Commentary

Interview: Competition to employ physicians heats up

Karen M. Cheung — Thu, 09 Feb 2012 13:45:28 -0500

Karen M. Cheung

Like the 1990s, hospital-physician employment agreements are exploding, fueled by health reform. In fact, 83 percent of physician employment agreements in 2011 were with hospitals (as opposed to physician practices), according to recent data from physician search firm, The Medicus Firm.

FierceHealthcare caught up with Jim Stone, president and cofounder of The Medicus Firm, to hear his thoughts on what recruitment strategies work, the pitfalls of employment agreements and if today's employment models will work this time around.

FierceHealthcare: We've seen a lot of national stories of hospitals and health systems employing physicians and acquiring physician practices. How much competition is there between health systems to employ, merge or acquire physicians?

Jim Stone

Jim Stone: Nationally, we've seen hospitals and larger systems compete to acquire the more sizable, successful, busy practices in an attempt to reinforce or bolster their referral base in strategic locations. Therefore, in metro- and mid-sized communities where there are multiple large systems, there could be a lot of competition against other systems to acquire a particular practice in the area. In smaller communities, we have not seen as much of this, as many hospital executives remember the challenges that ensued after the last cycle of group acquisitions by hospitals in the 1990s. Hopefully this time around, the consolidation among healthcare systems and providers will be a positive thing for the industry.

Employment is another dimension of this trend, and we're seeing employment increase in popularity in many types of communities. Most physicians simply do not want to deal with the rigors of running a practice, particularly in the current environment. Competition to recruit candidates and employ them is as fierce as we have seen.

FH: According to Medicus data, 88 percent of placed physicians are offered signing bonuses, and 93 percent get relocation allowances. Is that a sign of the competitive market for physicians?

JS: Absolutely. Physicians need cash for student loans and other debt, for real estate and to establish themselves and their families in a new community. The average physician student loan debt has been quoted at $140,000-$200,000, and we see some coming out of training with more than $250,000 in debt.

The employer that can simplify the physician's transition and makes it the easiest for a physician to relocate, establish and grow a practice, will be the employer that ultimately attracts, signs and retains that physician.

FH: The data also indicate that female physicians are more likely to be employed. Why is that?

JS: The percentage of women in medical schools has been on the rise for the past several years so women are subsequently becoming a larger part of the physician workforce. In 2010-11, women made up almost half of the medical school class, whereas in 1982-83, women made up less than a third of all medical students, according to the American Association of Medical Colleges. The number has been growing steadily over those years, and subsequently the proportion of females in the physician market has also increased.

Additionally, over the past 10 to 20 years, the division of labor has equalized in many households; we see more husbands of female doctors staying at home or working part-time to help with childcare, which is also allowing more women to focus on physician careers.

FH: Does the of age of the physician make a difference in their "recruitability"? Are younger physicians more likely to seek employment arrangements?

JS: There are opportunities for physicians of all ages. However, we recently conducted a survey of physicians which revealed that many more experienced physicians feel overlooked by employers; they may have to be more proactive than recent grads, only because some employers worry (unnecessarily) about retraining, turnover and retirement.

FH: What are the benefits of an employment agreement for the physicians? What's in it for the hospitals? Do they share common goals?

JS: It is a symbiotic relationship. They share common goals in that hospitals and physicians need each other to survive and thrive for the long-term future.

For physicians, hospitals offer (hopefully) stability, resources (EMR technology, capital equipment, support staff) and security that physicians need in today's economic and healthcare environments. The Affordable Care Act and HITECH Act, combined with ICD-10 and the sustainable growth rate issue are all creating a very uncertain, unstable set of circumstances for smaller private practices to remain sufficiently profitable. Therefore, physicians are increasingly seeking employment opportunities more frequently than in the past decades, when private practice was the "holy grail."

For hospitals, they must have an adequate physician referral base to ensure diagnostic procedures, surgeries and hospitalizations take place in their facility as opposed to a local or regional competitor. Physicians are the lifeblood--how they make money to stay open and profitable. Without physicians to refer, admit and treat patients, hospitals are basically just really sterile hotels.

FH: On the flip side, what's the risk in a physician employment model? What hesitations might physicians have?

JS: The risks fall into several categories:

Compensation: Physician pay is a hot-button issue. Physicians need to be paid well for what they do; they sacrificed many years of their lives to train to be physicians, and the job is enormously stressful and high-pressure.

Is a pay-for-quality/outcomes compensation model the answer? Some argue that current models pay for volume of patients or procedures and that could influence patient care decisions in ways that may not necessarily be in the best interest of the patient. In my experience, most physicians take medicine more seriously than to be influenced so easily by money alone.

However, they may be more influenced by fear of a malpractice lawsuit. Many studies show that doctors order too many tests and procedures to prevent a lawsuit, not to earn a higher bonus, so I'm not sure that changing the compensation model would alleviate that issue.

Production expectations/management in any physician employment model involve the pay structure and the requirements/confinements placed on the physician. Some physicians might hesitate to give up the autonomy of being their own boss, owning their own business and calling the shots. This is what happened in the 1990s when physician employment models were also popular for a few years. However, they didn't last long nor were they very successful because physicians wanted more autonomy, and they could earn more money on their own.

Control: This time around, I think physicians will be more willing to sacrifice some of their autonomy, as long as they have the primary input on the patient's care. Physicians may be more tolerant of some managerial/administrative oversight than they were in the 1990s, due to the changing circumstances. Also, the employment contracts of this era seem to provide an income more comparable to private practice.

Restrictive covenants: Restrictive covenants are like a "non-compete" clause; they prevent a physician from leaving one hospital for another within the service area.

FH: What type of institution (nonprofit, bed size) do you recommend the physician employment model to work best in? Does it work for all institution types?

JS: The type and size of the institution are not what determines the success of a physician's employment. The efficiency and effectiveness of a hospital's administration/operations, the quality and scope of services it provides, the reputation it has and how well it compares with its competition in the area determine a hospital's success, including the success of their employed physicians, more so than its tax status or size.

FH: What other advice do you have for healthcare executives?

JS: Be creative and open-minded. Decide what type of physician you want to attract and create a practice opportunity and lifestyle that will attract that type of physician to your facility.

For example, a recent story about Ashland Health Clinic, which allows time for their physicians to travel on mission trips, was very interesting. The administrators of that hospital obviously put a lot of thought into their recruiting strategy to attract like-minded physicians with charitable, altruistic values.

Put yourself in the physician's shoes. Keep in mind that physician candidates get hounded by recruiters on a daily basis. What is going to make a candidate want to ignore all those other opportunities in favor of yours?

