The Need for Real ROI

Bob Wertz, August 30, 2017

Providers continue to face revenue pressures and need to demand measurable performance from themselves, their partners, and their vendors.

This article first appeared in the September 2017 issue of HealthLeaders magazine.

At our Population Health Exchange, an invitation-only gathering of healthcare leaders this summer, an executive with one of the event sponsors commented to me that his takeaway from providers is their need for real ROI. They are focused on return on investment, he said, and will be pushing vendors for more explicit information in this area.

Certainly, Exchange members were circumspect regarding the financial implications of population health and other industry trends.

Providers continue to face revenue pressures, so they need to demand measurable performance from themselves, their partners, and their vendors. As the industry's care and reimbursement models are refocused on value, new technology—especially artificial intelligence—can play an important role. 

But after years of high-cost tech spending with sometimes-dubious bottom-line value, leaders need to be prudent—but not timid—when it comes to AI. 

"It's appropriate to be cautious. I certainly am," says Isaac Kohane, MD, PhD, in the cover story for the September HealthLeaders magazine.

But Kohane, Marion V. Nelson professor of biomedical informatics and chairman of the department of biomedical informatics at Harvard Medical School, says AI will be unlike the EHR experience. "This looks different. This will be adopted because it gives productivity and financial gain and accuracy right away when you implement it, as opposed to the promissory note around EHRs, which has not yet really shown itself to be robust." 

Some early adopters of healthcare AI are realizing improvement, but the adoption is controlled.

In our cover story, Todd Stewart, MD, vice president of clinical integrated solutions at St. Louis–based Mercy, explains that while an EHR rollout called for large up-front spending, AI investment can be done step-by-step, with a smaller financial outlay, and a focus on early results and learning.

At Mercy, which reported 2016 operating revenue of $5 billion, AI algorithms are tracking invoices and forecasting monthly inpatient and outpatient claims and collections. "We've gone from 70% forecasting accuracy to greater than 95% accuracy in a few weeks," says Stewart. He also estimates that improved insights through AI are creating savings of $14–$17 million tied to Mercy's clinical pathways in fiscal year 2016.

Stewart insists that AI investment is essential. "If you are not adept in this space, you are not going to be competitive in the very near future."  

Artificial intelligence holds the promise of unleashing the potential of data stored in electronic systems and offering insights to help leaders improve clinical and financial outcomes.

A renewed emphasis on real ROI will help leaders embrace the future while respecting the realities of today's challenging healthcare environment. 

Metrics Supporting Mission

Bob Wertz, July 31, 2017

Particular metrics will vary based on the individual circumstances of an organization, but it is important to track data and employ meaningful analysis of that data.

This article first appeared in the July/August 2017 issue of HealthLeaders magazine.

In any business, there are universal ways of measuring success: Top line revenue and bottom line results are essential metrics. In today's healthcare industry, there are a variety of factors that impact fiscal health.

The July/August HealthLeaders magazine is devoted to exploring the new metrics that matter to healthcare leaders. Our staff has interviewed individuals throughout the C-suite to learn where they are focusing.

You'll read about executives who track patient volume, admissions, and a "reputation radar." Others watch access metrics, such as patient wait times and abandonment rates, or call center engagement and problem resolution. Patient satisfaction, employee morale, IT security, and many more are mentioned.

Marc Harrison, MD, president and CEO of Intermountain Healthcare, focuses on metrics associated with customer service. "I'm more interested in access than just about anything because we can't make people better if they can't get in to see us," he says.

Alan Murray, president and CEO of CareConnect, the insurance arm of Northwell Health, tracks customer-focused communication metrics. "You shouldn't have to figure out who to call—we should figure out how to solve the problem. So we're continuously monitoring call logs, call handle time, abandonment rate, and Web chat email communications. However you want to communicate with us, we will adapt."

At the HIMSS conference earlier this year, I spoke with some vendor executives to get their take on what metrics providers should be watching.

Daniel E. Johnson, executive vice president of healthcare strategy at Experian Health, suggests two patient-related factors: out-of-pocket costs and patient engagement innovation.

