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Bacchus and Healthcare

Bacchus and Healthcare

Showing great wisdom, our mothers cautioned us to never judge a book by its cover. Yet, when we purchase wine, we often look for the fancy label design, interesting back label story, or colorful capsule covering the cork. That said, most wine drinkers use price as the most important indicator of wine quality. Surely a $100 wine must be better than a $15 bottle, otherwise why would the retailer charge more for it?

In the absence of understandable, easily accessible quality metrics, we utilize price as a surrogate for quality. Sure, we may search reviews looking to see if the pretty label represents a 90+ point wine, but in the heat of the moment in a restaurant we read the wine list right to left choosing a wine by its price rather than its pedigree. Frankly, most consumers employ this this approach when they purchase products where quality and value are difficult to judge or trusted quality information is unavailable.

As we move to value-based reimbursement models where price matters, linking quality to price becomes more important than ever. The passage of the Affordable Care Act (ACA) dramatically changed the healthcare marketplace and the economics driving it.

Excerpts from: Bacchus and Healthcare. PSQH, May/June 2014

Photo Courtesy of  Don Guerwitz PhotographyGauchos, Tupangato, Argentina

WhatsApp Lessons to Engage Patients

WhatsApp Lessons to Engage Patients

Information technology has achieved some amazing changes in consumer behavior. Over the last 20 years, companies have decreased their costs simply by transferring the work previously done by employees to consumers. For example, think about the last time you took an airline trip. You probably bought your ticket online through an airline or travel website. You printed your boarding pass at home, at the airport kiosk, or pulled it up on your smartphone.

If you checked a bag, you entered the data into the airport kiosk while the agent simply checked your government ID and placed the tracking tag on your bag before tossing it onto the luggage belt. Does anyone miss the paper folder we used to hold our boarding passes and itinerary?

If you reviewed the typical airport counter a decade ago, you saw more than a dozen agents working quickly to assist travelers. Today, just two or three agents hold court at the counter. Instead, you see busy travelers doing much of the work formerly done by those agents. Numerous other industries present a similar story.

Rather than think this consumer engagement only benefits the companies deploying the technology, consumers embrace these new processes because they also obtain benefits from doing so. While information technology assists other industries to reduce costs and improve processes by transferring some of the work to engaged consumers, healthcare lags in its use of information technology to similarly engage patients.

Excerpts from: WhatsApp Lessons to Engage Patients. PSQH, March/April 2014

Photo Courtesy of  Don Guerwitz PhotographyFishing in the Moat, Hue, Vietnam

At All Cost?

At All Cost?

During the dot-com boom in the late ‘90s, many new companies based their business plans on the volume of website visits. This revenue model assumed that by capturing the attention of users as measured by clicks on the company website, the organizations would generate wild profits; however; when these companies went public, they assumed very high valuations without generating revenue. These companies never thought through their business models, nor understood their real costs.

For more than a half century, the healthcare industry applied the same confidence in similarly flawed models. Volume-based reimbursement tied revenues to volume, so organizations that maximized volume, in turn maximized profits. There was little incentive to focus on costs because organizations just inflated their charges to account for what they calculated as a rough estimate of their costs. If their calculations proved wrong for a particular line of business, they just upped the fees the following year to make up for it.

Recent reports from New York State Health Department, detailed in a December 9, 2013, article by journalist Nina Bernstein in The New York Times, show how variable and out of control healthcare costs are. The report listed hospitals with their charges and costs for a variety of conditions from 2009 to 2011. According to Bernstein, prices ranged from an $8 bill for treating a case of gastritis (cost: $2) to a $2.8 million charge for a blood disorder case that cost $918,462.

Without even knowing the details of the case, it is hard to believe the $8 bill for gastritis is correct when the cost of the treatment was only $2 – same must be said for the blood disorder case.

How does an industry survive—and how can our society expect healthcare costs to be reasonable—when hospitals do not know their costs of production or reasonableness of the bills they send to patients and insurance companies? How do organizations realistically set prices, compete in the marketplace, and accurately plan for their own survival and growth?

Excerpts from: At All Cost. PSQH, January/February 2014

Photo Courtesy of  Don Guerwitz PhotographyProboscis in a Tree. Bako National Park, Sarawak, Malaysian Borneo

Our Tower of Babel

November 5, 2013 Featured, Health IT, PSQH No Comments
Our Tower of Babel

The Bible describes why humans speak so many languages:

The narrative of the city of Babel is recorded in Genesis 11:1-9. Everyone on earth spoke the same language. As people migrated from the East, they settled in the land of Shinar. People there sought to make bricks and build a city and a tower with its top in the sky, to make a name for themselves, so that they not be scattered over the world. God came down to look at the city and tower, and remarked that as one people with one language, nothing that they sought would be out of their reach. God went down and confounded their speech, so that they could not understand each other, and scattered them over the face of the earth, and they stopped building the city. Thus the city was called Babel.

Although this explains well why communication is so difficult among people from different countries, it fails to address the inability of our various healthcare information technology (HIT) systems to exchange patient data seamlessly.

