Friday, July 7, 2017

The Age Of Hospital And Health System Automation Is Here: How Can Design Help?

Note: This blog post is a part of Design Blogger Competition organized by CGTrader

The pressure to lower cost, raise quality, and create a better patient experience is high and hospitals and health systems are adopting new technologies to improve all aspects of operations as a result. We are now capable of applying modern industrial production methods to a system that seemingly custom manufactured every patient care episode. Design needs to play an even bigger part in this.

Patient Flow Management Was Just the Beginning of The Age of Automation

Managing patient flow in hospitals with electronic systems is mainstream in many organizations and we are now seeing the emergence of centers that are evolving well beyond patient flow and creating the new age of healthcare automation. Data and intelligence are now part of the process, moving to real time resource management and advanced continuous predictive analysis from a variety of data feeds. And with this data we can constantly improve, applying Lean principles in combination with robust analytics that result in lower lengths of stay, reduced bed turnover time, higher occupancies, admission avoidance, lower cost, and higher patient satisfaction instead of the intermittent interventions we apply now.

System Operations Centers Are the Next Step in Healthcare Automation

Called by various names like capacity command centers, system control hubs, and network operation centers they are central locations that manage all patients coming to, receiving care in, and leaving the hospital to other settings. They can and do house bed managers, environmental services coordinators, patient transfer staff, OR schedulers, transport coordinators, staffing coordinators, and facilities management. They also can and do house telemedicine including biophysical monitoring, remote surgery, radiology, pathology, electronic ICU’s, remote ED and med/surgical monitoring, and tele-sitters. Centralized scheduling and clinical contact centers, incident command and emergency dispatch centers, and automated facilities management can all be included.

These centers leverage software and hardware advances, real time location service (RTLS), and voice and visual communication. They are scalable, not limited to one hospital, and can and do operate system wide including ambulatory care. They operate 24x7 and don’t have to be in the hospital.

How Can Design Help?

First, consider what design is. To design is to plan and make decisions about something that is being built or a process created. Design takes the pointlessly complicated and creates a cohesiveness that assures all parts work together smoothly and efficiently. Design has words like aim, purpose, intention, conceptualize, and invention at its heart.

The application of design to hospital and health systems operations has been limited. Our traditional way of caring for patients is very complicated: We move them around into different types of beds: ED stretcher, med/surgical bed, ICU bed, recovery bed, OR table, or imaging table. Most ambulatory patients fare no better going from one office to another. This is legitimately in response to the way healthcare has been organized in silos small and large, the technology we use, and the physical space standards we have. We view these locations as fixed and unchangeable making patient flow and resource use a very complicated process to plan.

But when you flip that traditional formula - a bed or space as a fixed asset - on its head and design the process around the patient the opportunities to manage flow and the resources associated with patient care operations open wide.

As we move forward with better data and better cost accounting new solutions will arise.
The data coming out of these technologies will enable us to track complete care paths that can start at the onset of symptoms rather than at hospital entrance and at resolution levels of the individual patient and provider. Rather than department oriented we will become patient oriented.

What If We Designed Hospitals and Health Systems Where:

  •         Hospitals run at 90% - 95% occupancy with shorter lengths of stay and peak loads are eliminated?
  •         Tele-presence is in every room and staffing intensity is adjusted to the patient instead of moving the patient to higher or lower intensity rooms?
  •         Operating rooms automatically configure themselves to the next scheduled case and prepare the robotic devices that will assist on the case?
  •         Automated on demand supply replenishment, is provided by transport robots?
  •         Security, housekeeping, and food preparation is augmented with autonomous robotic technology?
  •         Patient rooms and unused spaces power down automatically when inactive?
  •       The measured, continuously monitored patient experience begins before admission and continues long after discharge from the hospital?
  •         Waiting rooms were a thing of the past?
  •       The ambulatory experience is as much virtual as it is physical?

The StratEx Crossroad knows there is only so much efficiency you can achieve given the nature of current hospital practice and the design that follows from it. When we plan a road, we build over and through obstacles to ensure that traffic flows as smoothly as possible. When we plan hospitals, we keep the obstacles in place and work around them because of tradition embedded in regulation and code.

