Less care will be pro­vided and paid for in the hos­pi­tal

Modern Healthcare - - Q & A -

“Med­i­cal di­ag­noses that re­quire mon­i­tor­ing and pretty high-in­ten­sity care don’t have to be in a hos­pi­tal set­ting. That is where the op­por­tu­nity is.”

James Hin­ton, CEO of Pres­by­te­rian Health­care Ser­vices in Al­bu­querque, has chaired the Amer­i­can Hos­pi­tal As­so­ci­a­tion board for the past year.

Since join­ing Pres­by­te­rian in 1983 and in nearly two decades at its helm, he helped cre­ate the state’s largest in­te­grated health­care provider, which in­cludes a health plan and a med­i­cal group. Mod­ern Health­care Ed­i­tor Mer­rill Goozner re­cently spoke with Hin­ton about his year lead­ing the AHA and the ma­jor changes un­der­way in his home state in in­surer-provider re­la­tions. This is an edited tran­script.

Mod­ern Health­care: What did you ac­com­plish dur­ing your lead­er­ship year?

James Hin­ton:

A lot of what we have been fo­cused on this last year is how can the AHA help hos­pi­tals trans­form from what they’ve been to what they need to be. That takes a lot of dif­fer­ent forms, but it es­sen­tially rec­og­nizes that hos­pi­tal uti­liza­tion in this coun­try is de­clin­ing. Fewer peo­ple go into hos­pi­tals as in­pa­tients, and that care is be­ing in­creas­ingly de­liv­ered in set­tings that are not as hos­pi­tal-de­pen­dent.

MH: More than half of hos­pi­tal ex­ec­u­tives polled by the AHA ex­pect to see rev­enue re­main flat or de­cline over the next five years. How do you sur­vive in a world where, if you’re suc­cess­ful in achiev­ing the triple aim, you wind up with smaller or stag­nant rev­enue?

Hin­ton:

I hap­pen to work in one of the low­est-cost re­gions in the coun­try. So uti­liza­tion is lower, re­source in­ten­sity is lower, and in­ter­est­ingly, qual­ity is equal to or as good as places that are spend­ing up to twice as much as is spent in ag­gre­gate in New Mex­ico. Hos­pi­tals have to rec­og­nize that there is care be­ing de­liv­ered for which there may not be a clin­i­cal jus­ti­fi­ca­tion. Peo­ple who pay for care know that. CMS knows that. Med­i­caid pro­grams know that. In­tel (a ma­jor em­ployer in New Mex­ico) knows that. And so you can’t pro­tect that sys­tem. You can’t ad­vo­cate for that kind of use of ser­vices.

So then what do you do if you’re a hos­pi­tal that is re­ly­ing upon rev­enue that is not sus­tain­able? I think you do a cou­ple things. One is you go to where the rev­enue’s go­ing be­cause the money is go­ing to get spent. It’s just go­ing to get spent in some dif­fer­ent ways. It’s go­ing to be spent on an out­pa­tient ba­sis. It’s go­ing to be spent in am­bu­la­tory clin­ics. It’s go­ing to be spent on facetime ap­pli­ca­tions that con­nect pa­tients with doc­tors but not in a build­ing. It’s go­ing to be spent on ad­vanced IT ser­vices that can con­nect with tele­phone triage and tele­phone-nurse ad­vice. So the care is go­ing to get pro­vided and it’s go­ing to get paid for. It’s just not go­ing to get pro­vided and paid for within a hos­pi­tal.

MH: Are there other op­por­tu­ni­ties for cost sav­ing?

Hin­ton:

Sys­tems must make a very dis­ci­plined anal­y­sis of where your costs are, where your costs need to be and start down that dif­fi­cult road of push­ing down on the hos­pi­tal ex­penses. Those sav­ings can be moved into your in­vest­ment in an am­bu­la­tory-care sys­tem.

MH: Your in­te­grated sys­tem and in­surance arm al­lowed you to pro­vide the en­tire pack­age for em­ploy­ers like In­tel. Is that model the wave of the fu­ture?

