What Is Your Value?


For those of you who attended Bob Wachter’s talk at HM11 in Dallas, you learned that Bob drives a particular model of a popular SUV made by a well-known Japanese manufacturer. When he was in the market for a vehicle, he decided he wanted to buy an SUV. He acknowledged there were certainly less expensive SUVs on the market, along with more expensive alternatives.

So why did he choose to purchase that particular model? Was it the color, the seat warmers, or the keyless entry system? The answer is simple: He decided to purchase the popular SUV because he thought it was the best value for his dollar.

I have this vision of Bob, head cocked to one side, with his index finger resting against his chin and a text bubble above his head reading, “What is the quality of this vehicle and what is the price tag?”

These are decisions all of us make in our everyday lives. I make the same value judgment when I pull into the gasoline station to purchase gas (regular or premium?) or when I go to the grocery store (brand-name or generic orange juice?). But we know that higher cost doesn’t always mean higher quality. Think American-made automobiles versus Japanese-made vehicles in the 1970s and ’80s.

Along those same lines, let’s think about the U.S. healthcare system in 2011. America is trying to move its healthcare toward a value-based system. How do we receive the best healthcare for the—many times taxpayer—dollar? I am a taxpayer and I am all for higher-quality healthcare for my dollars.

Payors will pay for hospitalists as long as they perceive value in their investment .. if we hope to achieve the same value. Higher costs mean we will have to increase quality (value=quality/cost ).

At HM11, I heard from many supporters of healthcare reform, but I also heard many people vilify the government’s efforts at reforming our healthcare system. Just about everyone agreed that the future is uncertain. The current healthcare system certainly values hospitalists. It is hard to argue with the facts. In less than 15 years, our healthcare system has created jobs for more than 30,000 hospitalists, the majority of whom require nonclinical revenue from hospitals to meet expenses. The latest SHM-MGMA data show that the average hospitalist full-time equivalent (FTE) receives more than $131,500 of nonclinical revenue (primarily from hospitals) annually.

Payors of healthcare are no different than Bob when it comes to purchasing a car, or me when it comes to purchasing orange juice. Payors will pay for hospitalists as long as they perceive value in their investment.

But what is the basis of this notion that hospitalists are high-value healthcare providers, and is it justified? At HM11, I heard about the continued rise in hospitalist salaries. Higher costs mean we will have to increase quality if we hope to achieve the same value (value=quality/cost).

Don’t Worry, Share Your Data

I have listened to many presentations about healthcare value, quality, and cost. My perception is that it makes the most sense if it is personal. I live in Massachusetts, and my state government has been aggressive at helping everyone understand the quality and the cost of care being delivered at our hospitals. For example, our state government generates a massive annual report that describes the quality and cost of healthcare being delivered at individual hospitals; a PDF of the report is available at www.mass.gov. (For full disclosure, I work at Beth Israel Deaconess Medical Center [BIDMC] in Boston and I serve on a Massachusetts Department of Public Health Stroke Advisory Committee.)

The annual report shows there is not as much of a direct relationship between quality and cost as one would like to see. But I applaud Massachusetts for producing this report. Recognizing and understanding a problem is the first step in creating a solution to the problem. One cannot create a value-based system without understanding the existing quality and cost.

This is one of the reasons why, several years ago, the BIDMC leadership posted my hospital’s quality data online for public consumption (www.bidmc.org/QualityandSafety.aspx). The BIDMC website even features a short video of hospitalist Ken Sands, MD, who also happens to be the vice president of quality at BIDMC, telling you about the hospital quality data. Before the hospital posted this data online, most of our hospital staff and providers, let alone our patients and their families, were unaware of the data. BIDMC is not the only hospital who does this. I understand Cedars-Sinai Medical Center in Los Angeles and Dartmouth-Hitchcock Medical Center in New Hampshire have long shared their quality data publicly.

But the truth is, if you look hard enough, you can find these data for just about all acute-care hospitals in the country. Start with Medicare’s Hospital Compare website (www.hospitalcompare.hhs.gov). However, BIDMC and others have simply made it easier to find the data by putting it directly on their websites.

Policy of Transparency

An interesting thing happened over the past decade at BIDMC. In 1997, there were no hospitalists who cared for BIDMC patients. Today, hospitalists manage nearly 100% of the patients hospitalized on our large medical service.

When you look at the data being reported by BIDMC and the state of Massachusetts about nonsurgical conditions, doesn’t that reflect the care being provided by the hospitalists who work at BIDMC? I imagine that is what will run through my CEO and CFO’s minds when we discuss the hospitalist budget this summer. They will ask themselves, “What is the value of our hospitalists? What is the quality of their care? How much do they cost us?”

Have an Idea for a Clinical Story?

Have a clinical conundrum you’d like us to investigate? Send your idea to Editor Jason Carris, [email protected], or Physician Editor Jeffrey Glasheen, [email protected].

Some of you might be in a similar position. Do your hospitalists now provide the bulk of the care at your hospital? Are your hospital’s data being publicly reported? I think the answer is a resounding “yes” for many of you.

Allow me to ask this question: What are you doing to collect data to understand the quality and cost of your hospitalist program? Wouldn’t you rather know this information before your hospital or state government tells you?

As the director of my hospitalist group, I spearhead our group efforts to better understand the quality of care we provide. This proactive, introspective approach is essential, especially if hospitalist groups around the country hope to continue being perceived as “high value” providers.

I am interested in hearing from you about your efforts to understand the care being provided by your hospitalists. Feel free to email me at [email protected]. TH

Dr. Li is president of SHM.

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