This will change, the technology exists and is slowly being applied but it will take design to bring it all together and those what if’s will become reality.

July 7, 2017


Thursday, June 1, 2017

The Best Solutions I’ve Heard So Far To Our Healthcare Insurance Problem

Is it possible President Trump can slice through the Gordian Knot of our healthcare insurance problem? After all he did advocate in the very beginning of his campaign for some sort of universal insurance and continues to insist on better healthcare at a lower price. Given everything that’s transpired since the election I doubt if anything is possible other than kicking the current can down the road.

If it was possible to have a reasonable dialogue, here are three places to start short of single payer:

Tie The Individual Mandate To The Lowest Priced Plan And Equal To The Subsidy Or Tax Credit

Here’s what Dr. Kevin Volpp said recently in a Knowledge@Wharton podcast How Behavioral Economics Could Solve America’s Health Care Woes:

 “I would consider having a stronger individual mandate and making that similar in price to the lowest-price plan. That way, everybody would have to do it. The issue becomes one of affordability and whether the carrot incentive is a subsidy or a tax credit. Whatever we might label it, those would have to be large enough so that lower-income families could actually afford the plan.”

The way you might think about this in context is we could have a form of automatic re-enrollment in a plan, where you could peg the plan to the price of the lowest subsidy or tax credit that’s being offered. You could basically say, “Here, you automatically have this plan. It’s free and you can opt out, but then you’re going to lose your coverage and the subsidy.” But I think very few people thinking rationally would do that. Why would you turn down a free health insurance plan?

On the other hand, if you think about this in an opt-in framework, which is the way it has been structured until now, this information is all out there but you have to find it. You have to make the effort to go sign up, you have to go through that process, you have to sift through all the information, and you can see why that naturally would lead to a lower enrollment rate.”

Medicare Advantage Premium Support For All (MAPSA)

Billy Wynne, from TRP Health Policy, outlined this approach in a Health Affairs Blog post The Bipartisan ‘Single Payer’ Solution: Medicare Advantage Premium Support For All:

“While any flavor of single payer may be the last thing that comes to mind when contemplating bipartisan initiatives, just as the far left and far right share some libertarian (and other) commonalities, we may have indeed finally come full circle in this tiresome, so-far-futile debate. By combining two shots of conservative orthodoxy with one overflowing progressive one, and stirring slowly, it is not at all far-fetched to envision an endgame cocktail for our health care system that covers everyone, decreases costs, and can pass Congress. Cheers.

We’ve got $5,371 in all-government spending on health care to allocate to an average plan cost of $6,456. That leaves $1,085 as the average annual premium contribution with anticipated cost sharing of 20 percent, or $1,291. Per capita household spending would thus be $2,376, which is cheaper than the current average rate of $2,705.

Medicare Advantage, as delivered by commercial insurers, combines all of these services (hospital, outpatient, etc.) and may also include prescription drug coverage, with flexibility to add benefits or reduce premiums and cost sharing if savings can be identified, as they often are. For fee-for-service enrollees, drug coverage can be obtained separately via private insurers or pharmacy benefit managers under Part D, with an average premium of $408.

While the Medicare Advantage market would need to be expanded to ensure adequate consumer choice and plan competition, having all payers participate in a single, unified program will substantially alleviate this redundancy and frustration in our current system.

Five or so years after enactment, coverage from the narrower, federally funded programs such as the Federal Employees Health Benefits Program, Veterans Health, and TRICARE, could be transitioned to the new commercially driven, federally backed, MAPSA. Three or more years later, Medicaid and individual commercial insurance market enrollees would join. Last of all would be employer-sponsored insurance, where coverage is the most stable (and privately financed).”

Consolidate Non-Medicare High Utilizers Into Medicare

I don’t have a citation for this and I don’t remember the genesis.

