Don’t do ev­ery­thing—a strat­egy to re­duce costs, im­prove re­sults

Modern Healthcare - - COMMENT - By Michael E. Porter and Dr. Thomas H. Lee Michael E. Porter is the Bishop Lawrence Univer­sity Pro­fes­sor at the Har­vard Busi­ness School and Dr. Thomas H. Lee is chief med­i­cal of­fi­cer at Press Ganey.

“World-Class Care Right in Your Neigh­bor­hood” sounds good as a mar­ket­ing cam­paign, but as a strat­egy for health­care sys­tems, it is too of­ten a for­mula for high-cost, medi­ocre care. To deliver value, there is a virtue to vol­ume—con­cen­trat­ing pa­tients with sim­i­lar needs at sites where in­te­grated teams can deliver bet­ter out­comes with in­creas­ing ef­fi­ciency.

That means providers should not try to do ev­ery­thing every­where, and that pa­tients should be will­ing to travel a lit­tle fur­ther to get co­or­di­nated, high­er­value care.

We do not mean go­ing to teach­ing hos­pi­tals for ev­ery prob­lem. On the con­trary, to deliver value, rou­tine care should be moved out of ter­tiary hos­pi­tals to lower-cost set­tings. But com­mu­nity hos­pi­tals should not try to meet all the needs of the pa­tients in their lo­cal com­mu­ni­ties, if these needs can be ad­dressed bet­ter and more ef­fi­ciently else­where in the hospi­tal’s sys­tem or through af­fil­i­a­tion with other well-equipped in­sti­tu­tions.

It is not easy for com­mu­nity hos­pi­tals to give up ser­vices such as bari­atric, car­dio­vas­cu­lar and tho­racic surgery—par­tic­u­larly if they are cur­rently prof­itable un­der fee-for-ser­vice pay­ments. But the harsh re­al­ity is that when ev­ery hospi­tal in a re­gion pro­vides such ser­vices, pa­tient vol­umes are di­luted and at many in­sti­tu­tions are in­suf­fi­cient to sup­port the mul­ti­dis­ci­plinary, closely knit teams needed for real ex­cel­lence. Also, costs are higher be­cause staff can­not work ef­fi­ciently, and sup­port­ing ser­vices needed for the con­di­tion (e.g. tai­lored nu­tri­tion coun­sel­ing) are un­avail­able, in­con­ve­nient, or high-cost.

Con­sol­i­dat­ing and con­cen­trat­ing vol­ume in fewer lo­ca­tions is the right thing to do for pa­tients, for so­ci­ety and for de­liv­ery sys­tems. When the vol­ume of pa­tients with a par­tic­u­lar con­di­tion is con­cen­trated, providers can build what we call “in­te­grated prac­tice units ” —multi-dis­ci­plinary teams that are com­pletely fo­cused on meet­ing the most com­mon needs of pa­tients with that con­di­tion over the full care cy­cle. In treat­ing more pa­tients with a par­tic­u­lar con­di­tion, out­come and cost mea- sure­ments im­prove, which can en­able gains in qual­ity and ef­fi­ciency, led by team lead­ers who wake up ev­ery day think­ing about how to do a bet­ter job. Vol­ume also al­lows the in­sti­tu­tion to con­tem­plate bun­dled-pay­ment con­tracts, as well as in­cen­tives (fi­nan­cial and non-fi­nan­cial) to re­ward clin­i­cians for im­prov­ing out­comes and ef­fi­ciency for the con­di­tion.

This is not an ide­al­is­tic fan­tasy. We are start­ing to see many health sys­tems be­gin to ra­tio­nal­ize ser­vices to fewer and more ap­pro­pri­ate hos­pi­tals and sites. The Emory Health­care sys­tem in At­lanta has con­sol­i­dated otorhi­no­laryn­gol­ogy and in­fu­sion ser­vices at one of its com­mu­nity hos­pi­tals, and lab­o­ra­tory fa­cil­i­ties at its teach­ing hospi­tal. The Cleve­land Clinic has shifted ob­stet­rics out of its main cam­pus into com­mu­nity hos­pi­tals, re­duced the num­ber of trauma cen­ters and con­cen­trated car­diac surgery at three lo­ca­tions.

Can con­sol­i­da­tion save lives as well as im­prove value? Look at what hap­pened start­ing in 2010, when Lon­don con­cen­trated im­me­di­ate care for pa­tients with stroke at eight of its 34 hos­pi­tals. At these eight ge­o­graph­i­cally dis­persed hos­pi­tals (no cit­i­zen is more than 30 min­utes away), mul­ti­dis­ci­plinary stroke teams are on duty 24/7. Stroke vol­umes at each of these sites went from be­tween 200 and 400 per year to well over 1,000. The re­sults—a 25% de­cline in 90-day mor­tal­ity, and a 6% de­crease in to­tal spend­ing on stroke care, de­spite the greater num­ber of sur­vivors.

Pro­vid­ing care in fewer sites goes against long­time cul­tural norms in medicine that as­sume ev­ery­one does ev­ery­thing in their spe­cialty, and that physi­cian au­ton­omy is the best guar­an­tee of good care. But the im­per­a­tive to im­prove value and cope with de­clin­ing re­im­burse­ment means that we must re­ex­am­ine not only these norms, but many oth­ers. Pride must come from ex­cel­lent out­comes and ef­fi­ciency, not va­ri­ety in a physi­cian’s work­day.

For pa­tients, driv­ing a lit­tle fur­ther— some­times pass­ing by the lo­cal hospi­tal that has pro­vided all their pre­vi­ous care—might seem like an in­con­ve­nience. How­ever, get­ting care at an in­te­grated prac­tice unit will not only lead to bet­ter out­comes, but far greater con­ve­nience, be­cause a team can bet­ter co­or­di­nate care, sched­ule mul­ti­ple ap­point­ments on the same visit and pro­vide the sup­port ser­vices needed to re­duce the time to re­cov­ery.

What about the ef­fect of con­sol­i­da­tion on com­pe­ti­tion? We are ad­vo­cat­ing a re­duc­tion in the of­ten dozens of du­plica­tive sites in a re­gion, many part of the same health sys­tem. Ex­pe­ri­ence from other in­dus­tries sug­gests that as long as there are three to four ef­fec­tive com­peti­tors in an area, com­pe­ti­tion be­comes stronger and value rapidly im­proves. This step is a win-win-win. For pa­tients, for providers and for so­ci­ety.

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