Robert M. Wachter, MD Professor and Associate Chairman, Department of Medicine

Chief, Division of Hospital Medicine University of California, San Francisco

Health Policy in 2013: What It Means to Hospitals and

Hospitalists

Dominant Health Policy Trends

Intense pressure on value – Particularly cost

Shift from individual to population perspective More insured patients with access to [fill

in the blank] The wiring of the healthcare system

What Does This Mean for Hospitals/Hospitalists

Fewer hospital beds/hospitals Better reimbursement/situation for PCPs Ubiquitous IT

– Changing delivery, monitoring, analysis, patient engagement

Intense pressure for value More need for hospital/hospitalist alignment New fights over how to split the dollars

Why We’re Being Pressured to Deliver Value

“The Challenge That Will Dominate Your Career…”

Newton’s First Law of Motion

An object that is at rest will stay at rest unless acted upon by an external force. An object that is in motion will not change

its velocity and direction unless acted upon by an external force.

When It Comes to Changing the System, Physicians Are Still “At Rest”

Tilbert et al. Who is responsible for reducing healthcare costs? (A survey of 2556 US physicians). JAMA 2013

But That Is Wrong: Docs Decide…

Which patients are seen and how frequently Which patients are hospitalized Which tests, procedures, and

surgical operations are done Which technologies are used Which medications are prescribed

Emanuel EJ, Steinmetz A. Will physicians lead on controlling health care costs? JAMA 2013

Hospital Leaders Recognize Importance of MD Alignment

Extremely/Very Important to Our Business Model in Next 3-5 Years

Strategy % Agree Aligning with physicians to integrate them fully in clinical redesign efforts

98%

Aligning with physicians to preserve and expand market share

94%

Improving quality to take full advantage of P4P incentives such as CMS value purchasing

92%

Innovative deployment of health information technology across the continuum of care

92%

Redesigning clinical care processes using Lean, Six Sigma or other workflow redesign methods

88%

KPMG/Harris Study

The CEO’s (Old) Job The doctors brought in the patients, so the

hospital’s customer was the doctors – You don’t call your best customer onto the

carpet for problematic behavior, whether it is: Disruptive Too expensive Poor quality

The 99-1 vote But this is not a viable

strategy in today’s world

After We Sort Out the Incentives and the Motivation, What Then?

Physicians are competitive overachievers Physicians are individualistic and prize

their autonomy Physicians aren’t entirely economic

animals Physicians were taught to care for

individuals, not populations or systems

Report Cards May Catalyze Action

Average GPA of US medical school matriculants: 3.68

Culture is Local

Safety Climate Across 100 Hospitals

Safety Climate Across 49 Units in One Hospital

Pronovost/Sexton, QSHC 2005

We Care Deeply About Our Relative Position

Workers’ satisfaction with their income is negatively related to the amount to which they compare their income Actual

Income Comparison Income

Satisfaction

$70,000 $100,000 Lower $65,000 $45,000 Higher

Clark and Oswald. Satisfaction and comparison income. Journal of Public Economics 1996

My House

After We Sort Out the Incentives and the Motivation, What Then?

Physicians are competitive overachievers Physicians are individualistic and prize

their autonomy Physicians aren’t entirely economic

animals Physicians were taught to care for

individuals, not populations or systems

“The core structure of medicine – how health care is organized and practiced – emerged in an era when doctors could hold all the key information patients needed in their heads and manage everything required themselves….We were craftsmen. We could set the fracture, spin the blood, plate the cultures, administer the antiserum. The nature of the knowledge lent itself to prizing autonomy, independence, and self-sufficiency… and to designing medicine accordingly….

But you can’t hold all the information in your head any longer, and you can’t master all the skills. No one person can work up a patient’s back pain, run the immunoassay, do the physical therapy, protocol the MRI, and direct the treatment of the unexpected cancer found growing in the spine. I don’t even know what it means to ‘protocol’ the MRI.”

The Central Tension of Future Medical Practice

Recent guidelines suggest…

Please call the CMO

for approval

What is your reason

for deviation?

Are you some kind of moron?

After We Sort Out the Incentives and the Motivation, What Then?

Physicians are competitive overachievers Physicians are individualistic and prize

their autonomy Physicians aren’t entirely economic

animals Physicians were taught to care for

individuals, not populations or systems

Physicians (Like all Professionals) are Motivated by More than Dollars

Social vs. Market Transactions: The Israeli Daycare Center

“When a social norm collides with a market norm, the social norm goes away for a long time… Money, as it turns out, is very often the most expensive way to motivate people. Social norms are not only cheaper, but often more effective as well.”

Werner R. et al. Health Affairs 2011;30:690-8.

Does P4P Work Better Than Simple Transparency? The Jury is Out

After We Sort Out the Incentives and the Motivation, What Then?

Physicians are competitive overachievers Physicians are individualistic and prize

their autonomy Physicians aren’t entirely economic

animals Physicians were taught to care for

individuals, not populations or systems

Individual Perspective Comes Naturally to MDs

Training and socialization (Fuchs’ “technological imperative”) Moral position as patients’ advocate

(Levinsky’s “Doctor’s Master”) Malpractice fears The weight afforded the unidentified life

(e.g. Oregon’s early rationing stumble)

Costs vs. Benefits: The Big Picture

Benefits

Costs

Day 1

Marginal (or incremental) benefit

Day 2

What to Do Near the “Flat Part of the Curve”?

Benefits

Costs

Individual Perspective: Do this because benefit>risk

Societal/Population Perspective: Don’t do this unless you’ve

paid for everything with better cost:benefit ratios

√ √ √ √ HELP!

?

A Resource Allocation Framework: Encircling a Population

Benefits

Costs

Fuchs V. The doctor’s dilemma: what is “appropriate” care? NEJM 2011

Many interventions are valuable for some patients even if, for the population as a whole, their cost is greater than their benefit…. If the physician is paid on a fee-for-service basis and the patient has open-ended insurance, the scales are tipped in favor of doing as much as possible and against limiting interventions to those that are cost-effective. In that setting, who would benefit from the resources that are saved by practicing cost-effective medicine is not obvious to the physician…. [However] when physicians are collectively caring for a defined population within a fixed annual budget, it is easier for the individual physician to resolve the dilemma in favor of cost-effective medicine. That becomes “appropriate” care. And it is an ethical choice, as defined by philosopher Immanuel Kant, because if all physicians act the same way, all patients benefit.

So, What Should We Do?

Be comfortable w/ new arrangements that drive aligned incentives & population perspective Use comparative data: individual & group level

– Clinically meaningful, well presented – Can look outside, but use mostly local comparators – Begin w/ groups, emphasize positive (at least at

first); later move to individuals, low performers Structured care protocols, forcing functions

– Standardize what can be standardized

So, What Will It Take? (cont.) Hospitalists (& all MDs) need new skill set

– QI/safety, Lean, teamwork, leadership – Work to understand how IT is

helping, and how it’s not – Must have an improvement

and innovation methodology Do your share to promote alignment

– Organization needs to promote/reward MD engagement

Welcome incentives, but be wary of stepping on professionalism and teamwork

Choluteca Bridge, Honduras

Hurricaine Mitch, 1998