Research by Matthew Weinstock


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H&HN has created this exclusive yearlong series called Fiscal Fitness with the support of the VHA. Finding ways to rein in expenses without sacrificing quality and safety is imperative for hospitals as they struggle to maintain financial viability in a shifting payment system even as their operational costs continue to climb. Over the next several months, we'll look at everything from the supply chain to pharmacy, IT and more. Follow the Fiscal Fitness series in our magazine and in our e-newletter H&HN Daily.

The shift from a volume-driven delivery model to one that largely hinges on value places new demands on hospitals and health systems to curb rising health care costs by providing clinically appropriate, high-quality care. Yet, as changes unfold in reimbursement, hospitals are challenged by the reality of still doing business in a fee-for-service world, all the while trying to figure out how — and when — they'll migrate to value-based payments. Although it is unclear when true payment reform will come into play and how it will take shape, there are steps organizations can take now to participate under new payment structures.

The first step is admitting to being part of the problem. "Hospitals have to be forthcoming and recognize they are a significant driver of health care costs," says Harold Miller, executive director of the Center for Healthcare Quality and Payment Reform. "They need to identify opportunities for savings and make a transition to lower utilization and spending in a viable way." For one thing, Miller asserts, "hospitals need less capacity. They need to ask, ‘How many beds do we need? How many MRIs?'"

The focus should be on providing care at the right time, in the right setting at the least cost. That will require a deep dive into the organization's operations, both administratively and clinically, and will require new delivery systems.

To succeed under payment reform, hospitals must build a strong culture of collaboration and accountability, says Richard Gundling, vice president of health care financial practices for the Healthcare Financial Management Association. This means defining value for and within the organization and ensuring that staff — clinical and nonclinical — grasp the impact their work has on both costs and quality. Another critical component is access to accurate and actionable business intelligence, Gundling says. The data must indicate the cost and quality of care provided.

Providing high-quality, low-cost care requires a collaborative relationship with doctors. "Physicians have a great deal of control over lots of hospital costs, Miller says. "Working with physicians can achieve dramatic savings."

On the quality side, hospitals should strengthen their focus on the 12 clinical process measures and nine patient experience measures set forth by the Centers for Medicare & Medicaid Services' value-based purchasing program. To that end, they should assess their performance as it relates to these process measures, as well as the potential financial risk associated with their performance. Organizations also should focus on identifying and implementing evidence-based practices to improve their performance relative to the quality metrics.

A solid health information technology infrastructure is critically important for payment reform, says Warren Skea, director of PricewaterhouseCoopers' health enterprise growth practice. In the short-term, hospitals should focus on getting the infrastructure in place around care coordination. In the long-term, they should start assembling a more sophisticated population health management infrastructure.

It will be important for organizations to link clinical and financial data to demonstrate the true value of care delivered, Skea says. "We will see changes in payment and delivery models and it will be completely foreign to most hospitals," he adds. "Hospitals should no longer invest in bricks and mortar. Instead, the strategic focus should be on people, new competencies and new technology."

The end result should be a health care delivery system that puts the needs of the patient first. "We need to provide more ways for patients to access the system," says Dom Dera, M.D., medical director of patient centered medical homes for the NewHealth Collaborative for Summa Health System, Akron, Ohio. The NewHealth Collaborative is a Medicare accountable care organization with the patient-centered medical home as a foundation. "We are able to develop a team-based approach to care that is highly coordinated, resulting in high provider and patient satisfaction," says Dera.

The patient-centered medical home enhances communication among providers and a proactive approach of care with patients, enhancing the quality of care in a cost-effective manner.

Case Study

Alexian Brothers
Hoffman Estates, Ill.

Jason Washburn wanted to know how effective treatments were at Alexian Brothers Behavioral Health Hospital. "We didn't necessarily know if a patient got better," says Washburn, director of the hospital's Center for Evidence-Based Practice. "We knew they were at a level where they could be safely discharged and wouldn't be a harm to themselves or someone else." The only real metric the hospital had was readmissions.

In 2006, the hospital started trying to conceptualize mental health care around evidence-based practices. It created questionnaires to conduct patient assessments. The challenge was coming up with relatively short forms that patients could complete quickly and that would produce meaningful results.

While the surveys have improved the hospital's ability to assess a patient's pre- and post-discharge condition, there's still a gap in longer-term follow-up.

In some areas, the hospital is on the cutting edge of implementing evidence-based protocols. Clinicians are using virtual reality to treat Millennials with chemical dependency. "We want to see what will trigger that behavior," Washburn says. "We can create those environments in virtual reality."

Kaiser Permanente
Oakland, Calif.

"Kaiser Permanente is a care delivery system that believes in evidence," says Scott Young, M.D., associate executive director for clinical care and innovation at the Permanente Federation, which represents Kaiser's medical groups. The system has a dynamic process for instituting evidence-based protocols and getting them out to its 16,000 physicians. A national panel reviews new evidence, but protocols must be approved by the eight medical groups before becoming the standard of practice.

For major conditions such as diabetes and hypertension, the panel reviews clinical guidelines top to bottom every two years. Other protocols "bubble up on their own," some are brought forward by clinical leaders.and in some cases, the health system looks at the "burden and suffering" of a patient population.Kaiser's regions can develop their own guidelines or modify national guidelines based on patient demographic. Many of the system's evidence-based order sets have been built into the electronic health record. Clinicians also have anytime digital access to a clinical library that contains an enormous amount of literature and aids.

Implementation Ideas

In a 2010 report, researchers at Duke University Medical Center Library and the University of North Carolina at Chapel Hill Health Sciences Library outlined six key steps in implementing evidence-based practice.

Assess | Start with the patient. A clinical problem or question arises from patient care.

Ask | Construct a well-built clinical question derived from the case.

Acquire | Select the appropriate resources and conduct a search.

Appraise | Appraise the evidence for its validity and applicability.

Apply | Return to the patient and integrate that evidence with clinical expertise, patient preferences and apply it to practice.

Self-evaluation | Evaluate your performance with this patient.

Source: "Introduction to Evidence-Based Practice," University of North Carolina at Chapel Hill Health Sciences Library, July 2010

Getting in Step

According the AHRQ, there are three major steps for adopting evidence-based care: knowledge-creation, dissemination, implementation.

Knowledge creation and distillation:

  1. Research results in new findings that can be put into action.
  2. Distillation should consider such things as how the findings will transfer to real-world settings.

Diffusion and dissemination:

  1. Create partnerships to disseminate information.
  2. Mass diffusion of key products.
  3. Target dissemination at specific groups

Adoption and implementation:

  1. 1. Develop interventions.
  2. Adopt and implement.
  3. Confirm adoption across the institution.
  4. External partners adopt practices.

Content by Health Forum, Sponsored by: VHA.