Hin­ton:

There are two things hap­pen­ing in the payer world to­day. I think the gov­ern­ment pay­ers, Med­i­caid and Medi­care, are in­creas­ingly look­ing to off­load risk onto de­liv­ery sys­tems. Our state’s Med­i­caid pro­gram has been full cap­i­ta­tion since 1997, and now it is full cap­i­ta­tion for long-term care and be­hav­ioral health as well. Medi­care Ad­van­tage would be another ex­am­ple where health in­surance com­pa­nies and in­surance com­pa­nies that are owned by sys­tems like ours are tak­ing full risk.

The In­tel ex­am­ple shows that em­ploy­ers are in­creas­ingly frus­trated with the tra­di­tional ap­proaches of con­tract­ing with in­surance com­pa­nies to pro­vide em­ployee health­care and have those costs con­tinue to go up and up. Em­ploy­ers are in­no­vat­ing with how they de­liver care and how they con­nect to de­liv­ery sys­tems. They’re also with­out ques­tion go­ing to high­d­e­ductible health plans to en­gage their em­ploy­ees more in the ac­tual cost of care and to cre­ate op­por­tu­ni­ties for sav­ings to be shared with the em­ployee as op­posed to

just a health ben­e­fit pack­age that cre­ates lit­tle in­cen­tive to use care in dif­fer­ent ways.

MH: You also in­tro­duced a hos­pi­tal-at-home pro­gram five years ago. What is the prom­ise in that pro­gram and what are the road­blocks to its wide­spread adop­tion?

Hin­ton:

There are a hand­ful of di­ag­noses where you can con­struct hos­pi­tal-level care in a pa­tient’s home. You’re ob­vi­ously not go­ing to have open-heart surgery in your own home. But med­i­cal di­ag­noses that re­quire mon­i­tor­ing and pretty high-in­ten­sity care don’t nec­es­sar­ily have to be in a hos­pi­tal set­ting. That is re­ally where the op­por­tu­nity is.

MH: Some ex­am­ples?

Hin­ton:

Pneu­mo­nia, con­ges­tive heart fail­ure, some types of sep­sis. When faced with a decision to ad­mit a pa­tient with one of those di­ag­noses, physi­cians in our sys­tem can say ad­mit to one of our other hos­pi­tals or they can say ad­mit to home. If they ad­mit to home, we bring in hos­pi­tal beds, over-bed ta­bles, and we con­vert a room in the pa­tient’s house to look like a hos­pi­tal room. We bring in the tech­nol­ogy for real-time telemedicine in­ter­faces. Physi­cians round on the pa­tients how­ever many times a day as needed. Nurses and other care­givers round on the pa­tients. Meals are brought in.

The re­sults are pretty in­ter­est­ing. For sim­i­lar acu­ity pa­tients, the cost is about $2,000 less, and the qual­ity of the ser­vice is judged by the pa­tient to be higher than if they get ad­mit­ted to the hos­pi­tal. They also don’t fall as much be­cause they’re fa­mil­iar with their sur­round­ings, and they don’t have nearly as high an in­fec­tion rate as hos­pi­tals.

The bar­ri­ers are re­ally that to­day only pa­tients who come through our own health in­surance pro­gram are el­i­gi­ble for that. Medi­care fee-forser­vice has not given us a code that we can bill that ser­vice. No other com­mer­cial in­surance is pay­ing for it. We may have a break­through here soon with a large com­mer­cial payer, but it has been very frus­trat­ing.

MH: When do you think we’ll see a pre­pon­der­ance of the sys­tem paid through some kind of risk-based con­tract­ing?

Hin­ton:

There are a lot of risk-based pay­ments to­day. You could make the ar­gu­ment that a DRG is a risk-based pay­ment. It’s not like the in­dus­try doesn’t have some ex­pe­ri­ence with bud­gets. So the ques­tion is when will there be more to­tal cap­i­ta­tion sim­i­lar to what we have with Med­i­caid or Medi­care Ad­van­tage? I don’t know that I have an an­swer for that be­cause of the di­rec­tion that com­mer­cial pay­ment is go­ing. It’s re­ally go­ing the other di­rec­tion from cap­i­ta­tion—to more high­d­e­ductible health plans, putting dol­lars in the pock­ets of em­ploy­ees and hop­ing that they are more ef­fi­cient with the dol­lars.

High-de­ductible plans and cap­i­ta­tion don’t nat­u­rally con­nect. So I would say gov­ern­ment pay­ment in the next 10 years will be largely cap­i­tated or at risk. My crys­tal ball is not as clear for the pri­vate in­surance mar­ket.

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