"I think that providers should pay attention to patient out-of-pocket amounts carefully because those may change as the Trump administration looks to pull back some of the subsidies. This means that the government will pay for less of the overall bill and for certain patients, it will likely mean an increase in out-of-pocket expenses.

"Given this potential change in policy, providers must be sure that they're able to deal with collecting money effectively from people. Especially considering that 15 years ago, collecting money from patients wasn't a big priority for office staff. So, there's going to have to be a shift in focus."

Johnson also notes the connection between digital access and access to care.

"Why is it that we don't check in for appointments on a mobile app for visits? We're moving toward that now because consumers are demanding it. Everything we do seems to be on a mobile device. This should be a priority for providers, as consumers will be looking for these types of conveniences as they shop for healthcare services. Most patients want to easily interact with their provider via their mobile device or over the web."

Jason Williams, vice president of analytics & growth strategy at Change Healthcare pointed to the need to drill down into the data that is collected as a way to discover the outliers.

"Organizations usually know which metrics are critical. I would emphasize the data cuts underneath. So what I mean by that is the sorting of the data that says how those metrics stack up by payer or by user, or your registration person or your biller, or by physician in some cases if it's relevant," he says. "The outliers have a disproportionate impact on your performance."

"If you don't shine the light in the darkest place, then you don't really react to the biggest part of the opportunity to improve. So I think it's not necessarily just the metric, but the cuts underneath that trigger specific actions based on expected thresholds."

He also stresses that the analysis of data should be done by someone with specialized knowledge of the area being measured. "It should never be the case that someone outside of your team has primary responsibility for analyzing, assessing, and reacting to your performance."

"When you have a silo of IT or of data analytics people and they've got to learn 'why?' as they're generating data, that creates frustration. If there is a cross-functional island of data people out there, then they're not acutely helpful if you've got to always have iterations to teach them what you are trying to accomplish."

Of course, as important as data is, it is not everything. "Everything boils down to metrics, but I'm always cautious that they tell you a story but not the whole story," says Nancy Howell Agee, president and CEO of Carilion Clinic. "You also have to tune into what's really happening to your patients and staff. Data is not the intelligence. What else do you need to know?"

The particular metrics will vary based on the individual circumstances of the organization, but it is important to track data—and employ meaningful analysis of that data—to develop a system where the metrics support the mission.

Determining Costs, Delivering Value, and Solving Problems

Bob Wertz, June 1, 2017

You can’t solve a problem until you first acknowledge it.

This article first appeared in the June 2017 issue of HealthLeaders magazine.

Just 6% of healthcare leaders say their organization is able to determine the true cost of providing care for all the care they deliver, according to the survey in our June Intelligence Report. That sounds grim—and clearly there is room for improvement. But let’s be clear: Healthcare may be a multi-trillion-dollar industry, but providers are not producing widgets; they are caring for patients, unique human beings.

Yes, leaders are obliged to reduce variation and increase efficiency, and clinicians must embrace evidence-based care, but that should not come at the expense of the individual patient. Different circumstances will come into play—especially in the context of
personalized medicine and social determinants—and those should not be dismissed out of hand. 

Still, as industry leaders gradually abandon a fee-for-service production model in favor of a value-based system that focuses on clinical outcomes, they do need to get a better grasp on costs.

Results of our Intelligence Report on Cost and Revenue Strategies also show that fewer than one-third of leaders, just 30%, say they can determine the true cost of care for most of the care delivered, and another 51% are able to do so for some of the care they provide.

Chad A. Eckes, MBA, executive vice president of corporate services and chief financial officer at Wake Forest Baptist Medical Center in Winston-Salem, North Carolina, served as lead advisor for the report. He says leaders need to manage organizational culture as it relates to cost and transparency. 

"The biggest thing is getting people to standardize their approach to doing things and realize that cost management and reducing some of the waste is as important as the rest of their job," he says, outlining key elements to achieving cost transparency: "Having the pure, raw financial data, then having analytic systems that are able to drill down to the process level and look at it from an activity-based costing perspective, and then being able to do the same view, but at a service-line level."

Eckes also references a classic adage: "One of our key focuses is you can’t manage what you can’t measure, and we had to put those measurement systems in place."

