Health Policy in 2013: What It Means to Hospitals and Hospitalists

Health Policy in 2013: What It Means to Hospitals and Hospitalists Robert M. Wachter, MD Professor and Associate Chairman, Department of Medicine Chief, Division of Hospital Medicine University of California, San Francisco

Dominant Health Policy Trends Intense pressure on value Particularly cost Shift from individual to population perspective More insured patients with access to [fill in the blank] The wiring of the healthcare system

What Does This Mean for Hospitals/Hospitalists Fewer hospital beds/hospitals Better reimbursement/situation for PCPs Ubiquitous IT Changing delivery, monitoring, analysis, patient engagement Intense pressure for value More need for hospital/hospitalist alignment New fights over how to split the dollars

Why We re Being Pressured to Deliver Value

The Challenge That Will Dominate Your Career

Newton s First Law of Motion An object that is at rest will stay at rest unless acted upon by an external force. An object that is in motion will not change its velocity and direction unless acted upon by an external force.

When It Comes to Changing the System, Physicians Are Still At Rest Tilbert et al. Who is responsible for reducing healthcare costs? (A survey of 2556 US physicians). JAMA 2013

But That Is Wrong: Docs Decide Which patients are seen and how frequently Which patients are hospitalized Which tests, procedures, and surgical operations are done Which technologies are used Which medications are prescribed Emanuel EJ, Steinmetz A. Will physicians lead on controlling health care costs? JAMA 2013

Hospital Leaders Recognize Importance of MD Alignment Extremely/Very Important to Our Business Model in Next 3-5 Years Strategy Aligning with physicians to integrate them fully in clinical redesign efforts Aligning with physicians to preserve and expand market share Improving quality to take full advantage of P4P incentives such as CMS value purchasing Innovative deployment of health information technology across the continuum of care Redesigning clinical care processes using Lean, Six Sigma or other workflow redesign methods % Agree 98% 94% 92% 92% 88% KPMG/Harris Study

The CEO s (Old) Job The doctors brought in the patients, so the hospital s customer was the doctors You don t call your best customer onto the carpet for problematic behavior, whether it is: Disruptive Too expensive Poor quality The 99-1 vote But this is not a viable strategy in today s world

After We Sort Out the Incentives and the Motivation, What Then? Physicians are competitive overachievers Physicians are individualistic and prize their autonomy Physicians aren t entirely economic animals Physicians were taught to care for individuals, not populations or systems

Report Cards May Catalyze Action Average GPA of US medical school matriculants: 3.68

Culture is Local Safety Climate Across 49 Units in One Hospital Safety Climate Across 100 Hospitals Pronovost/Sexton, QSHC 2005

We Care Deeply About Our Relative Position My House Workers satisfaction with their income is negatively related to the amount to which they compare their income Actual Income Comparison Income Satisfaction $70,000 $100,000 Lower $65,000 $45,000 Higher Clark and Oswald. Satisfaction and comparison income. Journal of Public Economics 1996

After We Sort Out the Incentives and the Motivation, What Then? Physicians are competitive overachievers Physicians are individualistic and prize their autonomy Physicians aren t entirely economic animals Physicians were taught to care for individuals, not populations or systems

The core structure of medicine how health care is organized and practiced emerged in an era when doctors could hold all the key information patients needed in their heads and manage everything required themselves.we were craftsmen. We could set the fracture, spin the blood, plate the cultures, administer the antiserum. The nature of the knowledge lent itself to prizing autonomy, independence, and self-sufficiency and to designing medicine accordingly.

But you can t hold all the information in your head any longer, and you can t master all the skills. No one person can work up a patient s back pain, run the immunoassay, do the physical therapy, protocol the MRI, and direct the treatment of the unexpected cancer found growing in the spine. I don t even know what it means to protocol the MRI.

The Central Tension of Future Medical Practice Recent Are Please What you call some is your guidelines the kind CMO reason of for for suggest moron? deviation? approval

After We Sort Out the Incentives and the Motivation, What Then? Physicians are competitive overachievers Physicians are individualistic and prize their autonomy Physicians aren t entirely economic animals Physicians were taught to care for individuals, not populations or systems

Physicians (Like all Professionals) are Motivated by More than Dollars

Social vs. Market Transactions: The Israeli Daycare Center

When a social norm collides with a market norm, the social norm goes away for a long time Money, as it turns out, is very often the most expensive way to motivate people. Social norms are not only cheaper, but often more effective as well.

Does P4P Work Better Than Simple Transparency? The Jury is Out Werner R. et al. Health Affairs 2011;30:690-8.

After We Sort Out the Incentives and the Motivation, What Then? Physicians are competitive overachievers Physicians are individualistic and prize their autonomy Physicians aren t entirely economic animals Physicians were taught to care for individuals, not populations or systems

Individual Perspective Comes Naturally to MDs Training and socialization (Fuchs technological imperative ) Moral position as patients advocate (Levinsky s Doctor s Master ) Malpractice fears The weight afforded the unidentified life (e.g. Oregon s early rationing stumble)

Costs vs. Benefits: The Big Picture Benefits Marginal (or incremental) benefit Day 1 Day 2 Costs

What to Do Near the Flat Part Individual Perspective: Do this because benefit>risk of the Curve? Benefits? HELP! Societal/Population Perspective: Don t do this unless you ve paid for everything with better cost:benefit ratios Costs

A Resource Allocation Framework: Encircling a Population Benefits Costs

Many interventions are valuable for some patients even if, for the population as a whole, their cost is greater than their benefit. If the physician is paid on a fee-for-service basis and the patient has open-ended insurance, the scales are tipped in favor of doing as much as possible and against limiting interventions to those that are cost-effective. In that setting, who would benefit from the resources that are saved by practicing cost-effective medicine is not obvious to the physician. [However] when physicians are collectively caring for a defined population within a fixed annual budget, it is easier for the individual physician to resolve the dilemma in favor of cost-effective medicine. That becomes appropriate care. And it is an ethical choice, as defined by philosopher Immanuel Kant, because if all physicians act the same way, all patients benefit. Fuchs V. The doctor s dilemma: what is appropriate care? NEJM 2011

So, What Should We Do? Be comfortable w/ new arrangements that drive aligned incentives & population perspective Use comparative data: individual & group level Clinically meaningful, well presented Can look outside, but use mostly local comparators Begin w/ groups, emphasize positive (at least at first); later move to individuals, low performers Structured care protocols, forcing functions Standardize what can be standardized

So, What Will It Take? (cont.) Hospitalists (& all MDs) need new skill set QI/safety, Lean, teamwork, leadership Work to understand how IT is helping, and how it s not Must have an improvement and innovation methodology Do your share to promote alignment Organization needs to promote/reward MD engagement Welcome incentives, but be wary of stepping on professionalism and teamwork

Choluteca Bridge, Honduras Hurricaine Mitch, 1998