Thursday, April 25, 2013

You Heard it Here First

Well, it’s not such a new idea, but it was mentioned here in the last post. Now, Ron Goetzel has brought the issue of incentives for modifiable risk factors to the fore again with his Health Affairs Blog. [Does it seem strange to anyone else that his blog is accessible in the public domain, whereas his paper on the same subject in the Nov issue of Health Affairs is not?] What prompted all this attention was a paper by Jill Horwitz (also not accessible) suggesting that workplace health promotion programs do not save money.
This is an important point, and Dr. H seems to be swimming upstream. The numbers are not entirely clear, and both sides may be technically correct, with enough footnotes and disclaimers.
The Accountable Care Act (ACA) allows employers to reward employees for participation in health assessment programs and for achieving goals, such as losing weight. There are lots of caveats and concerns over whether this is OK or may be unfair to some employees. Somehow, I have trouble with the “unfair” issue. If you have a modifiable risk factor, say obesity or smoking, why is it unfair to charge you more for health insurance? Some of this depends on how the program is structured. Is it better to pay for good behavior or charge more for bad behavior?

Part of the fairness issue rests on whether a given risk factor really leads to increased healthcare costs. There is a lot of soft data, but the longitudinal studies are missing. If you are obese, do you have increased healthcare costs over the next 5 years? And if so, how much? The related question is, if you reduce your weight to the normal range, does that added healthcare cost burden disappear? For example, it takes ex-smokers at least 10 years to join the normal mortality curve.

Here’s a far out idea: should the government encourage smoking as a way to decrease Social Security costs? The answer seems to be no. The mortality would be higher (helping SSA), but not enough to offset the increase in Medicare costs. Think again.

The workplace is a logical point to address modifiable risk factors. Employees spend most of their lives in the workplace, and employers have a vested interest in healthy workers. Employers are interested in illness that hampers productivity or increases use of healthcare resources, but they are not concerned with mortality. Those who advocate moving health insurance out of the workplace will have to find another access point for population health.

You would think that if an individual recognizes that a given behavior diminishes his health he would welcome the opportunity to change. Buzzer!! Doesn’t work that way. Everyone knows that smoking is detrimental to health, but many persist. Many of us would feel better if we lost 20 pounds or more, but . . . I’m not having much luck, are you?

Money works. People will change their habits if you pay them, and Goetzel suggests that around $500 is the tipping point. Pay them to take a health assessment test and then pay them when they achieve some goal (stop smoking, lose 20 pounds, etc.).

Now, is there a return on that investment? If I lose 20 pounds, will I spend $500 less on healthcare every year? The answer seems to be yes, for some risk factors but not for all. Here’s the list of the Significant Seven:
  1. Smoking
  2. Obesity (not just overweight)
  3. High blood pressure
  4. Inactivity
  5. High blood glucose (Is this the same as obesity?)
  6. High stress (self reported. What does this mean?)
  7. Depression (self reported).
Interestingly, high alcohol use isn’t a factor unless/until it interferes with social or work performance. In other words, it’s the effects of alcohol abuse, not the alcohol itself that is a problem. But we knew that.

What’s an effective program look like?
  1. First, as stated above, it works better if it  includes money as an incentive.
  2. General wellness education. Target the Significant Seven risk factors.
  3. Health assessment for each employee, with individual advice on things to change.
  4. Provide the means to the end. A gym, discounted fitness club membership, smoke free workplace, individual counseling, healthy food choices in the cafeteria, etc. Make healthy lifestyles part of the corporate culture.
Does it work? Probably yes, if it’s done well. Here’s one accessible reference that suggests a $3 return for a $1 investment.

Got to quit now. I’m off to the gym.

Saturday, April 20, 2013

Part one

I’m ready to suggest that any article on healthcare start with a glossary. This is particularly true for articles about money. For example, what’s the difference between healthcare costs and the costs of healthcare?  The distinction is important because one refers to the cost of an individual healthcare service, such as an appendectomy, and the other refers to the total amount spent by on all healthcare in a community.

Let’s start at the beginning. Say, you run a healthcare insurance company, like Medicare, Medicaid, or Blue Cross. You want to reduce your annual expenses. There are a limited number of strategies, but no magic answers.