The basic idea is to gather up all the non-Medicare high utilizers into Medicare and manage them like you manage Medicare high utilizers.  We’ve done this before with dialysis patients and for certain people with disabilities who are under age 65 and receiving Social Security Disability benefits. Such a scheme would immediately lower premiums for everybody else. I’m not advocating a free ride though. The insurers who were previously paying for the customer-patients would have to continue to kick in some dollars to the fund and the customer-patients themselves would still be paying on Part B. So maybe everybody else’s premiums wouldn’t go down as low as they can but they will go down.

The StratEx Crossroad is not hopeful that we can have this dialogue right now and I can’t predict when it will be possible. Keep in mind we are only talking about reforming health insurance. How much bitterness and rancor will develop when we really get serious and start talking about changing how we produce and deliver healthcare itself?



June 1, 2017

Thursday, May 25, 2017

Massachusetts, What Are You Doing To Lower My Health Care Costs?

Massachusetts, by anyone’s account, is a world hub of healthcare brainpower so you would think that lowering the increase in healthcare costs is a task that all those neurons are up for.  Note I didn’t say reducing the cost below today’s level; we’ll probably have to wait for the great AI in the sky for that.
I won’t bore you with the history of Massachusetts healthcare reform except to say we almost totally eliminated the uninsured in 2008 and then, in 2012, passed another law to stem the inexorable rise in healthcare spending because what’s the point of having health insurance if it costs too much to use.

How Are We Doing?
Not so good. In 2013, our growth rate was 2.3% with no good explanation other than its most likely a residual effect from the Great Recession; a lot of people just stopped purchasing healthcare. In 2014 and 2015 our growth rates were 4.1% and 4.2% respectively. We do not have data for 2016 and 2017. Keep in mind we are talking about total expenditures for all forms of healthcare. Part of this is rising prices for healthcare goods and services and another part of it, once the recession starting easing, is more people making those purchases.

A Lot Of Work Has Gone Into Stemming The Rise In Healthcare Expenditures
In 2016 and early 2017 Massachusetts engaged in considerable study of our healthcare cost issue. The Health Policy Commission released their 2016 Cost Trends Report and the Special Commission On Provider Price Variation issued their report and recommendations.
Here’s what resulted from all that effort:
  •  The Governor’s proposed 2018 state budget contained a provision to keep hospital and professional service provider costs (except behavioral health and primary care) to an increase of no more than 1% a year. A pretty drastic measure to be sure but at least he proposed an action. It wasn’t taken up by the legislature.
  • The House Ways and Means budget proposed nothing
  • The Senate Ways and Means budget propose nothing
  • The Health Policy Commission lowered our healthcare cost growth target to 3.1%, down from 3.6%, not because we have made progress in lowering our growth rate but because the law says they must
  • Neither the House or Senate have yet to propose any legislation stemming from the recommendations of the Special Commission or the Health Policy Commission

We Have Figured Out A Way To Get More Money Pay For Some Of The Increase
The governor and both sides of the legislature have agreed on placing an assessment (aka tax) on employers who don’t provide health coverage to their employees many of whom end up on Medicaid leaving taxpayers on the hook. How this is implemented will be up to the Governor once the 2018 budget is passed.
The Governor opened the bidding on the idea proposing a $2,000 per employee assessment on businesses with 11 or more employees who don’t insure at least 80% of their employees. Our leaders figure the employers ought to bear some of that burden. While rejecting the proposed rate of assessment both Ways & Means Committees and even the major business groups are going along with this.

Massachusetts, What Are You Doing To Lower My Health Care Costs?
Nothing, it seems.
While everyone is quick to add taxes, fees, assessments, etc. to pay for our ever-increasing healthcare bills no one can come up with a way to control it. All the neurons gathered in this state are no match. The StratEx Crossroad can’t wait for that AI in the sky; it’s time to bring in Watson, DeepMind and a few others and let them loose.
Yes, healthcare is complicated but certainly not as complicated as game of Go.


May 25, 2017

Sunday, April 9, 2017

Is It Time For A Personal Health Case Mix Index In Massachusetts?

In my previous post I listed the warranted and unwarranted factors that the Special Commission on Provider Price Variation deems worth considering in setting commercial healthcare insurance rates. In this post I take a closer look at these warranted factors and those that might be considered warranted. In doing so it’s become increasingly clear to me that all we are doing here is tweaking an existing system without addressing the bigger picture. 