Although God confounded our speech to prevent us from turning away from His teachings, there is no equally important reason that HIT systems today do not communicate.

During a presentation to healthcare CIOs at the recent CHIME13 Forum in Scottsdale, Arizona (Chaiken & Vengco, 2013), attendees expressed their belief that the lack of interoperability among HIT systems represents a substantial barrier to utilizing innovative information technology tools, such as social networking applications, to manage the delivery of patient care. Only after what they described as a miracle event – true interoperability – did attendees believe that these new technologies could be used effectively to impact the quality and cost of patient care.

It is time to focus on the value delivered to the patient and our community derived from universal, easily managed HIT interoperability. Such a capability promises to deliver improved patient care; fewer redundant, unnecessary tests; and more accurate diagnoses and treatments.

Excerpts from: Our Tower of Babble. PSQH, November/December 2013.

Photo Courtesy of  Don Guerwitz PhotographyStreetcorner Dentist. Hoi An, Vietnam

Evolving to Health 3.0

October 8, 2013 Featured, Health IT, PSQH No Comments
Evolving to Health 3.0

The dramatic shift to value-based reimbursement requires all providers to completely disrupt their care processes and workflows to ensure the delivery of high quality, safe care at a reasonable cost. For more than four decades these same providers thrived in an environment where providing more care easily generated higher prices and profits. In that former reimbursement model, a serious and dangerous moral hazard existed where the instinct to “do no harm” clashed mightily with a similarly powerful driver to maximize income.

Organizations that will survive under the new realities of ACA recognize the power of healthcare information technology (HIT) to assist them in reworking their business processes and clinical workflows to achieve the goal of high quality, affordable care. Effective approaches to change include leveraging recent HIT investments and the reinvigoration of legacy systems.

The era of Health 3.0 ushers in new, disruptive uses of HIT that leverage past technology investments to obtain maximum value from newly created technologies and digital trends. Health 3.0 pioneers the innovative use of information technology’s proved valuable in other industries to enhance the quality and safety of care delivery while delivering superior cost outcomes.

Excerpts from: Evolving to Health 3.0. PSQH, September/October 2013

Photo Courtesy of  Don Guerwitz PhotographyThe Mezquita. Cordoba, Spain

The Health Supply Chain

October 8, 2013 Health IT, PSQH No Comments
The Health Supply Chain

The shift to value-based reimbursement from volume-based reimbursement puts great pressure on organizations to obtain a detailed understanding of how and what resources they utilize to deliver care. Without a deep understanding of this issue, providers are unable to effectively manage care delivery and survive an environment of declining reimbursement.

Other industries focus on the supply chain to efficiently manage production and the delivery of products to customers. Although healthcare organizations similarly focus on the supply chain, they focus solely on tangible products utilized to deliver care to patients.

The Health Supply Chain model provides a broad, all-encompassing view of care delivery that links both administrative and clinical processes and workflows in the “manufacture” of patient care. This analytical approach assigns responsibility for the clinical and financial outcomes of patient care to all members of a provider organization, rather than dividing responsibility between administrative and clinical functional units.

The Health Supply Chain model affords a valuable framework for organizations to begin to understand their care delivery process and the costs of care.

Excerpts from: The Health Supply Chain. PSQH, July/August 2013

Photo Courtesy of  Don Guerwitz PhotographyThe Alhambra Under the Sierra Nevada. Granada

American Autos Circa 1970 and Healthcare

July 24, 2013 Health IT, PSQH No Comments
American Autos Circa 1970 and Healthcare

The Ford Pinto was a really terrible car. The gas tank was positioned such that, in a collision, protruding differential bolts would puncture the tank, leading to frequent car fires. This defect led to the death of more than 27 people and many others maimed. Cars made in the United States in the 1970s and 1980s were poorly designed, cheaply assembled, and reliably unreliable. Rather than designing for quality, American manufacturers relied on fixing problems after assembly. Is it any wonder that consumers soon abandoned these terrible cars and purchased Japanese models instead?

Japanese manufacturers followed the quality rules created by W. Edwards Deming in their pursuit of the U.S. car-buying public. Deming’s principals allowed Japanese companies to manufacture high quality automobiles at lower costs and with fewer defects than their American counterparts.

With the rapid shift from volume-based reimbursement to value-based reimbursement, organizations must change the way they deliver healthcare, with Deming’s quality rules offering clues as to what needs to be done. In the 1970s, U.S. automakers fixed defects in their cars after they rolled off the assembly line.

This approach to healthcare—fixing defects, not measuring quality, ignoring processes, and shunning transformation and change—cannot survive the new realities inherent in the shifting of reimbursement rules. Perhaps a few of Deming’s 14 key principles for transforming business effectiveness can provide a roadmap for what our organizations need to do to prosper in the years ahead.