  1. Limit the number of people insured by limiting eligibility. States do this a lot with Medicaid. Obviously, if you’re dependent on premiums, this is self-defeating, but it works for Medicaid and somewhat for Medicare.
  2. Cherry pick. Limit eligibility to healthy people who won’t demand much healthcare. This works in both directions. Patients wait to buy insurance until they think they might be sick. Hospitals try to adjust their payor mix so they have more high-paying insurance companies.
  3. Cost shift. Paying less thru insurance and passing more of the cost to the patient. Originally, co-pays and deductibles were intended to discourage use. That didn’t work, but the concept did serve to shift costs. Cost shifting is happening in Medicare even as we speak. Americans already pay a larger share of their healthcare costs than any other country, and that trend will continue. 
  4. Improve the health of your insured population. Try to get folks to eat less, drink less, and exercise more. They will then use less healthcare, so you’ll have to pay for less healthcare as the insurer. 
  5. Reduce coverage. We don’t pay for that. The NICE committee in England is the poster child. They decide what the NHS will/won’t pay for. A similar system is part of the Accountable Care Act in this country. Drugs are a big item here, particularly cancer chemotherapy drugs. This is the reason you see the US Preventive Task Force arguing against PSA tests, mammograms before age 50, PAP smears, etc. 
  6. Prevention. Sounds good, but the numbers don’t show much, if any benefit. The most prevalent problems in US patients today are smoking, obesity, and alcohol. How do you prevent the consequences of those personal choices? One strategy that seems to work is tailoring premiums to personal habits. If you smoke or have a BMI over 25, your premiums will be higher. I don’t see Medicare doing that any time soon. Under this broad title, we must also group prevention of healthcare itself. Most of this effort has gone to preventing diagnostic tests and procedures, but we’re also seeing questions about back surgery and coronary artery stents for example. 
  7. Screening. Any test has a certain number of abnormal results. Some but not all of these are significant. All the abnormal results lead to more tests that cost more money and don’t necessarily do any long term good (except for the providers who get paid for doing them). When I was a kid, the state health department had mobile vans in shopping centers to do chest X-rays for Tb. Not today. Let’s agree that mammograms are a good thing. But how often? And starting at what age? Or until what age? If you really want to screen for colon cancer, you must do a colonoscopy. As an insurer, are you going to pay for that for everyone, or is fecal occult blood good enough? 
  8. Shift the care system to lower cost providers. That’s what the “medical home” is all about, having nurses, nurse practitioners or physician assistants do work that was formerly done by physicians. It can work if done well. Been to a bank lately? I haven’t. My bank (USAA) doesn’t even have a physical office, and I like it that way.
  9. Reduce your cost per unit of healthcare service. You do this by negotiation and price competition. CMS (Medicare) tried this for durable medical equipment (think wheelchairs), and it worked. It worked so well, in fact, that affected suppliers screamed to their congressman who screamed at CMS and they stopped. Reported savings were in the 30% range, and there is every indication that it would work for healthcare services also. Suppose Medicare sent out an RFP for total hip replacements and awarded contracts to low bidders every 50 miles along the East Coast to serve patients in those areas.

Like they say, it’s complicated. There are other considerations or issues that need to be addressed, like:
  1. Someone has developed a new super-duper way of doing mammograms. Early results suggest it finds smaller tumors, but it costs twice as much. Are you going to pay for it?
  2. A new screening scan of lungs in smokers spots their lung cancer sooner. Are you going to cover that? 
  3. Here’s a patient who weighs 260 pounds and wants a total knee replacement. Will you pay for it?
In one of the university hospitals where I worked, the anesthesia department refused to provide anesthesia for a patient to have his infected mitral valve replaced a second time. He was an IV drug abuser, and they felt surgery would be a waste of taxpayer money. The surgery was not done, and the patient died. Was this OK?

More to come about money. Stay tuned.

Friday, March 29, 2013

I know it when I see it

Quality by any other name . . . .  Well, where do you find quality?  Everywhere, if you look.  Last week, I was in a small grocery waiting for my table in the adjacent restaurant.  A dining patron came in and bought two six-packs of a unique beer and asked for a cooler and ice.  Sorry, none of the above. But the proprietor volunteered that he would keep the beer in the grocery’s cooler, and if the diner hadn’t retrieved it by closing time, he would take it to the maitre d‘ to await his departure.  I’d call that quality service, and I found it in a town that has one street, in a county that has no stop lights and no fast food restaurants.   