Recruiting is a tough, competitive process, so remain positive. If you get turned down by a candidate, remember you only need one physician to fill an opening. Leverage that candidate's feedback about your opportunity to help you succeed in recruiting future candidates. Once you identify that one physician you know is the best fit for your staff, do whatever you can to come to a mutual agreement with an employment contract. Tailor the perks and offer specifically to that physician if you have the capability and resources to do so.

This interview has been edited and condensed for clarity.

Related Articles:
Hospitals latching onto physician staff with pay, employment
Hospitals employing 32% more physicians
3 keys to fair hospital employment contracts
Hospital employment a losing proposition in the short-term
Increased doc employment at hospitals a 'building block' for coordinated care
70% hospitals, health systems plan more physician employment
32% of physicians desire hospital employment

Readmission rate culprits remain elusive

Karen M. Cheung — Fri, 27 Jan 2012 10:16:00 -0500

Hospitals know they have to care about readmissions to improve patient care and protect their wallets, with reimbursements changes tied to performance. But do they know what really causes readmissions and what they can do to avoid them?

Despite ongoing research to keep patients from bouncing back to the hospital, many organizations are still struggling. In fact, even the number one hospital in the country with the lowest readmission rate for congestive heart failure doesn't know exactly how they accomplished it. St. Patrick Hospital in Montana recently learned it earned the highly desirable spot, based on data from the Center for Medicare & Medicaid Services from 2007 to 2010 at more than 4,000 hospitals nationwide, the Missoulian reported. St. Patrick's Hospital's readmission rate is 18.2 percent, compared to the national average of 24.8 percent. Heart failure is the number one reason of readmissions, the article noted.

Dr. Bradley Berry, a congestive heart failure and cardiac imaging specialist at the International Heart Institute at St. Patrick's, attributes the low readmission rate to appropriate care the first time, frequent follow-up appointments and patient education, including discussing lifestyle changes and eating habits.

The hospital has applied a Robert Wood Johnson Foundation grant to find out what they're doing right.

"We really wanted to understand the cost of care for congestive heart failure patients," Chief of Acute Care Services Joyce Dombrowski said. "They cost a lot of dollars if they're [constantly] in and out. The government wants to prevent readmission. We need to know why we are successful and we feel we have a moral obligation to share it [with other hospitals] so patients elsewhere have the same advantages."

Just this week, researchers st Kaiser Health News and the Yale School of Medicine butted heads (or, rather, studies) over whether or not socioeconomic factors contribute to higher readmission rates.

If researchers and leaders at the top hospitals in the country still haven't solved the readmissions mystery, what chance do other hospitals stand? Still, even if the culprits for readmissions are elusive, it doesn't mean that hospitals will ever stop trying to find them. - Karen (@FierceHealth)

How to handle aging physicians

Karen M. Cheung — Thu, 12 Jan 2012 15:14:11 -0500

With a national physician shortage and growing numbers of insured patients coming down the pike, hospitals are facing the conflict of hanging onto their physicians who are growing older while offering care for their expanding patient population. But are older physicians fit for practice?

A study published in the British Medical Journal this week indicated that surgeons who are not too old and not too young are the safest, that is, had the fewest patient complications. This Goldilocks data found that the sweet spot for optimal performance is a surgeon between the ages of 35 and 50, who provide safer care than their older and younger colleagues. The thought-provoking study indicated that surgeons with five to 20 years of experience since graduation had better patient outcomes. The surprising part wasn't that middle-aged physicians fared better than green surgeons; the surprising part was that they did better than physicians who had more years of experience on them. What was the reason for this sweet spot? Study authors concluded that more research is needed but noted it could have to do with mental fatigue from taking on more surgeries, suggesting burnout or reduced competency.

While most can respect the expertise and experience that older physicians have to offer, what are hospitals to do when their providers get on in their golden years?

Kenneth Cohn, a practicing general surgeon and CEO of HealthcareCollobration, described a situation with an 83-year-old general practitioner, seen as a "ticking time bomb." Does the physician's senior citizenship status negate his hospital experience during the past five decades? Even though there may not be any complaints (yet) about the physician's performance, the medical executive committee is charged with tackling this delicate issue and preventing patient harm, Cohn wrote in a Hospital Impact blog post. But what could be a fair solution, as physicians and other practitioners inevitably age?

As many hospital executives have noticed during the past decade, physicians are delaying retirement. In fact, more than half (52 percent) of surveyed physicians said their retirement plans have changed since the recession hit, according to a Jackson & Coker survey last year. Out of these physicians whose plans have changed, a quarter (25 percent) of physician respondents said they find locum tenens or part-time assignments appealing. Offering part-time work could be one way to usher providers into more manageable workloads.

Another solution is to offer an advisor role, in which the physician can coach other providers. That respects their years of experience and allows the older physician to mentor the next generation of doctors.

What about physicians who have no interest in slowing down? For example, Fred Goldman, the oldest licensed physician practicing medicine in Ohio, turned 100 last month. The century-old internist started his private practice in 1946 and said he has no intention of retiring anytime soon, as FiercePracticeManagement previously reported.

For physicians who are committed to continuing to practice like Goldman, some hospitals are implementing mandatory assessments. The strategy requires all physicians over a particular age to undergo a physical exam, as the Credentialing Resource Center Blog recommended. Consider including in the medical staff bylaws a policy, which balances the rights of the provider with the safety of patients. The institution should decide what is an appropriate age, the post noted.

As some Hospital Impact commenters pointed out, there are age discrimination implications of mandatory assessments. Although organizations theoretically could use a blanket policy to assess all providers (regardless of age), there are associated costs with these kinds of tests--who can afford to pay for that?

Is it fair (not to mention, legal) to include a medical staff policy for practitioners over a certain age? How has your institution cared for your patients and aging physicians? - Karen (@FierceHealth)

Pioneer ACOs to ring in the new year

Karen M. Cheung — Thu, 22 Dec 2011 15:49:31 -0500

The Center for Medicare & Medicaid Innovation finally released the much anticipated list of the Pioneer accountable care organizations (ACO) this week. Although industry experts predicted the final list would rack up to 30 ACOs, CMS revealed 32 lucky--and assumingly much deserving--organizations.

So what's the big deal, and how is this announcement any different than the numerous press releases that the regulatory agency puts out? The Pioneer ACOs will lead the charge in changing how providers are paid, moving away from the traditional fee-for-service system to a pay-for-performance approach that rewards quality over quantity. Launching even sooner than the Medicare Shared Savings Program, the Pioneer ACOs are just that, pioneers, and leaders in the healthcare revolution.

However, their ventures into uncharted territories don't come without warnings. Although the 32 ACOs can reap the benefits of the program through Medicare reimbursements, they also assume greater risk. Unlike the Shared Savings Program, starting in year three of the initiative, those organizations that have earned savings during the first two years will be eligible to move to a population-based payment arrangement and full risk arrangement that can continue through an optional fourth and fifth year.