While leaders concede that they are not yet effective at determining the true cost of care, our survey also shows that 58% recognize that lack of data on the true cost of care is among the top three barriers their organization faces in achieving sustainable cost reductions. Another adage: You can’t solve a problem until you first acknowledge it. 

Ready or Not, Leaders Prepare for a Value-Based Future

Bob Wertz, May 9, 2017

The future of the healthcare industry may be uncertain when it comes to Congressional action, or the lack thereof. But one concept that has been widely embraced for the past few years is the commitment of healthcare leaders to a value-based model for care and reimbursement.

This article first appeared in the May 2017 issue of HealthLeaders magazine.

Whether your politics lean left or right, there is near-universal agreement that fee-for-service, absent clinical and financial accountability, is untenable.

In our pre-inauguration Healthcare in the Trump Era survey of 535 healthcare leaders, only three people cited elimination of pay-for-performance and value-based purchasing in an open-response question that allowed them to cite the one government regulation they would kill if they could.

A similar mood was evident in late February at the HIMSS conference in Orlando. Executives with whom I spoke expressed confidence that the move to value-based care is here to stay.

Daniel E. Johnson, executive vice president of healthcare strategy at Experian, said that the megatrends in the industry are still moving forward. “For example, this move from fee-for-service to value-based care: That we don’t see being interrupted by the new administration.”

Likewise, OptumInsight CEO Bill Miller notes that payers and providers are investing in value-based efforts and won’t want to “put the genie back in the bottle” as the industry moves away from fee-for-service. From a value and consumerism perspective, he says, “if you’re the only one that wants to go backwards, and the rest of the industry’s going forward, you’ll die.”

In our May Intelligence Report, highlights of which appear in the current HealthLeaders, the data reveals that leaders have a positive appraisal when evaluating their organizations’ level of strength in preparing for value-based care. Nearly three-quarters say that their level of strength is very strong or somewhat strong for overall preparation for both value-based care delivery changes (73%) and value-based financial changes (72%).

But Pamela J. Stoyanoff, MBA, CPA, FACHE, executive vice president and COO at Methodist Health System in Dallas, and Lead Advisor for the Intelligence Report, offers a caution: “People think that they’re ready for value-based care, but based on some of the other survey results, I’m not sure they are.”

Indeed, while overall preparation gets high marks, the performance ratings for individual competencies reveal considerable variation. Only 47%, for example, characterize their longitudinal patient care as somewhat or very strong, and just 28% describe their staff’s actuarial skills for financial risk assessment that way.

The commitment is there, which is essential; the competency is mixed, which, at this stage, is to be expected.

Culture Matters

Bob Wertz, April 1, 2017

We all understand that money matters. In healthcare, the no margin, no mission maxim is a succinct way of emphasizing the essential need for financial performance if the core goal—delivering on a healthcare mission—is to be achieved.

This article first appeared in the April 2017 issue of HealthLeaders magazine.

That particular mission may vary from one place to another, but in each case, the organization's culture will play a critical role in determining the clinical and financial success.

Now, some may dismiss culture as a squishy concept, but it can have real financial consequences, and we see that in this month's cover story by Senior Nursing Editor Jennifer Thew, RN.

Thew examines the impact of clinician burnout, a phenomenon that, if ignored, can be costly. "One thing burned-out doctors reliably do is leave the practice. When people leave, it costs a quarter of a million dollars to replace them," says Mark Linzer, MD, FACP, director of the division of general internal medicine at Hennepin County Medical Center in Minneapolis.

It might be easy to dismiss the issue and place the responsibility solely on the individual; but Cynda H. Rushton, PhD, RN, FAAN, the Anne and George L. Bunting Professor of Clinical Ethics in the Berman Institute of Bioethics and the School of Nursing at Johns Hopkins University in Baltimore, says burnout is a leadership issue.

"It's a signal that something is off-balance. We don't get burned out because we failed. It's because we've been trying so hard to address issues, some of which are not solvable in our skills and resources and abilities," Rushton says. "I think leaders have to really take stock of the organizational processes, policies, and structures that are contributing to burnout and to allocate resources to support diverse strategies for clinician well-being, recognizing that one size doesn't fit all."

