De­liv­er­ing bet­ter out­comes and pa­tient ser­vice re­duces costs

Modern Healthcare - - Q&A -

“We’re not where we need to be, but we’re cer­tainly im­prov­ing.”

Dr. Lee Sacks has been ex­ec­u­tive vice pres­i­dent and chief med­i­cal of­fi­cer since 1997 of not-for-profit Ad­vo­cate Health Care, the largest in­te­grated de­liv­ery sys­tem in Illi­nois with 11 hos­pi­tals and more than 4,000 af­fil­i­ated physi­cians. Sacks is also CEO of Ad­vo­cate Physi­cian Part­ners, which in 2004 formed a clin­i­cal in­te­gra­tion pro­gram to im­prove clin­i­cal out­comes and lower costs. Par­tic­i­pat­ing physi­cians, in­clud­ing many in­de­pen­dent doc­tors, re­port on more than 100 in­di­vid­ual per­for­mance mea­sures and fo­cus on chronic dis­ease care, health and well­ness, ef­fi­ciency, care co­or­di­na­tion/pa­tient safety and pa­tient ex­pe­ri­ence. Ad­vo­cate also op­er­ates a Medi­care ac­count­able care or­ga­ni­za­tion un­der the Shared Sav­ings Pro­gram. Sacks spoke with Mod­ern Health­care’s Jes­sica Zig­mond about the clin­i­cal in­te­gra­tion pro­gram and the big­gest chal­lenges fac­ing hos­pi­tals, in­clud­ing health­care re­form, Medi­care cuts and the two-mid­night rule.

Mod­ern Health­care: What would you iden­tify as the great­est changes you’ve seen in health­care since you be­came CMO at Ad­vo­cate in 1997?

Dr. Lee Sacks: Sev­eral things have changed dra­mat­i­cally. One is the in­creased fo­cus on safety, and that’s go­ing across the in­dus­try. We’re not where we need to be, but we’re cer­tainly im­prov­ing. I’d also say that we’ve gone from be­ing provider-cen­tric to pa­tient­fo­cused. And clearly, the im­por­tance of ef­fi­ciency and man­ag­ing costs has risen to new heights. Those are the three things that re­ally jump out at me.

MH: Please talk about Ad­vo­cate Physi­cian Part­ners, of which you are CEO. What led Ad­vo­cate to cre­ate the clin­i­cal in­te­gra­tion pro­gram in 2004?

Sacks: Ad­vo­cate Physi­cian Part­ners is a clin­i­cally in­te­grated net­work of 10 Ad­vo­cate physi­cian hospi­tal or­ga­ni­za­tions, two med­i­cal groups and a re­cent af­fil­i­a­tion with a non-Ad­vo­cate physi­cian hospi­tal or­ga­ni­za­tion. Ini­tially, Ad­vo­cate Physi­cian Part­ners was fo­cused on do­ing cap­i­tated HMO busi­ness, and at one point we had 400,000 lives. But as ev­ery­body knows, the mar­ket changed and the pop­u­lar­ity of HMOs de­clined. Our mar­ket was al­ways a PPO mar­ket with fee-for-ser­vice, and in a strate­gic plan­ning event with our physi­cians, they re­ally iden­ti­fied three things that they wanted the or­ga­ni­za­tion to fo­cus on. One was as­sis­tance with in­for­ma­tion tech­nol­ogy. Two was as­sis­tance in demon­strat­ing the value they were cre­at­ing for their non-HMO pa­tients as they felt there was one stan­dard of care. And three was as­sis­tance in con­tract­ing for the PPO net­works. When you put those three things to­gether, it re­ally led us to fo­cus on clin­i­cal in­te­gra­tion and where we’ve gone over the last decade.

MH: What are some of the pro­gram’s pri­mary goals look­ing ahead?

Sacks: The pro­gram has evolved over time. While we’ve fo­cused on preven­tion and chronic dis­ease man­age­ment in an era of value, we re­ally have height­ened the fo­cus on ef­fi­ciency mea­sures, things like read­mis­sion, length of stay, re­duc­ing ad­mis­sions that are po­ten­tially avoid­able with chronic con­di­tions as well as in­net­work care co­or­di­na­tion since we have data from our payer part­ners that says when care re­mains within the Ad­vo­cate net­work there’s fewer read­mis­sions and shorter length of stay and de­creased costs.