But it's also important to note that Pioneer ACOs are only one model of shared savings. Other providers across the nation are experimenting with care coordination that haven't applied or haven't been accepted into the Medicare Shared Savings Program or the earlier Pioneer ACO Program.

For example, the surprise of many, Mayo Clinic, Cleveland Clinic, Geisinger Health System and Intermountain Healthcare--the most likely poster children for accountable care--all passed on joining the CMS programs. Their reason, like many other providers, was that the rules were too prescriptive and didn't offer enough incentives. That leaves the heavy hitters of healthcare and others seeking alternative routes to collaborative accountable care (not to be confused with the governmental version of accountable care organizations).

Acting CMS Administrator Marilyn Tavenner recognized that "healthcare providers are at different stages in their work to improve care and reduce costs," she said in a Monday press release about the menu of ACO options. (CMS also is testing the Advance Payment ACO Model for physician-owned and rural providers enrolled in the Shared Savings Program.)

Whether through CMS or through individual ventures, the nation certainly will be watching accountable care collaborations and partnerships.

With the first performance period to start on Jan. 1, 2012, the Pioneer ACO is estimated to save Medicare up to $1.1 billion. These selected Pioneer ACOs surely will be in the spotlight:

Northeast (9)

Atrius Health Services, Eastern and Central Massachusetts
Beth Israel Deaconess Physician Organization, Eastern Massachusetts
Bronx Accountable Healthcare Network, New York
Dartmouth-Hitchcock ACO, New Hampshire and Eastern Vermont
Eastern Main Healthcare System, Central, Eastern and Northern Maine
Mount Auburn Cambridge Independent Practice Association, Eastern Massachusetts
Partners Healthcare, Eastern Massachusetts
Renaissance Medical Management Company, Southeastern Pennsylvania
Steward Health Care System, Eastern Massachusetts

South (3)

JSA Medical Group, a division of HealthCare Partners, Orlando, Tampa Bay and surrounding South Florida
North Texas Specialty Physicians, Tarrant, Johnson and Parker counties in North Texas
Seton Health Alliance, Center Texas

Midwest (10)

Allina Hospitals & Clinics, Minnesota and Western Wisconsin
Bellin-Thedacare Healthcare Partners, Northeast Wisconsin
Fairview Health Systems, Minneapolis, Minn., metropolitan area
Franciscan Health System, Indianapolis and Central Indiana
Genesys PHO, Southeastern Michigan
Michigan Pioneer ACO, Southeastern Michigan
OSF Healthcare System, Central Illinois
Park Nicollet Health Services, Minneapolis, Minn., metropolitan area
TriHealth, Inc., Northwest Central Iowa
University of Michigan, Southeastern Michigan

West (10)

Banner Health Network, Phoenix, Arizona metropolitan area
Brown & Toland Physicians, San Francisco Bay Area, Calif.
Healthcare Partners Medical Group, Los Angeles and Orange Counties, Calif.
Healthcare Partners of Nevada, Clark and Ny Counties, Nev.
Heritage California ACO, Southern, Central and coastal California
Monarch Healthcare, Orange County, Calif.
Physician Health Partners, Denver, Colo., metropolitan area
Presbyterian Healthcare Services - Central New Mexico Pioneer Accountable Care Organization, Central New Mexico
Primecare Medical Network, Southern California
Sharp Healthcare System, San Diego County

On behalf of the Fierce team, I'd like to thank all of our readers for following us this year. We won't publish next week, but we'll be back Tuesday, Jan. 3, 2012. I look forward to what is sure to be an exciting 2012 year in healthcare. -Karen (@FierceHealth)

Beware of gifts: Why a cigar isn't just a cigar

Karen M. Cheung — Thu, 15 Dec 2011 16:47:54 -0500

'Tis the season of giving--and receiving. As hospital staff and leadership spread merriment and joy, they should use caution in accepting gifts, particularly prevalent during the holiday season.

Should a physician accept a box of imported cigars from a patient? What about a $200 hot tub? Dr. Richard Kovar, a Virginia family physician, once received a patient's offer to pay for a hot tub. The doctor said he could have used one at the time, but Dr. Kovar declined, according to American Medical News. "That would have been totally inappropriate," he said. "I told him I just really wouldn't feel comfortable taking it."

Even though there are no definite rules for providers to determine whether to accept a gift from patients, according to the American Medical Association (AMA) policy, the AMA does offer guidance about how to approach gift-receiving between providers and patients; gifts should not be "disproportionately or inappropriately large." Pricey gifts could either influence providers or give the appearance of doing so.

"No fixed value determines the appropriateness or inappropriateness of a gift from a patient," the policy states. One way to think about it is whether the provider would feel comfortable if colleagues or the public knew about the gift. If not, chances are accepting the gift isn't a good idea.

Drawing from my own experience, some journalists have a no-more-than-a-coffee rule, meaning that reporters voluntarily (although sometimes mandated by their news organization) reject gifts that are worth more than the cost of a coffee at $5. I've known journalists who have taken this informal policy to heart and even turned down appetizers, alcoholic drinks, books, and computer memory cards, among other things, to resist even the appearance of bias or preference.

And although the AMA does not put a price tag cap on the gift amount, there will be strict rules regarding gifts from drug and device manufacturers, with a proposed rule released by the Centers for Medicare & Medicaid Services (CMS) this week.

Under the Physician Payment Sunshine Act, gifts to providers that are worth more than $10 will soon be a matter of public record. With this transparency rule, drug and device manufacturers must report items they give providers, such as expensive dinners, golf vacations, and consulting and speaker fees, or else face penalties of up to $1 million if the manufacturers knowingly fail to report such payments or gifts.

In a win for consumer rights, CMS said it would post the payment information on a public, searchable website of aggregated data, reports Reuters UK.

But the drug and device makers got the gift of time this week with CMS' delayed rule. They now have until sometime in 2012 (when the final rule publishes) instead of the originally planned Jan. 1, 2012 to report such data.

As CMS collects incoming comments, its final rule could affect the way providers and manufacturers conduct relationships (some of them, too close for comfort) and the way they give gifts for holiday seasons to come.

Will the new CMS rule affect what gifts you take? Have any stories about gifts from patients or manufacturers? How did you handle them? Let us know! - Karen (@FierceHealthcare)

Lean Six Sigma, care coordination heals fragmented hospital

Karen M. Cheung — Thu, 08 Dec 2011 14:06:30 -0500

Under healthcare reform, a new trend of care coordination management is developing across hospitals, primary care provider offices, home health agencies, and patients' homes. Hospitals are taking a more active role in what happens to patients--especially those with chronic conditions--after discharge, as reimbursements are tied to readmission rates. Care coordinators follow patients and work with other healthcare professionals in hopes that they won't return. So far, some of the leading hospitals are experimenting with the concept and showing impressive results.