Linzer and a team of researchers identified three categories of effective interventions that place the onus on the organization—workflow redesign, communication improvement, and quality improvement projects. A culture that demonstrates concern for employees will address such matters. The impact: "How you organize and how you manage your personnel and how much you let it just be random motion will determine the difference between a hectic, chaotic place and a well-organized one," Linzer says.

Executives define and shape the organization's culture, but they also need to dedicate the resources to support the tools and programs that will nurture that culture. Ultimately, a positive culture will contribute to positive outcomes for the organization's margin and mission.

Leadership: Moving the Needle

Bob Wertz, March 1, 2017

Is every problem solvable? It's easier to move the needle on some challenges; others have elements of difficulty or complexity that impede the successful development and implementation of a solution.

This article first appeared in the March 2017 issue of HealthLeaders magazine.

Sometimes, point of view comes into play. In our Healthcare in the Trump Era survey, for example, 25% of healthcare leaders say government-funded universal single-payer healthcare represents the best solution for the healthcare industry. But the 38% of their colleagues who say consumer-directed healthcare is the best approach are not likely to abide the single-payer solution.

Despite the complexity of the nation's public-private patient-provider-payer structure, many of the challenges facing the industry are solvable. The approaches to the problem and the elements of the solution may vary, but the common factor in success is leadership.

Jennifer Gentry, MSN, RN, NEA-BC, is chief nursing officer at two CHRISTUS Spohn Health System hospitals. As an advisor to our March Intelligence Report on Nursing Excellence, she notes that leadership development can go a long way in addressing challenges.

The report, highlights of which appear starting on page 21, features results of our survey that includes a question on the top three nursing challenges.

Nurse retention, cited by 61%, tops the list, and is closely followed by nurse recruitment at 59%. Next come nurse engagement at 35% and nurse leadership development at 33%. Gentry finds the order to be, well, out of order.

"If we don't do strong nurse leadership development, then we're shooting ourselves in the foot when it comes to retention, recruitment, and engagement because those frontline nurse leaders, they're the key to all these things," she tells Senior Research Analyst Jonathan Bees.

That is an interesting perspective: The first step in solving problems is to facilitate the development of effective problem solvers—the leaders. This would include executive leaders, of course, but must not neglect the frontline leaders. Executives need to encourage leadership at all levels, and empower staff to help shape solutions. 

The frontline leaders, Gentry says, are the ones who will "create the unit that the nurses want to be on—that strong work environment, those good work relationships, the teamwork, the engagement, the input."

One such frontline engagement effort aimed at promoting a culture of mentorship, teamwork, and professional development at CHRISTUS—the RN Ambassador program—has helped boost retention among nurses with fewer than two years on the job to 89%, up from 65% a year earlier.

That's moving the needle.  

Industry Status Check: Confidence and Concern

Bob Wertz, February 1, 2017

Two recent HealthLeaders Media surveys reveal data that suggests reasons for both confidence and concern.

This article first appeared in the January/February 2017 issue of HealthLeaders magazine.

Our 2017 Annual Industry Outlook Survey shows that 83% of leaders have at least some level of commitment to a transition from fee-for-service to value-based care, which is encouraging. Still, even among the 66% of organizations that are fully committed and underway with such efforts or that are engaged in experimental or pilot programs, only 18% of their net patient revenue comes from value-based models.

Within three years they expect that to jump to 44%, which would demonstrate continued progress, but that still leaves a majority of revenue coming from fee-for-service models. Payers and providers have work to do in developing workable models that reward quality outcomes. 

The federal government plays a significant role in regulating and influencing the industry, and healthcare leaders are almost evenly split on whether they see the incoming Trump administration as positive/very positive (41%) or negative/very negative (37%) for the industry. Ten percent expect a neutral impact, and 13% don't know what to expect. The results are from Healthcare in the Trump Era, a survey by HealthLeaders Media that was taken in December 2016 as part of our series "Shaping Healthcare's Future: The Trump Transition."

There is consensus, however, on several key issues. Regarding the Patient Protection and Affordable Care Act, only 7% say the best option is to keep it as it is; another 27% favor repeal and replace; but a majority, 66%, advocate making changes to the existing law. 

