied that they could see no good reason why people would want to speak to each other through such a device considering the quality of the transmitted speech. Western Union believed using the telegraph represented a superior alternative since a person could easily send a clear and readable message to anyone in any city in the country simply by sending a messenger to the telegraph office with a clearly written message. Although we consider this shortsightedness amusing, it represents a bias we all share. The authors of The Gen Z Effect describe it this way:

“the future never comes fully formed. It is always disguised in a clumsy package that doesn’t comfortably fit the behaviors we are accustomed to.”

The authors went on to say:

“It’s human nature to initially place “new” technologies into old behaviors since we have no other frame of reference.”

Technology always arrives before the behaviors required to realize the potential of the technology.

The problem of accepting and integrating new technology repeatedly challenges us humans to adapt. While generations defined by age categorized these behaviors, technology is advancing so quickly that age no longer adequately describes behavior differences.

Accurately Predicting the Future

December 7, 2015 Featured, Health IT No Comments
Accurately Predicting the Future

Every major sports team utilizes predictive analytics to win games. Wikipedia defines predictive analytics as, “A variety of statistical techniques from modeling, machine learning, and data mining that analyze current and historical facts to make predictions about the future, or otherwise unknown events. In business, predictive models exploit patterns found in historical and transactional data to identify risks and opportunities.”

Currently more than 91 percent of hospitals utilize electronic medical records (EMR) thanks to funding from the HITECH act. In addition, more than 75 percent of HITECH act funding-eligible professionals use EMRs. This represents an extremely rich source of data available for predictive analytics work. With the recent digitization of medical equipment and the explosion in the use of “Internet of Things” devices such as Fitbits and smart scales, data scientists possess ever increasing data to apply innovative and newly developed analytical and statistical techniques. Lastly, the decrease in the cost of computing power and data storage allows for many more scientists to “crunch” data looking for nuggets of knowledge.

Excerpts from Accurately Predicting the Future. Health IT Outcomes. August 4, 2015

Photo Courtesy of  Don Guerwitz Photography

How to Keep Score

December 7, 2015 Featured, PSQH No Comments
How to Keep Score

In this age of Yelp®, TripAdvisor®, and Amazon®, product reviews greatly influence which items consumers purchase. Anyone who buys regularly online understands over time the validity of various product reviews and learns how to apply a personal algorithm to cut through to meaningful product information while ignoring prefabricated, biased content.

In addition to reviews, scoring systems provide a shortcut for evaluating a product or service by assigning a numeric value to the item. For example, wine critics employ a variety of scoring systems to evaluate wine. One system, created by the famous wine critic Robert Parker, uses a scale that ranges from 50 to 100 points. Of the 50 points up for grabs, 5 points are available for rating color or appearance, aroma and bouquet may be awarded 15 points, flavor and finish merit 20 points, and the potential for improvement—or aging—can earn the wine up to 10 points. The scores try to assign an overall value to the wine generated from the individual scores given to those four criteria. For someone interested in choosing a wine for drinking tonight, a wine with a 90-point score that reflects its higher aging potential may be an inferior choice when contrasted with a 88-point wine that is not as age worthy. If the consumer intends to drink the wine immediately, its age worthiness does not matter, and in some cases may be unpleasant to drink, as it often requires aging to become palatable.

If you think this scoring system appears misleading and a bit vulnerable to subjectivity, join the parade. Yet, wine shops price their wines based on this same unreliable scoring system, and we often purchase wine using this flawed information. Although it is obvious that the difference between a 90-point and 89-point wine is insignificant, and the higher-scored wine may potentially be inferior depending on our intended use, the price difference to the consumer for the higher-scored wine can easily exceed $30. Purchasing health information technology is obviously a riskier and more difficult decision than choosing a bottle of red wine for dinner.

Excerpts from How to Keep Score. PSQH, July/August 2015

Photo Courtesy of  Don Guerwitz Photography

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