For example, University of California, San Francisco, found that transitional care programs with nurse coordinators helped reduce readmissions of older heart failure patients by 30 percent and helped save Medicare $1 million per year, according to researchers.

Similarly, Mercy St. Vincent's Medical Center in Toledo, Ohio, improved quality thorough its own care coordination model while incorporating Lean Six Sigma principles. This safety-net hospital improved outcomes and saved on costs, following improvements of care coordination, implementation of a culture of efficiency, data-rich technology, and real-time operation performance measurement.

Ben Sawyer

Lean Six Sigma approach
In a gist, Lean Six Sigma approaches look at what the customer wants, while assessing value and nonvalue. The aim is to eliminate that nonvalue and recreate work flow with standardization to increase positive impacts for the customers, that is, patients.

"Hospitals on a daily basis are paralyzed by the urgent so they can't get to the important," said Ben Sawyer, executive vice president of hospital software provider Care Logistics. Using the principles of Lea Lean Six Sigma can help identify and unlock the system constraints that blocks optimal performance, he added.

A holistic approach
Mercy St. Vincent aimed to reduce waste, wait times, nonvalue-added work, and rework and develop a set of new standard operating procedures, measures, and milestones. When it started the improvement initiatives in 2007, it found, like many health systems, its work and therefore quality measures were unit-specific and didn't always paint a true picture of the performance of the whole organization.

Imran Andrabi

"What was lacking was this coordination of the entire system that was centered around the patient," former Mercy St. Vincent CEO Dr. Imran Andrabi told FierceHealthcare. (He is now senior vice president and chief physician executive officer of Mercy Health Partners and senior vice president of clinical innovation for office of operations and systems effectiveness for Catholic Health Partners.) "The care coordination model was developed out of a principle that required us to--as we took a step back--to look at the entire system. We were going to do away with the fragmentation that is even within a single system."

The hub of it all
Key to the operational changes is what they call the "care coordination hub," a physical location in the hospital to manage patient flow logistics--from admission to discharge--24/7.

Described another way, as Andrabi pointed out, the hub is the air traffic controller and the care coordinator is the pilot. "They are constantly in touch with each other so you know what's happening at every instance," he said.

Each unit has a clinical care coordinator, who acts as local agent in the emergency room or operating room and coordinates with the hub to ensure the most efficient use of capacity at a system level. The unit care coordinators are nurses or registration workers, a contemporary merged version of the traditional charge nurse and case manager role.

Care coordination hub

"Nurses in the current healthcare structure are expected to be the internal primary care coordinator for the patient, and yet, to a large extent, are disempowered. They don't always know how long the patient is authorized to stay and those details that normally reside in case management," said Sawyer at Care Logistics, which worked with Mercy St. Vincent's and Catholic Health Partners. "The care coordinator role is actually the merging of the case manager and charge nurse into one. And when they're asked to do something, they're empowered to make it happen and to execute it within that hub model."

Although some hospitals are experimenting with patient navigators or care coaches who might not have a clinical background, it's critical for the nurse care coordinator to have medical knowledge, thus breaking down the silos of healthcare, Andrabi explained. However, the care coordinator could work with patient navigators if hospitals use them as part of the care team.

Care coordinators work on admissions, bed assignments, unit transfers, and discharges. They also provide a daily touch point with physicians, ensuring availability of necessary lab results and consult reports, as well as working with the doctor to ensure proper documentation. For patients, the care coordinator also sets length-of-stay targets and reviews the daily plan with patients and their families so they are all on the same page with a so-called end in mind.

Patient satisfaction, outcomes results
How did patients react to the model? When asked if patients would recommend Mercy to friends and family, 76 percent reported they would recommend the hospital, while state and national averages are at 69 percent.

Mercy St. Vincent's also increased core measure performance by 37 percent, reduced infection rates by nearly half (49 percent), and reduced preventable harm by 72 percent.

The new model did come with some challenges though, namely underdoing years of siloed work between departments and provider and healthcare worker roles. However, with early buy-in, leaders and front-line workers together created the vision of the initiative from the beginning and with regular dialogue. Initial Gallop Poll results indicate that front-line staff members also are more engaged.

"They feel like they are heard, that they are part of an improvement process" Andrabi said. "Hopefully, we are on the right track in creating a system that not only works for our patients but for our caregivers."

Some medical staff did have a "show-me" attitude, Andrabi said, but that's where performance data comes in. Rather than retrospective reports that are 30 days or older, real-time data showed providers the results of the changes. It was "transformational," according to Sawyer.

Mercy St. Vincent's model can be replicated at other institutions, big and small. The principles are all the same--inside, outside, and in between hospitals, Andrabi explained.

Tips for implementing a care coordination model at your institution
Start early. Mercy St. Vincent's started from scratch, designing and implementing at the same time, and the process took 14 to 18 months. However, starting early, especially for large institutions, allows great impact and benefits. For instance, identify potential care coordinators early on.

Break down the silos. Using Lean Six Sigma principles in silos is an exercise in futility, Sawyer said. Hospitals should commit to functioning like a system. For example, Mercy St. Vincent's CEO rounded on a weekly basis, which is a huge, but worthy, change, he added.

Have a vision. What is ultimately the most important thing that your organization wants to deliver? That varies for different hospitals, but it's important to clearly define that vision. "If you don't know what the end is, you don't know how to get there," Andrabi said.

Commit. "We put the human systems in place before the technology. This is not a technology fix," Andrabi added. Commitment from the entire organization creates a sustainable system over time. "There are no silver bullets. This is hard work," he said.

Editor's note: For more information on the care coordination model, you can download a presentation, "Lowering Costs and Improving Quality through Total Hospital Efficiency," hosted by Fierce Live! Webinars. - Karen (@FierceHealth)

Interview: Children's Hospital LA pledges accountable care for kids

Marla Durben Hirsch - Contributing Editor — Wed, 16 Nov 2011 15:30:00 -0500

Richard Cordova

Most of the development and media attention regarding accountable care organizations (ACOs) has centered on an adult patient population. That's not necessarily surprising considering the Affordable Care Act's push for the creation of ACOs to treat Medicare beneficiaries.

But the ACO concept also can apply to other patient populations, including children, who also would benefit from coordinated care, improved healthcare quality, and lowered costs. That's why Children's Hospital Los Angeles (CHLA) is entering the ACO market, not only as a participating ACO provider but also as the operator of its own pilot ACO with the support of Blue Shield of California. FierceHealthcare recently caught up with CHLA's CEO Richard Cordova (pictured). Read on to hear what he has to say about the unique role of children's hospitals in ACOs, why it has to be "Switzerland," and why some ACOs will win and others will fail.