A few years ago, I visited my grandson’s school.  The sixth grade students were questing.  Each knight (student) had a quest.  I guess that’s what knights do: when they’re not jousting, they’re questing. There were rules.  The quest had to be realistic and achievable--world peace doesn’t qualify.  then, the knight must specify what it would look like if he succeeded, together with measurable goals to define progress along the way. There must, of course, be a plan.  How do you plan to achieve the above goals? Then, a report at intervals that lists the metrics and any adjustments made to the plan as a result.  The final point on the blackboard was to celebrate success.  To me, it sounded a lot like the classic Mission-Vision-Goals thing, with the addition of a celebration at the end.  You can see PDCA in there too, but the word “quality” did not appear.

This lesson plan from the 6th grade at Sidwell Friends School became part of a missive to my boss and eventually led to our adoption of the ISO 9001 Quality Management System.  These kids were learning important lessons in governance and having fun at the same time. 

But is this “quality?” Listening to customers, paying attention to metrics, establishing goals, evaluating progress and adjusting plans? Yes, I think that qualifies.  Doing things well. 

I have an engineer designing a concrete wall for me.  A big wall.  I told him I want him involved with the implementation of his plan and asked him to specify critical points where he needed to be there.  The same day, I read an article in the Washington Post about a local Maryland county that built a new transportation hub--a sophisticated design, with post tension cables.  However, because of recent tax cuts, they had laid off most of the inspectors so no one was available to check the concrete or the thickness of the floors.  The results were not good, and the finger pointing has started.

So it’s not hard to recognize poor quality, but do we have to wait until the building falls down!  Quality should be quiet and unobtrusive. Ever been to Monticello?  It’s air conditioned, but you won’t hear it or feel it or see any vents or ducts.  I think of this as quiet competence--the ambiance you’d like to sense when you enter a hospital. Everyone doing their job as well as it can be done and keenly aware of nuances of your needs, the blanket appears before you complain of being cold. Maybe, someday, but it doesn’t happen by accident.

Thursday, January 31, 2013


OMG!  (I think that translates to "Oh my goodness.")  According to an ASQ survey, 81% of parents are "uncomfortable if their child does not perform well in sports."  Glad my parents didn't read that when I was a kid.  I learned early on that I was not good in sports--any sports.  You don't want me on your team.  Fortunately, it never bothered me (or my parents).  A slightly smaller percentage of parents were distressed over their children's bad grades, so success in sports is a little more important than academic excellence.  That's hardly surprising when you compare the salaries of high school dropouts who play football with college professors.

What about healthcare? For their part, students cited a fear of failing as a reason not to take STEM courses.  OMG.  How else do you establish your place in the world and learn what you're good at?  And where is it written that you have to be good in STEM subjects to have a career in healthcare! Success after failure requires dedication--some might say passion.  Yes, I'd say that.  I failed my first test when I was about 10, an external exam in Morse code. Decided that I didn't really care about Morse code and never looked back.  Later, I failed the first test I took in college: French. But that was something I did care about, and four years later, I toured France for a month and spoke only French. 
ASQ frames this is the sense of hesitancy to take risks because of fear of failure.  This, of course, is the reason one company has an award for failure.  The thinking is that if you're afraid of failure, you'll never try anything, and the company will miss opportunities. 

All of this assumes that failure and success are black and white dichotomous issues.  This is rarely the case.  We have all made decisions that didn't turn out well.  We reached the destination, but it took a little more time/gas to get there.   I can also recall some unexpected successes on trying out wild and improbable ideas.  Akin to disruptive innovation. 

How do we change this thinking in parents?  Children (even adult children) must be allowed to fail and to know that we still love them.  It's OK to fail.  Fast forward now to a healthcare environment.  As a manager/CEO, you must be able to say (to yourself), "That sounds like a really terrible idea, but if you want to try, have at it."  The employee hears only the part after "but."  That's another way of saying, "I support you in this.  Win or lose, I'm with you."  It's important to be able to say that even when you think it's a terrible idea.  Did she ask your opinion?  Did you ask how she planned to dodge this or that sinkhole? 