The Special Commission is advocating that commercial insurance payments be based on a patient acuity index instead of the bargaining strength of hospital systems. I think we all agree that inpatient case mix is appropriate in setting prices for hospital care and we have a well-developed method for doing so that is continually adjusted and refined. The Special Commission points out that case mix for ambulatory outpatient hospital services needs further work. I agree with that but I wouldn’t stop there.

If we are going to go to all the trouble of developing a complicated case mix index for commercial healthcare insurance why not develop a personal health case mix index (PHCMI) that is centered on the customer-patient?

We all have our own credit score that changes over time and even our auto insurance gets adjusted so why not have your own PHCMI that changes as you become healthier or need more complex services; for example if you go in for a hip replacement or you are in an accident that requires emergency surgery your PHCMI goes up.  If you have maintained your health over the years your PHCMI goes down. Your out-of-pocket costs and premium would be adjusted accordingly.

Your PHCMI would include socio-economic factors and there would be no need to factor in area wages and high cost outliers because they are already part of the socio-economic factors. This personal case mix index would be illuminating especially as we move inevitably to a system grounded in population health.

How Would We Handle The Factors That Are Not Based On PHCMI?

The Special Commission points out that there are cost factors that need to be considered in provider payments, these include quality, teaching, low/no margin services, and stand-by capacity.

I wouldn’t include any monetary adjustment for quality - you either meet a high standard for quality or you don’t. If you don’t you are no longer licensed to provide care. As for the other factors a separate payment stream should be available that is not tied to the PCHMI.

We’re Having The Wrong Debate

Even with a system based on PHCMI it’s still very complicated and only tied to commercial insurance. Providers still have to deal with Medicare, Medicaid, and other forms of payment. Fixing only one part of the Rube Goldberg machine that is our healthcare financing system still leaves us in a world of Goldbergian madness.

The StratEx Crossroad hopes in the upcoming budget debate that some legislators see through the mess the Special Commission recommended and calls for, at the very least, a Maryland-like all payer system. Even my PHCMI system is an unnecessary work around and, no, it’s not time to adopt this.


April 9, 2017

Sunday, March 19, 2017

Provider Price Variation In Massachusetts: Have We Solved The Problem?

It’s been long established that healthcare providers in Massachusetts get different commercial rates based on their ability to bargain effectively with commercial insurers. This results in wide variation of payments enabling the more powerful systems to thrive while others struggle. This caused the SEIU to initiate a ballot question in 2015 creating a Peter/Paul system that transfers money from the well-off (aka Partners HealthCare) to the not so well-off systems. A Special Commission on Provider Price Variation was formed as a compromise to take the initiative off the ballot and recommend a solution to the problem.

Benchmarks, Floors, And More Study

The Special Commission’s recommendations while comprehensive only go so far and, like the pirates’ code, are more in the order of guidelines to be considered at this point. It needs more work but no doubt some of their recommendations will be included in upcoming house and senate budget proposals.

The Special Commission recommended the following:

  • Tie provider cost growth to the statewide benchmark for growth of total medical expenditures, which currently is 3.6% and under consideration to be lowered by the Health Policy Commission. Never mind that except for one year we have never been able to meet or fall below the benchmark growth rate, view this as prep work for whatever legislation arises out of this report to contain the growth of provider costs.
  • Providers (hospitals, physicians, and other providers) with lower rates would be able to increase their prices more rapidly than providers with higher prices
  • Establish a minimum rate floor for all hospitals (not all providers) in the state
  • Give either the Division of Insurance or the Health Policy Commission the power to review and approve commercial insurance contracts based on the benchmark and floor

How Would This New Rate Setting System Work?

We don’t know specifically because the Special Commission recommended that the exact formula be determined by the legislature and appropriate state agencies and this will require further study. But we do know what factors they think are “warranted” and “unwarranted” in determining rates:

  • Warranted: Patient acuity, high-cost outliers, and quality. It’s OK to consider these factors when determining provider rates.
  • Unwarranted: Market power, brand, geographic isolation, government payer shortfalls, and research. It’s not OK to consider these factors when considering provider rates.
  • Undetermined and needing further study: Area wages, low/no margin services, teaching, stand by capacity, socioeconomic status of patient populations.