MH: Given your lead­er­ship in these ar­eas at Ad­vo­cate, what char­ac­ter­is­tics have you found to be es­sen­tial in work­ing with hos­pi­tals and also in work­ing with physi­cians and other clin­i­cians?

Sacks: You need to be a good lis­tener as a leader. You need to be able to com­mu­ni­cate clearly. But at the end of the day, I find that lead­ers, whether on the physi­cian side or the hospi­tal side, will re­spond to good data and good ev­i­dence. And if there’s a thor­ough dis­cus­sion, they gen­er­ally will come to the same con­clu­sion, es­pe­cially if you can frame it in terms of what’s best for the pa­tients that we serve.

MH: Providers say Medi­care’s Re­cov­ery Au­dit Con­trac­tor pro­gram comes at a huge cost and ad­min­is­tra­tive bur­den to hos­pi­tals. How

“If you fo­cus on meet­ing the needs of the pa­tients with ef­fi­ciency, bet­ter out­comes and ser­vice, it will help you sur­vive these chal­leng­ing times.”

would you like to see the RAC pro­gram im­proved?

Sacks: Let’s step back and re­call the un­der­pin­nings of the pro­gram. There was the thought that there was a lot of in­ap­pro­pri­ate cod­ing that led to ex­cess pay­ments, and I think the data would re­fute that. Our ex­pe­ri­ence is that we win over three­quar­ters of the au­dits but it takes a huge ad­min­is­tra­tive bur­den and a lot of time and un­cer­tainty. I think in­dus­try­wide, the per­cent­ages are al­most as high as ours. So, is there a way to stream­line and sim­plify and just fo­cus on a hand­ful of con­di­tions where the out­comes are much dif­fer­ent?

The other frus­tra­tion has been that over time the num­ber of au­dits seems to in­crease in spite of the fact that over three-quar­ters of them end up in our fa­vor. The anal­ogy I’d use is, if you’re not catch­ing a lot of fish, you throw in more fish­ing lines, and even­tu­ally, even though one out of seven or eight catch a fish, you’re get­ting as many as you’d want. There’s got to be a bet­ter way to do this be­cause we’ve just added an in­cred­i­ble ad­min­is­tra­tive bur­den.

MH: Sim­i­larly, what do you think the CMS could or should do with re­gard to the two-mid­night rule that was in­cluded in the in­pa­tient prospec­tive pay­ment rule for 2014?

Sacks: The two-mid­night rule has been in­cred­i­bly frus­trat­ing for clin­i­cians, and I don’t think that we’ve seen the im­pact on pa­tients to any ex­tent yet. That’s go­ing to grow. When pa­tients are in a hospi­tal un­der ob­ser­va­tion, they don’t dif­fer­en­ti­ate, and ul­ti­mately they find out that their ben­e­fits are dif­fer­ent be­cause it’s Medi­care Part B ver­sus Part A or it doesn’t count to­ward qual­i­fi­ca­tion for cov­er­age in a skilled-nurs­ing fa­cil­ity. This all goes back to the ten­dency to­ward shorter length of stay and Medi­care’s re­al­iza­tion that pay­ing a full DRG for short length of stay was an over­pay­ment.

Let’s back up and say rather than try­ing to be ar­bi­trary, as the two-mid­night rule is, can we make an ad­just­ment in the over­all DRG pay­ment for shorter lengths of stay that would ac­com­plish the goal but make it much sim­pler and ac­knowl­edge that if the care is given in­side an acute-care fa­cil­ity, we don’t need to dif­fer­en­ti­ate be­tween ob­ser­va­tion and ad­mis­sion and cre­ate all kinds of hoops that the physi­cians have to leap through and put the pa­tients in the mid­dle.

MH: You men­tioned you haven’t seen an ef­fect yet on pa­tients. Do you mean that once pa­tients un­der­stand the im­pacts of this that they may not seek proper care?