There is an unsubstantiated quote from a famous leader: "If you succeed, the glory will be yours.  If you fail, the responsibility is mine" (because I knew what you were doing and allowed you to proceed).  The corollary must always be, "in either case, we still love you."  I'm thinking of Little League parents.  Some years ago, "empowerment" was an au currant concept, and it's the same thing. Give employees (and children) the power to make decisions--even bad ones, and be there to catch them when they fall.  Remember, you're not always right.

Maybe we need to change our culture to re-define success and failure, so we are more tolerant of ideas that don't work out as anticipated.  Teddy Roosevelt once defined happiness as "working hard at work worth doing."  I also like Paloma Herrera's advice on becoming a successful ballerina: "First you must have a passion.  Then you must work very hard."  Neither philosophy excludes failure.  Neither requires that every endeavor be successful.  Indeed, for TR, success is achieved by working hard. 

There is, of course, another side to this.  If you failed every math test you ever took, it's probably not a good idea to go to engineering school.  However, you only learn that by taking risks and being willing to fail.  In this case, "failure" means better defining where your strengths lie.

Next week, I'm taking a risk.  I'm starting a class in digital media at the Corcoran Art School with a bunch of art majors who will be about one third my age.  This may not go well, and I hope that's OK with everyone.

Thursday, January 3, 2013

New Thoughts

In his 3 Jan blog, Paul Borawski asks again about definitions of quality and mentions again the ASQ study on the future of "quality."
So, I read it again, more carefully this time.  Buried in this paper is an essay by Roberto Saco, a past president of ASQ, in which he defines three definitions or levels of quality.  The first is found at employee-customer interface, the processes that create the products or services your customers require.  Here, we define quality as meeting specifications, satisfying customer needs, etc.  Here, we employ those tools and techniques that are near and dear.  But, in addition to looking outward at customers, our employees must look up at the company itself and be good stewards of company resources.  Meet those specifications in an economically viable manner, so the company can continue to exist.  Finally, the company itself needs to define quality in its relationship with the community.  

I once laughed at a hospital's mission statement than included "improving the health of the community."  But maybe that is appropriate in the context of this third aspect of quality.   I read recently that the burning of medical waste by hospitals is a significant contributor to air pollution.  Maybe the third level of quality could include taking care of the environment.  I  once visited a surgery center that used batteries for emergency power, rather that the traditional generator.  When they turned on their emergency power, there was no diesel exhaust.  Like so many things, once you decide to do it, the ideas are endless. 

In a previous post, I argued that the "quality" had become a slang term and thus had no precise meaning.  Mr. Saco is suggesting that there are three definitions, or aspects where different specifics apply.  For front line employees, quality means satisfying customers by meeting their needs, even unexpressed needs.  If a nurse sees a patient clutching a blanket in the pre-op area, she calls the engineers to raise the room temperature and then arranges for the temperature to alway stay at the warmer level, so no patient will ever again feel cold there.  That's quality. 

Looking upward, that same nurse will point out that a warmer room temperature will obviate the need for a blanket warmer in her area and also reduce the laundry bill.  Her simple action will thus increase the profit margin for the hospital in day-surgery.  That's quality at the second level. 

By not running that blanket warmer, the hospital just reduced its demand for electricity from the coal fired utility, thus improving the air quality in the community.  OK, it's a small thing, but, as they say, one starfish at a time.  (Yes, it's cheaper to warm the room rather than run the blanket warmer! Besides, cold patients require multiple blankets.) 

But we still don't have a single, unifying definition of quality.  Here's where I think Roberto and I would agree: You take a broad, general definition and supply the details at each level.  Let's take my favorite, from Lexus: "The relentless pursuit of perfection"  and apply that in a hospital from the day surgery unit to the board room:
1. and 2. We run a LEAN and mean operation in Day Surgery (excuse the pun).  Our processes of care are constantly examined to eliminate waste of time and materials.  There are no cupboards in our ORs, so the only supplies in the room are those we need for that case.  Our surgeons who repair hernias have agreed to use the same instruments and supplies, so we prepackage those kits.  This helps make our room turnover practically instantaneous.  Mop the floor, empty the trash, and we're ready.  All our surgeons use local anesthetics at the end, so there is minimal pain in the recovery room.  Our anesthesiologists utilize regional anesthesia to further reduce problems in the recovery phase.  Surgeons love the efficient way we move their cases along.  Patients love the stress-free process and our smiling faces everywhere.  The hospital likes our low internal costs, although we're always looking to improve that.  Our employees love working here.  We're the first team!  (No one has ever left.)