FierceHealthcare: Most people are focused on how ACOs will help manage the care of the senior population. How do children's hospitals fit into the ACO model?

Richard Cordova: Children's care needs to be managed, as well, especially those with chronic conditions. We have quaternary services at CHLA, but we only get the kids when they're sick. You need to manage the care of children across the continuum of care, from wellness to acute care to post-acute care.

FH: How will children's hospitals be structured in order for them to participate in ACOs?

Cordova: It will vary by market. An ACO is a resurrection of capitation. The provider is more at risk than with fee-for-service. California is a fairly mature market with global capitation and payment reform. We already have medical groups and hospitals that can take full risk. Children's hospitals need some of the infrastructure of an ACO to handle new payment methodologies. There are eight children's hospitals in California; some may create a regional or two-hospital ACO. The children's hospital in San Diego is going solo; I don't know if they'll all be full-fledged ACOs. You have to increase your analytic staff to handle it all.

FH: What are CHLA's plans in partnering with other organizations?

Cordova: We're looking to partner with other ACOs, plans, and systems in different regions. We need to be Switzerland. A lot of networks are asking CHLA to partner with them. As a result of these discussions, we will partner with medical groups, plans, public entities, and clinics.

FH: What is CHLA hoping to achieve by participating in ACOs? What kind of outcomes do you expect?

Cordova: We're hoping to see more alignment between hospitals and physicians. If providers are sharing risk, it transforms the whole system and how patients are treated. For instance, we need protocols when a kid is admitted to reduce the length of stay, and we need physicians to agree to the protocols. We also need shared governance. These [initiatives] need to be physician-driven.

We're hoping to bend the cost curve and get away from fee-for-service, keep people healthy and keep them in their home, do preventive things, and avoid hospitalization of kids.

FH: I understand that CLHA also plans to operate its own pilot ACO program with insurer support. How will the pilot program work?

Cordova: CHLA received a $1 million grant from Blue Shield of California to pilot an ACO for children in its health plan. California has a program called California Children Services. Kids who have certain diseases or illnesses, such as diabetes or cancer, are eligible for this program. With the grant, we're creating a pilot ACO program to treat these kids on a capitated basis. We will go live with the pilot Jan. 1, 2012. We will have 6,000 kids in the pilot. If we're successful, we'll build our capabilities.

FH: What do you see as the biggest challenge for children's hospitals participating in ACOs?

Cordova: The biggest challenge is having the ability to calculate the cost of care to take on risk and negotiate the correct payment for it. A lot of children's hospitals are not experienced in capitation. We'll see a number of failures in the market.

[ACOs] also need the ability to manage the care, to operationalize it, see if the patient is in the right part of the continuum.

FH: What advice do you have for other children's hospitals thinking of building or participating in an ACO?

Cordova: Some people are waiting. But if you wait, you may end up as a bottom feeder. You don't want to be there. Move up the food chain. Also, you need experience. I had experience in prepaid models; I was President of Kaiser Permanente of Southern California. If you don't have experience with prepaid models, get experienced people to run it.

This interview has been edited and condensed for clarity.

Interview: Why finalist Iowa Health System is vying to be a Pioneer ACO

Marla Durben Hirsch - Contributing Editor — Fri, 11 Nov 2011 08:52:55 -0500

Some hospitals and other providers have been taking a "wait-and-see" approach when it comes to accountable care organizations (ACO), perhaps concerned about the capital expense, uncertain return on investment, and compliance issues. Not Des Moines-based Iowa Health System (IHS), which is building an ACO for its regional health system that includes eight hospitals and more than 450 physicians. As a finalist in Medicare's Pioneer ACO program, the system could be one of 30 selected Pioneers, enabling more experienced groups to work together to better coordinate care with a higher level of savings and risk than the Shared Savings program. The Pioneer program model also is designed to provide coordinated care with private payers. IHS is currently negotiating with private payers and expects its ACO to go live with both government and private payer engagement in 2012.

FierceHealthcare caught up with IHS Vice President and Chief Medical Officer Dr. Alan S. Kaplan (pictured), who's in charge of clinical coordination of the ACO. Read on to hear what he has to say about physician employment, CEO buy-in, and why ACOs are difficult work but worth it in the end.

FierceHealthcare: Why did IHS decide to create an ACO when some of the other health systems in the country have held back?

Alan S. Kaplan: We decided a long time ago, regardless of healthcare reform, that the concept was right. Fee-for-service will always have waste in the system. We're moving to a patient-centered, physician-driven concept to create value, lower costs, and improve quality.

FH: What is IHS hoping to achieve with the ACO? What kind of outcomes do you expect?

Kaplan: We want to align our physicians and create and demonstrate value. An ACO is part of value-based purchasing. Moving to an ACO will improve the patient experience, improve quality of care, and hold costs at bay. We also think that in the long term, providers will be happier because they'll be getting paid for providing high-quality care and work with patients to make them healthier. It's a win-win-win for everyone.

FH: IHS is building an ACO with multiple contracts, both private and government. What attributes make your ACO approach unique?

Kaplan: To drive change, you need the physicians on board. This is a pervasive problem because more physicians are independent of their hospitals and in a fee-for-service world. And having employed physicians doesn't necessarily mean that they're a cohesive group. So you need to make all of the physicians a team.

We have both employed physicians and independent physicians. They need to be aligned, work together and be leaders in the ACO to lower costs and improve quality. So we created our own internal "physician academy" to address these issues and make the physicians leaders.

FH: What has been the biggest challenge in creating your ACO?

Kaplan: Our biggest challenge is to change ahead of changes in the payment system. We live in a fee-for-service, volume-based payment system, which is driving behaviors. We're trying to transform the system in an environment that doesn't pay for that. For a doctor to talk with the patient's family, monitor a patient's medications, coordinate care, educate the patient, and navigate the system, all takes more time with no payment for that. We will be working in two systems until the whole healthcare system converts to value-based purchasing. It's a challenge to do the right thing and stay financially solvent until the whole system converts.

We'll start in 2012, but it will take constant years of hard work, and we will improve over the course of many years.

FH: Health information technology is an integral component of coordinating care in an ACO. How is IHS tackling this issue?

Kaplan: We already have an ambulatory electronic medical records system for our physicians. The hospital is converting to a new system. We are also working on our data warehousing to use our systems to enhance care, identify patients at risk, and provide data reporting.

FH: You said that most health systems working on forming ACOs are building them from scratch. What advice do you have for other hospitals and health systems thinking of building an ACO?

