We talk a lot about value in healthcare these days. Most everyone in healthcare knows the infamous quality/cost equation: the lower the cost and the higher the quality, the higher the value. Seems like a pretty straightforward equation; there aren’t even any coefficients, factorials, exponents, or square roots. Just two simple terms: quality and cost. How complicated could that possibly be?
The problem with the value equation is not its complexity on paper but the reinforcing barriers in our healthcare system that have made it impossible to improve the value equation on a large scale. Despite millions of hard-working, well-intentioned people in the healthcare industry, quality continues to be variable at best, and cost continues to rise. Healthcare currently consumes nearly 18% of the U.S. gross domestic product, threatening other aspects of the American economy, notably education and other federally subsidized programs.
A series of articles published between The New England Journal of Medicine and the Harvard Business Review aims to discover and suggest solutions to the issues currently ailing the U.S. healthcare system.1 The first installment focused on how to improve value on a large scale. The authors discuss the major barriers to realizing the value equation, along with some propositions for overcoming these barriers on a large scale.2 Although all six barriers are extremely difficult to surmount, the authors argue that because they are all mutually reinforcing in the current state, all will need to be addressed swiftly, tenaciously, and simultaneously.
Outlined here is a summary of the proposed interventions, and how these can and will affect hospitalists.
Providers need to organize themselves around what patients need, instead of around what providers do and how they are reimbursed. This will entail a shift from individual, discrete services to comprehensive, patient-focused care of medical conditions. The authors term these “Integrated Practice Units (IPU),” in which an entire team of providers organize themselves around the patient’s disease and provide comprehensive care across the range of the severity of the disease and the locations in which that disease is best served.
For hospitalists, working in multidisciplinary teams will come as second nature, but this also will require hospitalists to enhance the flexibility with which they see the patients and provide services exactly as the patients need, rather than based on arbitrary schedules and conveniences. Many hospitalists are already involved in comprehensive specialty care of high-volume surgical conditions, such as total hip and total knee patients, who usually come with a relatively predictable set of co-morbid conditions, such as hypertension, diabetes, rheumatologic disease, or sickle cell anemia. The literature has clearly established the fact that high-volume specialty care centers can and do deliver higher value care (higher quality at lower cost), compared to lower volume, less “well-oiled” centers.
Providers need transparent and readily available information on quality and cost to move the value equation. As we all know, you can’t improve what you don’t measure. Hospitalists need to work collaboratively with their hospital systems to collect and widely report on quality and cost metrics for the patients they serve. These quality metrics should not only focus on those process and outcome measures that must currently be reported (internally or externally); hospitalists should seek out the metrics that really matter to patients, such as achieving functional status (ambulating, eating, being pain free), shortening recovery time (getting back to work, playing with the grandchildren), and sustaining recovery for as long as possible (relapse, readmission, reoperation).
Hospitalists should embrace the transparency of these metrics and encourage attribution of the metrics to individual providers or provider groups. Metric transparency stimulates rapid improvements and fosters goal alignment. Measurement and reporting of cost is absolutely essential in moving the value equation. Hospitalists should advocate for widespread transparency of the costs of tests, products, supplies, and manpower, and these should be freely and openly shared with patients and their families, to engage them in discussions about value.
Reimbursement for services should reflect the actual cost of the service and should be bundled. Many hospitalists are likely already involved in some demonstration projects around bundled payments for care across a continuum. Many CMS demonstration projects have focused on high-volume, predictable conditions (total hip arthroplasty, for instance) or high-volume, less predictable but costly conditions (such as congestive heart failure or COPD). Some large employers also are contracting with high volume hospitals to perform semi-elective procedures such as coronary artery bypass grafting, and sending their employees out of state to these centers of excellence. Most hospitalists are already at least conceptually comfortable with being held accountable for the cost and quality of certain patient types, including reducing unnecessary variation and spending and avoiding preventable complications.
Care should be integrated into a smaller number of large delivery systems, instead of a large number of small, “do-it-all” systems. These large systems have to actually work for the good of the patients, integrating their care and not just providing duplicate services in each location. Each center should be able to deliver excellent care in some conditions, not adequate care in all conditions. The more complicated, complex care should be delivered in tertiary care centers, and the more predictable, less heterogeneous care conditions should be addressed in lower-cost, community settings. Integrated systems can direct the right patients to the right location, to enhance both quality and cost.
On a related thread, healthcare systems need to focus patients on getting the right care in the right location and teach them to be less concerned about geography. In the days when hospital length of stays were routinely in the double digits, patients naturally opted to receive any and all care in a location close to their home and family. But now that hospital stays are generally in single digits, proximity to home is less important than good value of care, and healthcare systems need to steer patients to the best care delivery site, even if it is not near their homes. Some large employers have started reimbursing patients and their families for the cost associated with traveling to the correct site of care. With the availability of easy, low-cost travel options, this can and should be feasible for most patients and their families.
Information technology systems need to enable patient-centered care. Although this seemed to be the premise of EHRs, in reality, most have focused on enhancing billing, revenue, and documentation, rather than closely tracking the health, wellness, outcomes, and cost of individual patients throughout the care continuum. In the healthcare system of the future, the patient-centered EHR has to be readily accessible to all care providers, as well as to the patients themselves; it has to be easy to input and extract data; and it has to use common definitions for data.
Hospitalists would welcome such EHRs and should work tirelessly to achieve them within the healthcare system.
Although no single suggestion is wholly unappealing to the field of hospital medicine, accomplishing all of these quickly and simultaneously will be extremely challenging. It will take tremendous leadership and a bit of faith in the end goal. But the status quo is not an option, and current healthcare spending threatens the American Dream. Hospitalists can—and should—be pivotal in leading, or at least cooperating in, the achievement of this future-state, high-value healthcare system.
Dr. Scheurer is a hospitalist and chief quality officer at the Medical University of South Carolina in Charleston. She is physician editor of The Hospitalist. Email her at email@example.com.