Most respondents, 65%—including 73% of those who see a Trump administration as positive and 69% who see it as negative—call for reducing regulations, but within reason, noting that some regulations are needed.

There is enough concern among healthcare leaders that half of all respondents say they are putting some strategic plans on hold until they know more about the Trump administration. 

Our survey asked leaders to name one regulation they would like to see eliminated, and there was no clear majority response to the open-ended question. Nearly one in 10 suggested eliminating the individual mandate and tax penalty (9.7%), while a similar number (9.4%) responded more generally, citing a need to simplify and reduce provider documentation regulations.

Industry leaders must help shape the future, rather than just waiting to see what happens under a Trump administration and a Republican-controlled House and Senate. They need to make clear to policymakers which provisions of healthcare law need to stay, which need to go, and which need to be revised.

Trump logo

Regulatory Wish List: Which Rules Would Healthcare Leaders Eliminate?

Bob Wertz, January 24, 2017

The individual mandate tops the list of regulations that healthcare leaders would eliminate, followed by a general appeal to simplify and reduce provider documentation regulations, according to the Healthcare in the Trump Era survey.

This is part of a series covering the Shaping of Healthcare's Future in the Trump era.

President Donald Trump said Monday that he aims to cut regulation "massively… by 75 percent, maybe more."

It will be tough for the White House to decide what to cut. There are so many healthcare rules that industry leaders asked to identify a single governmental regulation they would like to eliminate were not able to coalesce around just one.

Results from Healthcare in the Trump Era, a new survey by HealthLeaders Media, include feedback from 350 healthcare industry leaders on the most onerous regulations.

The largest share of respondents, 10%, selected a regulation that does not directly impact providers: the individual insurance mandate and tax penalties. Next, at 9%, was a general plea to simplify and reduce provider documentation regulations, followed by 8% who cited a mix of rules related to payers, such as eliminating bundled payments or closed networks.

Some of the favorite targets of criticism also are cited for elimination: meaningful use and EHR-related regulations (4%); the three-day hospital stay requirement for SNF Medicare coverage (3%); the two-midnight rule and observation status regulations (3%). Another 3% said there were too many to pick just one.

Here's a sampling of some of the open-ended comments from healthcare leaders, which were used to compile the categories and percentages listed in the survey report:

  • The Two-Midnight rule has created significant confusion and increased costs within the medical community. The rule was poorly implemented, inconsistently enforced, and much like the ACA, has required multiple changes and clarifications.
     
  • All-cause readmission penalties should be eliminated because it doesn't make sense to punish a healthcare provider for not predicting the future accurately.
     
  • Change the focus of HCAHPS scores to realistic expectations. As they stand now, the pain questions have led to much bigger problems with patients feeling they have a right to extreme measures to control pain and this has increased the distribution of pain medications and increased abuse of prescription pain medications.
     
  • Government has no business telling us in the healthcare business what to do and how to do it when they can't take care of federal healthcare for vets nationwide.
     
  • Make meaningful use more meaningful. Who cares if a patient is signed up for a portal if they are getting appropriate care?
     
  • Imposing the 30-day readmission penalties for mental health patients is both ludicrous and potentially damaging to an already faltering mental health system.
     
  • Some of the payment rules for certain providers are so stringent that it is hard to envision population health management working while still being able to keep our doors open. There should be more compensation for keeping our patients out of the hospital than there is for having them in the hospital.

Among the 2% of respondents who said they would not eliminate any regulations, here are some comments:

  • I do not think governmental regulations on healthcare are the problem. I think managed care organizations and private insurance policy "obstacles" are the problem.
     
  • We need everyone in the insurance pool and EHR with seamless information-sharing but with privacy. We need risk-based payment, etc. I can't think of any regulation that should be eliminated.

Despite the clear objection to many healthcare regulations, the survey results also reveal that most leaders (65%) want the Trump administration reduce healthcare-related within reason, noting that some regulations are necessary.

One in five (20%) want greater regulatory reduction, citing that most are unnecessary and burdensome. Only 15% say they would not reduce regulations, because most are necessary.

Clearly, healthcare regulation is complex and extensive. And now is the time for healthcare leaders to express their concerns to legislators and regulators, who are currently embarking on some significant changes.

