The Value Proposition
Eight glorious months ago, my wife, Bridget, and I went to the hospital for the birth of our daughter, Livia. I remember the night clearly. It was a planned induction. Labor and delivery was quite busy, so we spent a few hours in the waiting area before our room was ready. Prominently displayed, a royal blue banner and crystal piece announced a Codman Award from the Joint Commission. Presented to only a few healthcare champions annually, this award represented a significant achievement in birth safety. I was proud to have Bridget (and Livia) there.
But had it not been for the Institute for Healthcare Improvement (IHI) Annual Forum’s plenary sessions earlier that year, I probably would have ignored the flashy cabinet, mistaking it for propaganda or a feel-good award that everyone receives if they are nice to Joint Commission inspectors. As it were, I recalled the IHI panel discussion where I had first heard the CEO of Seton Family of Hospitals describe dramatic reductions in the network’s rates of birth injury. Most contentious had been the elimination of elective labor inductions and C-sections at our hospitals before 39 weeks’ gestation.
Perhaps understandably, Bridget was not distracted by any of this. Eyes closed, she was trying to make it through one last uncomfortable night while resting sideways on four chairs pushed together. I knew better than to force the conversation. Two weeks earlier, we had a heated discussion about whether there was any reason to induce earlier for convenience (i.e. obstetrician and grandparents-to-be schedules).
A few months later, at a meeting of physician leadership in our network, the question of whether doctors could lead transformative improvements in care in our community was raised. Thinking back to the Codman Award, I asked an obstetrician if the birth-safety initiative had increased the leadership capacity of physicians.
The reply was quick. “Not really,” she said. “The physicians felt like they were just following some rules.”
Rules? Nobody wanted to bask in the glory of a project that greatly improved outcomes and reduced costs? As I sat in silence and tried to absorb the significance of the response, I was hit from the right with another revelation. A hospital executive in the group noted that this was a very unpopular initiative amongst administrators. There were now fewer feeders and growers populating our NICUs, and this significantly and negatively impacted the bottom line of the hospitals. NICU reimbursement, of course, is a cash cow.
Thus, it came as no surprise when my editor forwarded a recent New York Times piece (www.nytimes.com/2011/03/20/us/20ttnicus.html) on this very issue of overuse in NICU care. The article even profiled my hospital network in Austin, Texas. The drama in the story was the millions of dollars lost by hospitals, potential Texas Medicaid crackdowns on NICU care, and the move away from convenience care.
But a much more important point was missed … value.
The Only Goal
Simply stated, value in healthcare is quality outcomes divided by total costs of care. The real storyline here is that a multidisciplinary team within Seton has greatly improved the single most important metric in healthcare—value. The numerator is healthy deliveries. The denominator is total costs of care. Quality outcomes will drive costs lower, and maximizing this equation should be the only goal we work toward. And yet, routine discussions of how we achieve value are all but absent in our daily conversations.