It’s these three categories that are confounding the issue. How do you convert them into actionable items that can affect or not affect the actual price of services a provider can receive from commercial insurers? And what kind of process do you put in place to adjudicate disagreements regarding data used, rates set, and other factors that may not have been embedded in law and regulation?

I don’t know and neither does the Special Commission.

The Governor Has A Plan

Governor Baker, in his FY18 budget proposal, recommended capping hospital rates. His plan would allow no annual rate increase for the state’s most expensive health care providers, while mid-priced providers would be limited to 1 percent increases, and the lowest-priced providers would not be capped. He’s getting a lot of community support for this plan.

The Governor’s plan is simple and extreme; look on it as an opening bargaining position in the upcoming budget debate. The weakness with the Special Commission’s plan is that they did not recommend hard numbers to counter. At best they want to study the matter further.

The major flaw in both approaches is that it only addresses commercial insurance unlike the Maryland system that is all-payer and has proven itself. I suppose, because we are from Massachusetts and fancy ourselves the model for other states, we couldn’t possibly model our payment system from another state.

Keep in mind, that much like the Obamacare repeal and replace debate, you can’t fix something that is broken with something else that is broken, you’ll only end up with more broken. That’s what the Special Commission’s recommendations feel like to me.

There is a lot more the Special Commission has to say; their recommendations address transparency, balance billing, out-of-network payments, and tiered networks among others. The StratEx Crossroad will address these topics in further posts.


March 19, 2017

Saturday, January 21, 2017

Here’s How I Would Re-Write The American Hospital Association’s 2017 -2020 Strategic Plan

The American Hospital Association adopted its new three year strategic plan covering the period from 2017 to 2020. It’s broad, befitting an organization that has to represent a wide variety of interests at the lowest common denominator, and short term in nature because, I’m assuming, they don’t want to forecast too far out given the rapidly changing nature of healthcare.

I give them credit for recognizing that the notion of what a hospital is has changed and the industry is struggling with how to define what is emerging. They can find some direction in my blog post ‘The Hospital Of The Future’ published back in 2014.

I would also go out at least five years to 2022 but 2025 is a much more appealing date to me. The driving forces they articulate in their document have longer term consequences than three years from now and they should acknowledge it recognizing that tactical shifts will occur year to year as in any strategic plan and publish updates yearly.

What is really lacking is a basic statement of goals: Reading this document it is just not clear what they really want to accomplish over the next three years. They have five priorities that proxy as goals and probably should be restated as such. To their credit they stopped at five, the Drucker limit.

Here they are:

The AHA’s Five Strategic Priorities

Advocating for Access and Coverage: Preserving access to health care through existing and alternative models and extending integrated behavioral health services to meet the needs of all individuals within the health care system.

Strategic Direction: Educate and partner with stakeholders regarding innovations in access to ensure that the public can attain high-quality, coordinated care and that payment models keep pace with modern health care delivery.

Payment and Delivery Reform: Enhancing how health care is delivered and paid for, while ensuring adequate resources for hospitals to do their jobs well.

Strategic Direction: Understand and support treatment of patients across all care settings, from wellness to long-term care and end-of-life care (seamlessness across all settings). Encourage, promote and facilitate adoption of successful models of redesign and transformation that provide sufficient funding and resources for hospitals.

Performance Improvement: Promoting high-reliability organizations by improving efficiency and outcomes that lead to positive, measurable change for the better regarding costs, patient outcomes and production.

Strategic Direction: All stakeholders are aligned toward patient-centric performance improvement goals.

Shaping the Future Workforce: Ensuring human capital — physicians, nurses, community health workers, volunteers and staff — meets the needs of individuals and communities through training, support of future workers and talent management.

Strategic Direction: Increase diversity at all levels of the workforce to reflect the community served, and offer forward-thinking workforce strategies and guidance to ensure the right competencies for high-quality patient care.