Shaping the Future

Bob Wertz, December 1, 2016

Setting a solid healthcare business strategy is much easier if you have a good sense of what lies ahead for the industry.

This article first appeared in the December 2016 issue of HealthLeaders magazine.

Next month, the nation will have a Republican president, Senate, and House of Representatives, and after nearly seven years on the books, the future of the Patient Protection and Affordable Care Act appears to be short; but what comes next is uncertain.

Candidate Donald J. Trump declared that he would see to it that the law is repealed and replaced. President-elect Trump is softening that message somewhat and promising that key elements of the law will be preserved.

Details remain elusive. But healthcare leaders have been here before; after Barack Obama was elected in 2008, the nation and the industry realized that a new approach to healthcare was likely. And despite a common goal that healthcare should be about serving the patient, individuals differ in the best way to achieve that goal.

The healthcare industry is hardly monolithic. In September and October of 2008—before the election—HealthLeaders Media surveyed healthcare leaders, asking which model offers the best hope for healthcare. The results revealed no dominant response. Consumer-directed healthcare was the top response, with 33.6%; next was government-mandated universal health insurance at 25.1%, followed by government-funded universal healthcare at 21.9%, then employer-sponsored healthcare at 9.9%, and other at 9.5%.

In September 2011, some 18 months after PPACA was enacted, we again surveyed healthcare leaders and again found division: 53% said they supported PPACA and 47% said they did not; 41% said the law should be repealed and 59% said it should not be repealed. Still, 75% said that some elements of PPACA should be repealed.

Two years later, in October 2013, we asked leaders to assess the current state of the healthcare industry, and the results were hardly encouraging: 31% right track, 39% wrong track, and 31% undecided.

There is division. But division need not lead to conflict.

The path ahead will remain unsettled for some time, and that makes for a more challenging period for healthcare leaders. But forward-thinking people can work together for a common goal and a common good. In healthcare, which certainly is a complex industry, the ultimate aim—the health and wellness of the patient—is a simple concept.

Industry leaders need to help shape the future by reaching out to their elected representatives to stress what elements should or should not be a part of national healthcare law, and the aim should be to develop a sustainable model that won't be subject to the next election.

Playwright Eve Ensler's Latest Work Offers Lessons for Healthcare Leaders

Bob Wertz, May 23, 2016

In the world premiere of a one-woman play, the author of The Vagina Monologues offers insights on the importance of patient experience and more.

In her new play, "In the Body of the World," Eve Ensler describes her experience with cancer. She talks about the care she received at the Mayo Clinic and other healthcare facilities.

She reveals the harshness of chemotherapy, the dedication of the volunteer whose work is to facilitate the expulsion of flatus, the simple act of a provider looking at her in her eyes offering reassurance, and the assault-like treatment of another provider.

The play offers insights on the importance of patient experience, but it is about much more.

Ensler, the author of "The Vagina Monologues," explores family dynamics, rape, joy, atrocities in the Republic of the Congo, and even an incidental reference to Donald Trump that elicited laughter from the audience.

The world premier of the one-woman play, which continues through May 29 at the American Repertory Theater in Cambridge, Massachusetts, is all the more powerful because it is performed by Ensler herself.

During a conversation with the audience after the performance, the director, Diane Paulus, who worked with Ensler on adapting her memoir to a live 90-minute presentation, explains that the staging is designed to break through the barrier of the fourth wall—the imaginary barrier between the performer and the audience—to create a sense of community.

The healthcare industry has some of its own barriers to breach: those between provider and patient, between payer and provider, between executives and patients. The barriers may not be intentional or ill-intended, but by creating a greater sense of the community of caring, leaders can enhance the experience of their patients and themselves.

We see that sense of community in the City of Joy, a community initiative in Eastern Democratic Republic of Congo to support and treat the survivors of rape and abuse from the years of war.

Ensler mentions the work of Mayo clinicians who volunteered their time and skills to travel to the community to care for the women as the community heals, teaches, and creates new women leaders.

Despite the despair and the dire circumstances of life in the Congo or life with cancer, by breaking down barriers, there can be joy.