3. The hospital partners with local industry and the community at large in sponsoring a recycling program that also presses suppliers to reduce waste in packaging.  This has become part of our culture, so you just don't see soda cans in the trash here.   Vegetable scraps from our kitchen go into a giant worm bin, and the output goes to local truck farmers who grow veggies for the hospital kitchen.  We have also worked with the Mayor to secure a commitment to build a trash-to-electricity plant where all community trash will be burned to make steam and electricity.  The temperature is hot enough to allow including our medical waste in this process also.  Methane from the local sewage treatment plant will feed into this process, but the details are pending.  Our parking lot is shaded by solar photo-voltaic cells that produce about 25% of our power requirements.   

See, isn't it fun!  The more you think about these things the better it gets.  Don't forget, you have to involve ALL employees in this "Pursuit of Perfection."  That's leadership. But it's also fun.  Employees like to be included.

Last week, I was checking out at the supermarket, and the clerk was interrupted to page someone over the intercom.  "I just love it when I get to do that." She said.  "It makes me feel important."  I quickly assured her that she was indeed important--perhaps the most important person in the store, because she worked at the sharp edge of the enterprise, the place where I decide if I'm ever coming back again.  Probably more than she wanted to hear, but she did pause to consider the concept, and I felt good about pointing it out. My wife just rolled her eyes.

Monday, December 31, 2012

Profit, Non-Profit

 Here's a quote from the Washington Post article,  "5 Myths about charitable giving" on 30 Dec: "Nonprofits are not profitable.  In 2010, US charities reported more than $2.7 trillion in assets.  . . . (in 2007) a large Midwest charity hospital chain reported reserves of $7.4 billion, more than twice the cash on hand at Walt Disney Co."  If you're not laughing yet, read the entire article. 

His basic premise is correct, non-profits do indeed make profits, so it's hard to poke fun at this slip.  But anyone who took accounting 101 knows the difference between profits (the difference between income and expenses) and assets (stuff you own or take to the bank).  The distinction between for-profit and not-for-profit healthcare institutions has long been a source of confusion.  It should not be.  On the one hand, there is no difference.  All companies make a profit, or they cease to exist.  You can spend assets to pay expenses for awhile, but ultimately, you must make a profit to persist.  I once worked for a company that was jointly owned by a for-profit medical group and a not-for-profit hospital.  We kept three sets of books:  One for reporting our business to the IRS each year.  One for reporting to our for-profit owner, and a final one for reporting to our not-for-profit owner.  Note that it was the same business--same income, same expenses, same profits.  Each of the owners treated the profits differently on their tax return.  So that's the rub, how you report profits to the IRS.

It also makes a difference in how you run the company.  Here's a list of goals and strategies for a not-for-profit healthcare organization:
1. Emphasize giving.   Message every patient about all the good work you do and make it easy for them to contribute to your endowment.
2. Call yourself a "Children's" hospital, rather than a "Women and Children's hospital, because Children's hospitals attract more donors.
3. Lobby CMS and Congress for higher reimbursements.
4. Appoint wealthy locals to your board, and hold charity events to raise money. .
5. Cultivate relations with the press to obtain favorable coverage of heartthrob cases.

By contrast, here's what the for-profit competitor might do:
1. Control costs by bargaining aggressively with suppliers.
2. Engage employees in eliminating waste in healthcare processes.  Award cash bonuses.
3. Cultivate surgeons who bring high profit margin cases.  Make it easy for them to work here.
4. Aggressively manage the processes of care to eliminate waste and unnecessary steps.