Kaplan: You must have a board and chief executive officer steady and unwavering in their belief in it. You need a consistent message and have them ‘walk the talk.' It's very difficult work. Our CEO, Bill Leaver, is totally committed to it. If not, it would be impossible for him to do his job.

This interview has been edited and condensed for clarity.

Exclusive: Why Mayo Clinic set up shop at Mall of America

Dina Overland — Thu, 03 Nov 2011 14:11:34 -0400

Dr. David Hayes

In an effort to reach out and engage patients, Mayo Clinic set up shop in an unlikely spot--the mall. The "Create Your Mayo Clinic Health Experience" in the Mall of America offers shoppers with a personalized experience that's part health and wellness and part retail store. The 2,500-square-foot space has the high-tech, modern feel of an Apple store and offers an interactive library of Mayo Clinic health information.

FierceHealthcare talked with Dr. David Hayes, medical director of the Create Your Mayo Clinic Health Experience at Mall of America, about the Clinic's new, innovative project.

FierceHealthcare: What factors drove Mayo Clinic to open the Health Experience center at the Mall of America?
David Hayes: Mayo Clinic believes healthcare in the future won't be limited to doctors' offices and hospitals. Medicine needs to adapt to peoples' changing needs, including seeing people where they are and when it is convenient for them. Mall of America is the ideal gateway for many of Mall of America's visitors to access Mayo Clinic in non-traditional ways.

FH: What is Mayo Clinic hoping to achieve with the center? Are there any financial incentives for Mayo Clinic?
Hayes: Mayo Clinic is hoping to provide an opportunity for people to define their own wellness goals, access interactive information, and explore resources dedicated to their health. This is a personalized engagement that is part health and wellness experience and part retail store. While we will have limited clinical offerings at this time, the motivation for this space is not financial.

FH: You mentioned the Health Experience center is part retail store. What type of services can patients purchase at the center and at what prices?

Image courtesy of Mayo Clinic

Hayes: Mayo strives to be an affordable healthcare provider. We will be offering limited health and wellness packages available to help guests achieve their wellness goals. These offerings vary based on feedback from our guests and are paired with our themes of eating well, relaxing, movement, sleep, and motivation. Beginning in 2012, we have plans to offer advanced wellness assessments, fitness consults, genetic counseling, family planning counseling, and cardiovascular risk assessments, among others.

FH: How is the center offering personalized health and wellness experiences? What type of employees work at the center?
Hayes: Create Your Mayo Clinic Health Experience is staffed primarily by health experience navigators. The navigators are trained wellness professionals who help guests identify their wellness goals and access the information and resources necessary to achieve them. Whether guests want to ask a quick question or engage in a private consultation, our Mayo Clinic health experience navigators are there to help them customize their experience. For example, individuals may take a self-directed wellness assessment on site, and the health experience navigators are able to walk through the results with the individual and, in the near future, will be able to provide a more in-depth wellness assessment in an adjacent location. They can also answer health-related questions and/or access information for the customer through many Mayo resources.

FH: How has the response been so far to the center?
Hayes: As you can imagine, bringing Mayo Clinic to Mall of America has created a lot of buzz, and we are pleased with the tremendous interest in this health and wellness experience.

FH: What has been the most common patient concern or ailment, and how has the center been able to address the problem?
Hayes: Because this is a personalized [and] private engagement with Mayo Clinic, we are not tracking these kinds of things. But, as you can imagine, this large population of visitors from a cross-section of our community has widely varying questions about their health and wellness.

FH: Does Mayo Clinic plan to open similar Health Experience centers in the future?
Hayes: There are no plans for other projects like this. The Mall of America project will, however, enable Mayo Clinic to learn about adapting its services to other settings. What we learn could have implications in other locations. If we find this is an excellent venue and method by which to connect with more people on issues relating to their health and wellness, we will give further consideration to how and where we would apply this is in the future.

This interview has been edited and condensed for clarity.

The buzz around Lean Six Sigma at hospitals

Dina Overland — Thu, 27 Oct 2011 10:11:41 -0400

You may have heard that Lean Six Sigma is catching on with hospitals and other healthcare providers. This business management strategy specificially addresses process flow and waste issues while focusing on variation and design to promote business and operational excellence. Essentially, Lean Six Sigma helps eliminate defects throughout an organization, which in healthcare can mean preventing medical errors, decreasing mortality rates, reducing lengths of stay, improving patient care, and improving quality.

"Using Six Sigma decreases variation; process outcomes become more predictable and effective. Lean targets the efficiency of processes, decreasing waste and increasing profitability," Marti Beltz, Six Sigma instructor for American Society for Quality and healthcare quality consultant, told FierceHealthcare. "Used together, they produce a synergistic effect not only economically, but also in terms of patient and workforce satisfaction."

Perhaps more importantly, Lean Six Sigma allows hospitals to achieve balance between the seemingly mutually exclusive goals of providing cost-effective, high-quality care. "Other industries struggled with [similar dilemmas] for many years but ultimately discovered that you can indeed have both with the right management and improvement system in place," Charles Hagood, president and founder of Healthcare Performance Partners, told FierceHealthcare.

How does it work in practice? Sometimes, this strategy demonstrates successes in simple ways. "Moving a dressing room out of the imaging room to increase process flow resulted in three times the capacity for mammograms and three times the profits," Beltz said.

And for hospitals interested in concrete return on investment, organizations that have incorporated Lean Six Sigma principles are seeing strong results, Hagood said. For example, a new facility reduced the required square footage by 15 percent while increasing volumes, thereby improving deposit turnaround to 90 percent of all remittances within six hours and increasing the amount of CT scans per day by 22 percent without adding equipment or staff. Plus, some mid-sized hospitals have saved $10 million within two years by using the business management strategy, he added.

So how can other hospitals achieve similar results within their organization? Described as a "full contact sport that you can only learn by getting your hands dirty and 'doing it'," Hagood advised hospital leadership to examine daily management systems and constantly look for waste and variation to eliminate. "Ultimately, the best way to prepare management for executive positions using Lean Six Sigma principles is to create a learn-by-doing environment and to model the approach as the existing leadership leave."

The key to success, according to Beltz, is ensuring that senior management has a solid understanding of Lean Six Sigma's basic concepts, process, and requirements. Only then can the rest of a hospital's workforce deploy these methodologies. "The most successful organizations use a combination of a small group of internal consultative experts and very basic quality training for everyone," she said.

Like any other silver bullet promising a quick and easy fix to a complicated problem, Lean Six Sigma has its own obstacles--namely, physician resistance. "Physicians can be reticent to implement Six Sigma because the methodology has been incorrectly associated with huge resource output, their time specifically," Beltz said.