Sacks: We oc­ca­sion­ally get com­plaints from pa­tients. Anec­do­tally, our physi­cians hear from their pa­tients the sur­prise that when they are billed and file their in­sur­ance claims, that be­cause it’s pro­cessed un­der Part B when they’re in ob­ser­va­tion, that they have a big­ger out-of-pocket ex­po­sure as well as if they end up in a skilled-nurs­ing fa­cil­ity, it doesn’t help qual­ify them from meet­ing the three in­pa­tient days that re­quires Medi­care to pay. Ul­ti­mately, there’s a lot of frus­tra­tion there. I know some pa­tients are rais­ing it with their elected of­fi­cials. I ex­pect that to in­crease as the num­ber of ob­ser­va­tion cases has gone up in dou­ble dig­its since the im­ple­men­ta­tion of two-mid­night rule.

MH: Mov­ing on to the Af­ford­able Care Act, what has been the great­est chal­lenge Ad­vo­cate has seen re­gard­ing the in­sur­ance ex­changes, and what is Ad­vo­cate do­ing to help con­sumers learn about the law’s cov­er­age op­tions?

Sacks: Ad­vo­cate was proac­tive, and ev­ery one of our hos­pi­tals has cer­ti­fied ap­pli­ca­tion coun­selors who’ve been avail­able to meet with pa­tients and help them in seek­ing cov­er­age. Clearly, there’s been a lot of frus­tra­tion and con­fu­sion re­lated to the roll­out and the de­lays and changes. One of the premises of the Af­ford­able Care Act was that there was go­ing to be a sig­nif­i­cant in­crease in cov­er­age, and as a re­sult there would be an off­set with de­creased re­im­burse­ment to hos­pi­tals. The off­set has taken place, and it’s pretty clear there won’t be the in­crease in cov­er­age, at least not in this year, so it’s cre­at­ing fi­nan­cial pres­sures. We’ve al­ready seen bad debt in­crease re­lated to high de­ductibles, and our physi­cians are see­ing the same thing. So in the short term at least, there are a lot of un­in­tended con­se­quences. We are all hope­ful that in the long term it’s go­ing to lead to close to uni­ver­sal cov­er­age and al­low all Amer­i­cans to have ac­cess to the health­care that they need and de­serve.

MH: Have you had a chance to read Pres­i­dent Obama’s pro­posed 2015 budget and is there some­thing in the budget that stood out to you?

Sacks: The pres­i­dent has pro­posed re­duc­ing Medi­care spend­ing by over $400 bil­lion, and that leads to about $350 bil­lion that would come from health­care providers. And spe­cific to Ad­vo­cate, we’re the largest trainer of pri­mary-care physi­cians in our state, and cuts to grad­u­ate med­i­cal ed­u­ca­tion and into ru­ral com­mu­ni­ties—we have one crit­i­cal-ac­cess hospi­tal in Eureka, Ill.—both of those could have sig­nif­i­cant con­se­quences re­lated to ac­cess to care over the long term. So we’re hope­ful that this is just a pro­posal. We know the pol­i­tics in Wash­ing­ton. Hope­fully, both Congress and the ad­min­is­tra­tion will be lis­ten­ing to the is­sues and fig­ure out a mid­dle ground that will pre­serve the im­por­tant parts of our health­care sys­tem as well as the ed­u­ca­tion of the next gen­er­a­tion of health­care pro­fes­sion­als.

MH: What is your ad­vice to hos­pi­tals, par­tic­u­larly smaller ones that are ea­ger to im­ple­ment these re­forms but are wor­ried that con­tin­ued pay­ment cuts will hin­der their ef­forts? Where should their pri­or­i­ties be?

Sacks: We found that if you fo­cus on the triple aim, par­tic­u­larly pro­vid­ing safer, bet­ter out­comes with out­stand­ing ser­vice, it’s go­ing to fa­cil­i­tate the re­duc­tion in costs be­cause it elim­i­nates com­pli­ca­tions, ad­verse events, etc., that all drive up costs. While clearly there’s a lot of work that can be fo­cused specif­i­cally on cost, if you fo­cus on meet­ing the needs of the pa­tients with ef­fi­ciency, bet­ter out­comes and ser­vice, it will serve the or­ga­ni­za­tion well and help you sur­vive these chal­leng­ing times.

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