One more thing:  there is a difference between a charity and a not-for-profit, tho some institutions are both.  In principle, a charity receives income exclusively from donors and spends money on some worthy cause.  Generally, they do not send bills or provide services for a price.  The Girl Scouts of America is a charity.  They do sell cookies, but they don't send bills to those who receive their services.  Georgetown University Hospital is a not-for-profit.  They do send bills to those who receive their services.  The Shriner's hospital  is the closest thing to charity in the healthcare world.  Their web site is all about donating, and their mission is to provide care without regard for the "ability of a patient or family to pay." 

As one might expect, for-profit healthcare institutions tend to be more efficient.  Nothing like reporting to a board on where the money went to focus your attention on the cost of providing care. 

Oh, yes.  The answer to the question from last time is one.  Marriott owns one hotel, the Key Bridge Marriott in Washington.  It was the first hotel Marriott built.  All the others are franchises.  Marriott has a quality team that regularly visits each hotel with a checklist.  If there are deficiencies, you are given an appropriate time to make corrections.  If progress is not forthcoming, they take the sign off the door, and you are no longer a Marriott hotel.

Saturday, December 29, 2012

Great Food

Just finished reading a review of Chef Geoff's restaurant chain in the August issue of Washingtonian Magazine.  OK, I'm a little behind in my reading, but this caught my eye as demonstrating successful use of basic quality tools and techniques, including some principles from ISO 9001. 
Owner, Geoff Tracy opened a restaurant in DC and managed everything himself.  This was successful, so he opened another, and another, and another.  He soon realized, however, that he could no longer manage everything himself and that without effective management, things didn't always go well.  Enter brother Chris, a numbers guy.  Together, they established 800 standards that are measured at each restaurant.  (Wine by the glass dated to ensure freshness, dishwasher at correct temp, email to new employees before first day of work, etc.).  All this is part of a perhaps obsessive attention to detail that rolls up to weekly, monthly, and annual reports on each restaurant.  Tracey is quoted as saying, "Consistency is a lot harder than it looks.  It might just be the hardest thing of all to achieve."  There are 70 training courses for employees, with cash rewards for those doing well on the tests. 

All of this will sound familiar to quality professionals, but it's unusual in the restaurant business.  Marriott hotels has a similar but shorter list of quality metrics.  (Trivia question of the day:  How many hotels does Marriott own?  Answer next time.) 

Chef Geoff has a mission statement: "Great Food, Libation, and Merriment."  His 800 metrics describe in excruciating detail what that means for every employee.  Note that there is nothing about gourmet dining or cheap eats.  Just a promise of great food/wine, and that you'll have a good time eating there.  And they do that every time at every restaurant.  Geoff is also quoted as saying, "I don't think measuring is what differentiates us.  . . . we share that information with our managers in a way that is actionable."  Sounds like my kind of place.  They even have outside auditors, tho they're not registered to ISO.  At least not yet.

So what's this have to do with healthcare?  Healthcare as an industry needs this approach.  Here's what it might look like:
1. A clear mission statement, linked to identifiable customers and their needs.
2. Weekly metrics to the CEO from key processes, with actionable items for improvement.
3. Consistency in service everywhere.  How about 70 in-house training programs, with cash awards for effective learning by employees.
4. Call buttons answered within three minutes.  If this restaurant can serve a cocktail within three minutes of the order, surely we can answer the call button in that time, every time. 

In short, healthcare needs to define some standards, measure performance against those, and develop action plans for noted deficiencies.  Note that it's not enough to say that "we'll meet this goal 90% of the time."  The quality professional will ask what happened the other 10% and what are you doing about it.  Take a page from Lexus automobiles, "The relentless pursuit of perfection."

In defense of the healthcare industry today, there are too many metrics that are imposed externally and have little to do with the quality of care.  Even for some that are relevant, the task of measuring compliance is more expensive than providing the service.  (Think, giving an aspirin within 30 minutes of an ER visit for chest pain.)

Some hospitals are adopting ISO 9001 as a management system, and there are consulting companies to help them with that effort.  Still, dramatic change will require something that doesn't exist today--price competition for healthcare services.  There is just so much business in "eating out" in the DC area.  Chef Geoff is pursuing a subset of those diners and aggressively assessing the quality of his efforts with the aim of constant improvement.  He will do well.  Now, what about healthcare?