That's why Hagood warns hospitals about using Lean Six Sigma as a cram down. "If Lean Six Sigma is deployed correctly, [physicians] will see the value and will want to become a part of the equation," he explained. "If the value is seen and the hospital's commitment is evident, in most cases, the physicians will not be resistant over the long term."

Beltz added that hospitals should work to understand the sources of physician resistance, such as valuing intuition over disciplined problem solving to help overcome them. "The most compelling argument to get physicians to try Lean Six Sigma is to help them understand that when stripped down to its roots, Lean Six Sigma is based directly upon the scientific method--a concept well-studied and advocated in medical school," she said.

Although it might not be a cure-all for the industry's woes, hospitals could benefit from such a quality improvement initiative and its effects throughout provider organizations. --Dina

Dina Overland is the editor of FierceHealthPayer, a sister publication of FierceHealthcare.

CMS finally issues ACO final rule: Any takers?

Karen M. Cheung — Thu, 20 Oct 2011 17:07:11 -0400

Although released later than initially expected, the Department of Health & Human Services (HHS) on Thursday finally delivered its final rule for accountable care organizations (ACO) with the goal of saving Medicare $940 million over four years. Now that the near 700-page standards are out--apparently as a more relaxed version--will it win over any providers who initially shunned the proposed rules back in March?

The ACO regulation, under the Accountable Care Act, is a ground-breaking final rule that could change the traditional fee-for-service payment method to pay for performance, in which quality would be rewarded over quantity. With aims to connect hospitals, primary care physicians, specialists, and other providers all together (for those who choose to opt into the voluntary program), the Centers for Medicare & Medicaid Services (CMS) offers a reimbursement reward system for providers (individuals and organizations) that coordinate care for better patient outcomes and cost savings. Essentially, it's an incentive plan for the touted "the right care at the right time" mantra, as noted in the ACO FAQ webpage.

"These new final rules, which were made final after an extensive review of comments and additional stakeholder input on the proposed rule, add a new option for providers looking for support in coordinating patient care," states the Heathcare.gov website. Extensive review? No kidding. After unveiling the first set of proposed rules in the spring, CMS received 1,320 comments, many of which contained criticisms that the initial rules were too burdensome and too prescriptive and dissuaded even the leading hospitals from partaking in what they saw as a risky experiment.

"We listened very carefully... ," CMS Administrator Dr. Don Berwick said, "and this final rule includes a number of improvements suggested by those comments that will strengthen the program."

Brevity is not the government's M.O. Here's the breakdown of some important changes in the final rule (694 pages to be exact) from the proposed rule aimed at attracting more participants and easing the standards.

"In this final rule we have made significant modifications to reduce burden and cost for participating ACOs." They are:

More flexibility in eligibility to participate in Shared Savings Program
Multiple start dates in 2012
A longer agreement period for those starting in 2012
More flexible governance and legal structure of an ACO
Simpler quality performance standards from the proposed 65 to the final 33 quality measures
Adjusted financial risk model
Higher sharing caps
No down-side risk for some participants
Removal of the 25 percent withhold of shared savings
Flexible antitrust review
Flexible repayment of losses
Inclusion of federally qualified health centers and rural health clinics to participate and form independent ACOs

Called a "menu of options for providers looking to better coordinate care," according to the HHS press release, providers also can elect other programs outside of Shared Savings.

HHS Secretary Kathleen Sebelius recognized that even with the changes, the Shared Savings program might not fit all providers.

"This model of delivering care may not be right for everyone, but it provides new incentives for doctors, hospitals, and other health care providers to work together in new ways," said Sebelius in the press release.

The real question is, now that CMS has relaxed the rules, will the big names (Cleveland Clinic, Mayo Clinic, Geisinger Health System, and Intermountain Healthcare) be enticed to choose from HHS' menu? We'll all be listening for their reactions. - Karen (@FierceHealth)

The dirty words: 'Providers,' 'consumers' in evidence-based medicine

Karen M. Cheung — Thu, 13 Oct 2011 16:45:38 -0400

Provider. Consumer. Customer. We use these words every day to describe the healthcare world, but a new article in yesterday's New England Journal of Medicine looks at why these words are not necessarily the type of language to promote.

Describing hospitals as "factories" and patient encounters as "economic transactions," two Beth Israel Deaconess Medical Center physicians write in an article that we are living in an environment of standardized, dare they say, industrialized patient care.

Economists and policy makers propose that "[h]ospitals and clinics should be run like modern factories and archaic terms like doctor, nurse and patient must therefore be replaced with terminology that fits this new order," wrote Dr. Pamela Hartzband, assistant professor of medicine at Harvard Medical School, and Dr. Jerome Groopman, chair of medicine at Harvard Medical School and chief of experimental medicine at the Beth Israel.

The authors argue that the good clinical judgment today is endangered of being replaced by the trendy evidence-based medicine and that healers should have room to offer individual-specific care.

The authors contend that these seemingly benign terms of "providers" and "consumers" are somewhat offensive.

"Recasting their roles as providers who merely implement prefabricated practices diminishes their professionalism," they wrote. "... We believe doctors, nurses and others engaged in care should eschew the use of such terms that demean patients and professionals alike and dangerously neglect the essence of medicine."

An article from California Healthline examines why healthcare professionals and patients are skeptical of evidence-based medicine. In addition to generational differences, healthcare professionals may resist evidence-based medicine, assuming they know best. Like (for a lack of a better term) providers, patients also have doubts that evidence-based care means reduced care. And perhaps most hotly contested, healthcare professionals and patients debate what metrics determine what will be evidence for good care.

No, medicine shouldn't be cookie-cutter, and hospitals shouldn't push out an assembly line of patients to ring up more dollars in the cash register. But with the federal deficit in the trillions and healthcare costs rising, can we afford to experiment with medicine now? It may take the romance of the days of Marcus Welby--or for my generation's analogy, Doogie Howser--but healthcare providers are likely (and encouraged by national initiative programs) to rely on the medicine of years past and what are proven methods for general populations. The reality is hospitals, keeping noble missions in mind, must curb healthcare spending and keep patients healthy at the same time. - Karen (@FierceHealth)

How hospitals prepare for health IT in an ACO world

Dina Overland — Thu, 06 Oct 2011 17:20:53 -0400

A survey by consulting firm Beacon Partners last month found that even though most hospital executives (92 percent) were planning an accountable care organization (ACO), almost half (48 percent) of them didn't know how an ACO would affect their own organization and whether it would improve care.

Amid the uncertainty around ACOs, FierceHealthcare caught up with Jonathan P. Weiner, director of the Johns Hopkins Center for Population Health IT and Johns Hopkins University professor of health policy and management and of health informatics, about IT preparations needed for ACOs. Hear what he has to say about care coordination, risk adjustment, and health information exchanges, and why electronic health records (EHR) are key to it all.

