Hospital Association Must Evolve, Says OHA Chief

As it struggles with price transparency and works to improve quality of care, the Ohio Hospital Association anticipates growing demands for population health data from its members, says the organization's president.

The Ohio Hospital Association—the nation's oldest—celebrates its 100th anniversary this year. OHA President Mike Abrams spoke with HealthLeaders Media about the evolving role of hospital associations. The following has been edited for clarity and brevity.

HLM: You've talked about the need for hospital associations to evolve. What do you mean?

Abrams: We need to evolve because our membership is evolving. In the 1980s there were over 100 Blue Cross companies. Today there are fewer than 40. There is a lot of consolidation industrywide and that includes hospitals and health systems across the country. Not only do we have hospitals joining large systems, the large systems in our state are beginning to collaborate with other large systems.

One of the things I say to our staff is that right now we have 219 members in our state. What is going to happen in a few years and we have, say, five sets of members and what are the implications for the hospital association if that is our new truth? We are doing a lot of soul searching. We are looking at three strategic initiatives. One is advocacy, the other is patient safety and healthcare quality, and the third is economic sustainability.

There are some things reserved for proprietary collaborations, but there will be other things that lend themselves to industrywide service, such as a very aggressive advocacy program. From a patient safety and healthcare quality standpoint, it is data.

Are there data services that even large systems collaborating with other systems cannot accomplish for themselves that require a more statewide, industrywide approach? Those are the things where we think we will find that we will provide the best value for our members.

HLM: Will OHA merge with other hospital associations in Ohio?

Abrams: We have more hospital associations in Ohio than any other state: seven. The formula at that level really is very different from venue to venue. As a statewide association we work well with all of them, but we work differently with all of them.

I don't anticipate mergers like what we saw in Illinois unless the locality were to come to us. It has to be locally driven. It can't be the state association saying 'we are going to take you over.' But if the locality says, 'There are economies of scale we could gain if we joined with you,' we would be open to that. It's not anything we are necessarily seeking.

HLM: What are your thoughts on the FTC's heightened scrutiny of the hospital sector?

Abrams: Since time immemorial a criticism of our industry has been 'you are too disjointed and uncoordinated. You need to collaborate better so we can get better results and value and better patient safety.' That has been true and hospitals are beginning to collaborate. It is showing real results on patient safety, quality, value and efficiency.

Then, the long arm of the government comes down and says 'Not so fast!' Nobody wants to be anticompetitive, but we want to collaborate to the extent that the law will allow. There are also examples in the healthcare economy now where physicians and hospitals have done what they view as an honorable project that gets skewered by regulators.

Every time a court or regulators accuse a player on the field of being anticompetitive it is going to have a chilling effect on some of the collaboration that most commonsense people would view as proper.

There is value in competition. Our economy requires it at some level. So, I don't think the FTC is poorly motivated. But they do have an unrealistic expectation. Zealous enforcement of that body of law I don't think is helping the economy in any way. It has been frustrating to a lot of our members who are trying to do the right thing.

HLM: How do you see technology changing the healthcare landscape?

Abrams: We are a nearly $3 trillion segment of the U.S. economy and the really brilliant people from Silicon Valley are excited about opportunities to make our segment of the economy better. The game changers they are hurling at us are going to be shock and awe, starting now and indefinitely.

HLM: Some people in healthcare complain that 'techies' don't understand how a doctor's office, or a hospital ward function in real life.

Abrams: I say this at some risk, but the people with expertise in how a doctor's office works are not necessarily the people to go to to reinvent how a doctor's office should work. People from the outside who ask 'why do you do it like that?' may have better ideas. They can change the system deftly. We are going to see more of that because there is a ton of money in this segment of the economy. They look at this and say 'that is insane! Why do doctors and hospitals do it that way? They ought to do it this way.'

HLM: There is a growing consensus that healthcare providers need to overhaul their billing practices, especially with respect to transparency and simplicity. What efforts are Ohio hospitals making in this area?

Abrams: We are really struggling with transparency in Ohio and how to recommend something that is doable and that would matter. The public is frustrated that we can't tell them how much a service is going to cost. We are frustrated because we don't know how much that service is going to cost. We have proprietary contracts with payers that preclude us from giving out the payers' information.

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So, if I call one hospital and ask 'how much are you going to charge me for a hernia?' They are going to say 'it depends.' What I am really asking is 'what is my out-of-pocket?' They have no idea unless they know who my insurer is. It's so much more complicated than just saying 'it's $8,000.'

HLM: Is there concern that if the healthcare sector does not simplify the process, then government will?

Abrams: Some states offer an exhaustive database on the website of what an organization's charges are. There is not a less-meaningful number than what a hospital charges for something because nobody pays what we charge. The chargemaster rate is a ghost.

I come from the position that bad data is far worse than no data. We are struggling with what is a credible number that insurance companies will not quash us from giving out. Publishing comparative data on a website is a tricky. We need to jump on it. The pressure is from the public and the legislative bodies that represent them and honestly they are not wrong. We are frustrated too.

The issue is how do we solve it in a way that will matter for patients and not put in place a program where we pat ourselves on the back and in three years we're no farther along on transparency?

HLM: How do you stay above the competitive fray of your members?

Abrams: The work that I do transcends competition. I am not looking to gain market share or teach anybody how to gain market share. I have the luxury of ignoring the very real competitive forces at play. I read about them as a curious bystander, but it is not central to the portfolio of products and services I offer Ohio hospitals. I don't see that changing.

But what I do see changing, potentially, is their demands of me. I can imagine one day that some of the members will say 'we no longer require this kind of data from you. What we are interested in is what you can do for our tribe from a population health data perspective.'

Right now we have a lot of members with a traditional business model that has been provide a service and earn a biscuit. I can imagine one day their business model is they are held accountable for the health of a population, be that a community or a set of employees. Hospitals will require me to provide different data from what they currently require. We are getting ahead of the curve because we see that coming.

HLM: Where do you get your data?

Abrams: We get great data from our members, but it is all proprietary. We take everybody's data and aggregate it and we are able to create reports based on their needs. It's very sophisticated and they are using it to do some of the things we are most proud of; driving down hospital-acquired incidents of harm. We have driven that down by 55% in the state of Ohio. We now have hospitals in our state that have gone years with no ventilator-associated pneumonias. We are driving down the incidences of central line infection rates and catheter-associated urinary tract infection. We are starting to take on sepsis.

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Our data is being used for spectacular results that are not only resulting in lives being saved, but it is definitely driving down the costs because all of those complications have costs associated with them.