As we race toward the 2012 presidential primary season, there is much talk about the sins of “Obamacare.”
The Republican candidates have debated the perceived weaknesses of the Affordable Care Act endlessly, sometimes responsibly and with insight, other times less so. But what a majority of the opposition candidates fail to acknowledge is that, even if “Obamacare” is overturned, the problems inherent to the U.S. healthcare system will not go away.
Tea Party primary voters may not recognize this, but thoughtful healthcare executives do.
The American Hospital Association recently released a report on “Hospitals and Care Systems of the Future,” based in part on interviews with hospital administrators, that forthrightly notes the inexorable movement away from the current “volume-based” reimbursement system toward a “value-based” payment system. The AHA emphasizes that multiple forces are driving this change, and for hospital leaders – unlike politicians – denial is not an option.
The socio-economic transformations that are pushing the United States toward a new healthcare environment should not surprise anyone. We know that the U.S. population is aging, projected provider shortages are looming and the rise in healthcare spending as a percentage of gross national product is unsustainable. This evidence is not novel.
But in order to create the necessary “culture of performance improvement” at U.S. hospitals that will allow for successful adaptation to change, the AHA argues that hospital and health system leaders must implement a core of critical strategies that will themselves be “transformational.”
Ten of these strategies are designated by the AHA as “must-do,” with the top four identified as particularly essential to hospital success in a new healthcare ecosystem.
The “core four” strategies are:
• Aligning hospitals, physicians and other providers across the continuum of care;
• Utilizing evidenced-based practices to improve quality and patient safety;
• Improving efficiency through productivity and financial management; and,
• Developing integrated information systems
The first strategy, hospital-physician alignment, has been an industry talking point for the last few years. The AHA describes the relationship between physicians and hospitals over recent decades as evolving from “necessary association to competition to interdependency.”
A vast majority of hospital executives surveyed by AHA indicate that they plan to increase the number of employed physicians, yet employing physicians “does not secure alignment beyond financial incentives.” Working toward true alignment means that hospitals must collaborate with physicians not only on financial goals but also on quality and strategic objectives.
The AHA says successful alignment arrangements across the care continuum will create a system where “all parties are accountable and rewarded for achieving high performance, reaching patient-centered goals and allowing for an advantageous transition” into value-based payment systems.
If alignment is directed at achieving high performance, it leads directly into the second core strategy, the utilization of evidence-based practices to drive high quality patient care. In new reimbursement regimes, quality metrics will be tied directly to provider payments. Medicare is moving in this direction, as are commercial payers.
Evidence-based medicine and patient-focused care are the clinical components of a culture of high performance, but efficient administrative management is a key pedestal of the business side of hospital operations. Process improvement methodologies, such as Lean and Six Sigma, are used increasingly to eliminate waste in healthcare settings. The AHA encourages provider organizations to seek efficiency and cost management “through a renewed focus on quality and access.”
Process improvement empowers hospital personnel to advance financial and clinical management, but the fourth core strategy promoted by AHA encourages technology investment in addition to the optimization of human capital. The development of integrated information systems at hospitals and across health systems is essential to connecting providers and “providing critical real-time information to actively plan, measure and improve efficiency and quality everywhere.”
The hospital leaders surveyed by AHA said healthcare organizations must leverage technology to perform data mining and analysis in real time for continuous care improvement. Such an approach is critical for long-term organizational sustainability.
While encouraging the implementation of these core strategies, the AHA rightly emphasizes the importance to hospitals of enterprise-wide “core competencies” such as accountable governance, financial stewardship, enterprise risk management and a culture of collaboration that is scalable outside the organization.
Stasis may be acceptable in the current political environment, but inaction will be deadly to healthcare organizations in 2012. The pied pipers of inertia are playing a tune that none in this industry should heed.