Telling the Story: Detailing the transformative work of hospitals and their benefit to the community through their work outside hospital walls.

Strategic Direction: Advance community outreach, population health and new models of care, while addressing social determinants of health to further demonstrate the critical value of the hospital to a community.

My Re-Written Goals For The AHA’s Strategic Plan

  1. The cost of producing and delivering health care is too high and many can no longer afford it. Assuring insurance coverage is not enough, we must lower the real cost of hospital and ambulatory care leveraging technology the same way other industries have.
  2. The customer-patient must be able to purchase routine and elective healthcare services in the same manner as they purchase every other good or service.
  3. The public’s health is the population’s health. The hospital and healthcare system must partner with public health agencies and other non-governmental organizations to reduce the prevalence of chronic disease and avoid unnecessary hospitalization. Behavioral health must be a fundamental part of this.
  4. The Federal Trade Commission and the Dept. of Justice should institute new rules to enable hospitals and healthcare systems to consolidate and hospitals and health systems, in exchange, should commit to real reductions in the cost of the production and delivery of healthcare.

How do my goals compare? The StratEx Crossroad wants to know how you will incorporate the AHA’s priorities in your strategic plan.




January 21, 2017

Monday, January 2, 2017

How To Be Clearheaded About Healthcare Strategy In 2017

Healthcare strategy advice is abundant and often contradictory; one of the purposes of this blog is to sort through all of this and offer the reader some clarity. It’s easier said than done as evidenced by a series of articles over the last several months that interweave advice on strategic planning with execution and organizational dynamics. Being clearheaded about strategy is more important than ever as we enter 2017, which will be a year that brings us major shifts in healthcare policy.

As always read the articles - all written before the presidential election - to get the full flavor of what the authors are saying.

What Is Strategy?

There’s nothing more fundamental than understanding what strategy is and isn’t but you won’t get it from the articles I’ve read. Here is how the various authors articulated what strategy/strategic planning is:

  • Strategy is a long term proposition that requires constant monitoring and revision (Cheney)1 
  • “What is your strategy?” is the wrong question. The right question is, “What are your strategies?” No organization can get by with one strategy. You need a handful (Beckham)2
  • A strategic plan is a leadership tool. To generate impact it must incorporate a clear articulation of purpose and aspirations, a dynamic assessment of the organization’s situation and identification of what to do to secure its desired future (Beckham)3
  • No Single Strategy; No Static Solution: there is probably no single great strategy for the future (Cheney & Rosin)4
  • A strategic plan is not a set-and-forget instrument. It’s a living and breathing document that guides decision making and helps marshal resources (Kenny)5

What Does Drucker Have To Say About It?

Contrast the statements above with what Peter Drucker has to say:

  • Strategic planning is the continuous process of making present entrepreneurial (risk-taking) decisions systematically and with the greatest knowledge of their futurity; organizing systematically the efforts needed to carry out these decisions; and measuring the results of these decisions against the expectations through organized, systematic feedback.
  • If you have more than five goals, you have none.
  • Objectives can be compared to a compass bearing by which a ship navigates. A compass bearing is firm, but in actual navigation, a ship may veer off its course for many miles. Without a compass bearing, a ship would neither find its port nor be able to estimate the time required to get there.
  • Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you've got.
  • Concentration is the key to economic results. No other principle of effectiveness is violated as constantly today as the basic principle of concentration.... Our motto seems to be, "Let's do a little bit of everything."

It’s going to be an ‘interesting time’ as the curse would have it. The StratEx Crossroad suggests you write the above quotes down and refer to them often as you go about your strategery in 2017. They will serve you well in keeping your work fundamentally grounded and clearheaded.

And Never Forget, You Matter

Drucker always placed a lot, if not all, of the emphasis on people and their ability to lead and manage organizations; he knew that even with the best strategic system in place organizations thrived or declined because of the people in them. So here is one final Drucker quote to carry with you this year and throughout your career:

“Trees die from the top. No one should ever become a strategist unless he or she is willing to have his or her character serve as a model for subordinates.”

Happy New Year.




January 2, 2017