Excerpts from: American Autos Circa 1970 and Healthcare. PSQH, May/June 2013

Photo Courtesy of  Don Guerwitz PhotographyWindow Watcher. Tibetan Kingdom of Mustang, Nepal

The Eyes Have It

April 12, 2013 Health IT, PSQH No Comments
The Eyes Have It

No matter what technologies are used, the end goals for any organization are adoption and behavior change to achieve desired clinical and financial outcomes. Well-designed workflows that satisfy the needs of users lead to high levels of adoption of information systems. High levels of adoption that do not facilitate behavior change replicate systems and the undesirable outcomes achieved before technology deployment. Therefore, techniques that encourage behavior change, such as clinical decision support tools and performance scorecards, must also be embedded seamlessly in the clinical workflow to be effective.

Tools exist for achieving effective clinical workflow, although we continue to learn and refine best practices. Throughout the 1990s, payers employed clinician profiling reports or scorecards in an attempt to identify outlier providers and effect change in clinician practice patterns. Few of these efforts proved successful due to problems with data sources and the delivery and content of the scorecards.

With the expansion in the use of electronic medical records, the data source for scorecards that can influence clinician behavior moves to a much more robust data source, a data warehouse populated with clinical information gathered from multiple clinical systems. In addition, analytical tools now exist that can easily comb through enormous data sets and generate insightful results presented in attention grabbing, meaningful graphics.

Excerpts from: The Eyes Have It. PSQH, March/April 2013

Photo Courtesy of  Don Guerwitz PhotographyAt the Catania Market, Sicily, Italy

We Know What to Do

January 18, 2013 Health IT, PSQH No Comments
We Know What to Do

Almost eight years ago Richard Hillestad and his colleagues from the Rand Corporation predicted that electronic medical record systems (EMRs) would generate cumulative efficiency and safety savings of $142 to $371 billion during a 15-year period, an average of $81 billion annually (Hillestad et al., 2005).

Just seven years later, Arthur Kellermann and Spencer Jones from Rand revisited Hillestad’s work and concluded that the increase use of health IT made the quality and efficiency of healthcare only marginally better. At the same time, yet, aggregate expenditures on health care in the United States have grown from approximately $2 trillion in 2005 to roughly $2.8 trillion today.

This Kellerman report evaluates four assumptions made in the original article by Hillestad and attributes the shortfall in observed versus projected results to shortcomings in four areas. Hillestad assumed the following in making his projections: 1) robust interoperability and interconnections of health IT systems, 2) wide adoption of health IT systems by clinicians, 3) effective use of health IT systems to impact care, and 4) changes in incentives and reimbursement systems that emphasized quality rather than revenue.

No surprises here. Anyone who toils in the health IT field knows that these four items represent the key challenges that we all work to overcome as we deploy our health IT applications. Counter to the pessimistic view that the billions of dollars spent on EMRs and other health IT systems are wasted resources, these investments offer a powerful force that, when the conditions are right, will significantly impact quality, safety, and cost.

Excerpts from: We Know What to Do. PSQH, January/February 2013

Photo Courtesy of  Don Guerwitz Photography Temple Ruins. Sanka, Nam Belu River, Myanmar (Burma)

‘Show Me the Money’ Revisited

‘Show Me the Money’ Revisited

In the immortal words of Ronald Reagan, “There you go again.” Something that can be explained simply is twisted to look infinitely complicated with plots and subplots that would make J.K Rowling proud. The recent controversy over the use of EMRs to increase reimbursements to providers suggests intrigue, fraud, and bad intent. In contrast, if you learn how the money flows, you will better understand the true reasons for the outcomes seen in organizations using EMRs.

A New York Times report published in September 2012 documented an increase of $1 billion in Medicare reimbursements in 2010 over the amount paid five years earlier. The report partly attributed this payment increase to changes in billing codes assigned to patients in emergency rooms.

Such stories send shivers through the EMR community. To date, hospitals, EMR vendors, and the government struggle to demonstrate the value of EMRs in enhancing patient care and delivering cost savings. With billions of federal dollars earmarked to payment incentives for the use of EMRs, government officials anticipate some kind of return on this investment. Government EMR advocates did not expect to see an increase in reimbursements by public and private payors to providers through “enhanced” billing practices (code optimization [legal] or code maximization/up-coding [illegal]) activities.

Compared to paper records, EMRs allow for more rapid and complete documentation. In addition, EMRs slow the documentation process. Wait, how can EMRs both speed up and slow down documentation? It all depends upon deployment of the EMR and the constructed documentation workflows.

Unfortunately, EMRs focus on two important objectives at the same time– 1) facilitate clinical documentation to deliver patient care, and 2) facilitate clinical documentation to optimize coding for reimbursement. Documenting for patient care does not closely parallel documenting for reimbursement. As long as reimbursement is tied to documentation, EMR documentation workflow will suffer from inefficient documentation workflows, inaccurate documentation of care from global templates, and accidental (or deliberate) upcoding for reimbursement.

Excerpts from: ‘Show Me the Money’ Revisited. PSQH, November/December, 2012

Photo Courtesy of  Don Guerwitz Photography – Daybreak at the Ganges, Varanasi, India

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