FierceHealthcare: What must healthcare organizations do to prepare for ACOs regarding health IT?

Jonathan Weiner: Accountable care organizations are virtually integrated delivery systems. It will be impossible for them to achieve this integration unless key participants are able to actively share patient information. To that end, the proposed federal ACO regulations strongly encourage the adoption of standardized electronic health records (EHR) and the sharing of these records via community-wide health information exchanges (HIE). These regulations require that at least 50 percent of an ACO's primary care physicians achieve the fed's EHR Meaningful Use criteria by year two of the ACO agreement. So due to both the functional need and regulatory requirement, ACOs will give EHR implementation a big shot in the arm.

FH: Does an ACO need special IT expertise to be successful?

JW: EHR interoperability across the ACO will be key, but the community HIEs will not likely be able to achieve this in the near term. Therefore, the ACO's support infrastructure will need to include a sort of internal HIE for, at least, prime referral partners. Beyond the exchange function, ACOs will need to integrate medical, financial, and administrative data; apply advanced analytics to support the care delivery process; and provide a wide range of business and clinical intelligence needed to effectively coordinate and manage the care of the entire patient "denominator" population.

FH: You work heavily in predictive modeling and risk adjustment as the codeveloper and CEO of the research and development team of the Johns Hopkins ACG Predictive Modeling/Risk Adjustment System. What role does predictive modeling and risk adjustment play in the ACO environment?

JW: ACOs will be responsible for the care of populations and will need tools similar to those used for many years by private and public health plans. Predictive models will be essential as a means of identifying persons at risk for high impact events, such as hospitalization and or doctor shopping. Risk adjustment will be essential for ACOs to ensure that physician pay-for-performance and gains-sharing schemes all fairly consider the case mix of their patients. To be most useful to ACOs, predictive modeling tools will need to be available on close to real-time basis to influence care, which means they ideally should be integrated into EHR systems as automated "population health decision support" systems. The types of risk targets, which currently center on utilization, should be expanded to include a wider range of patient outcomes.

FH: Finally, many healthcare execs are feeling pretty uncertain about health IT even though one of its touted benefits is that it will foster care coordination. What advice do you have to them who may be limited to their existing systems?

JW: It is possible to assess the level of patient care coordination using existing health IT systems, such as claims records. For example, the ACG predictive modeling/clinical analytic system we've developed at Johns Hopkins identifies a series of markers of coordination within physician networks. These include the presence of a majority source of care, the number of separate providers in the mix, and the presence or absence of a PCP (primary care provider). We and others are also working on new approaches to measure achievement of coordination and care handoffs by tracking information flow within EHRs. For example, was appropriate information sent and received via the EHR and did the provider review and act on it on a timely basis? Whatever the source of data, ACOs will need to act on these metrics in real time so that case managers and PCPs can identify and correct instances of poor coordination as they occur.

This interview has been edited and condensed for clarity. Karen M. Cheung contributed to this article.

Why the nurses' strike isn't just a California problem

Karen M. Cheung — Thu, 29 Sep 2011 16:50:26 -0400

The troubles that plague California hospitals may have organizations elsewhere thanking their lucky stars that they aren't facing strikes (or a similar patient death due to a medical error attracting the media storm). But other hospitals would be wise to remember that, like lightning, strikes can strike anywhere.

The California nurses' strike isn't only limited to the West Coast, as it has repercussions for other states. Called the largest nurses' strike in U.S. history and hitting 33 hospitals under Kaiser Permanente, Sutter Health, and Children's Hospital Oakland, the union stand against management signals a broader problem between providers and the larger health systems.

With the media surrounding the California health systems and union, we almost forgot how the strike started in the first place. Among the complaints of the 23,000 striking nurses were cuts to their benefits, as well as cuts to patient services, protestors said.

Those demands spiraled into a California Nurses Association-National Nurses United strike affecting almost the entire area. Further complicating matters, reports linked the strike to a patient death at Oakland's Alta Bates Summit Medical Center when a replacement nurse administered 66-year-old Judith Ming's medication into the wrong catheter, the San Francisco Chronicle reported on Tuesday. The replacement nurse was one of 500 replacements that Sutter Health called in to staff its Oakland hospital and two Berkeley campuses in absence of the striking nurses.

While the California Nurses Association said the patient death could have been avoided if Sutter had not locked out the nurses from reentering, the California Hospital Association said the union was exploiting the tragic death. The Hospital Association also rebuffed accusations that the replacement nurses were unqualified.

As an update to the news that broke this week, the temporary nurse from Advanced Clinical Employment Staffing was credentialed to provide care, according to the Chronicle article. Ming, the patient, suffered ovarian cancer and had been hospitalized since July. While some blame the patient's death on the temp nurses and Sutter, others point to the union as the culprit.

"What I can tell you is this was a very tragic, very unusual mistake," Sutter spokesperson Carolyn Kemp told the Chronicle. "There is a family, a young nurse and a hospital community all devastated by this."

Other news this week also showed us that other areas of the nation are not immune from such conflicts between nurses and hospital management.

For instance, nurses at University of Michigan Health System and leadership have been battling over a new agreement for the past six months, and the nurses aren't buying into the CEO's message that the health system is committed to competitive wages and benefits, reports AnnArbor.com.

Meanwhile, the Oregon Nurses Association and Saint Alphonsus Medical Center-Ontario are stalled on reaching a contract agreement, with negotiations starting back in May, reports The Argus Observer. Nurses said that the hospital must address patient care, safety, and staffing. Saint Alphonsus-Ontario responded, saying that it offers competitive compensation and benefits, according to the article.

For better or for worse, the California strike has the attention of the country and is (or should be) a sounding alarm of other similar problems elsewhere. - Karen (@FierceHealth)

New breed of CIO: Chief Incentive Officer

Karen M. Cheung — Thu, 22 Sep 2011 16:01:58 -0400

A new CIO is in town. Not to be confused with chief information officer, a growing breed of "chief incentive officers" is infusing the healthcare industry with the new-found emphasis on cost savings through better health management. The chief incentive officer examines ways to change behaviors toward a particular goal. Applied to general health and wellness, incentives can work for both patients and caregivers in promoting better care management across all fronts.

"Virtually every organization would need a chief incentive officer," said President and CEO of IncentOne Michael Dermer in an interview with FierceHealthcare.

Sometimes an offshoot from the "chief innovation officer," the chief incentive officer focuses on one aspect of innovations, that is, incentives. As Dermer notes, the chief incentive officer role can incentivize a number of organization-wide initiatives, such as getting physicians to e-prescribe or getting staff to improve procedure times. However, more specifically, these officers can also boost the health of both patients and providers, in keeping diabetics to take their medications or even keeping physicians on a healthy diet.

How do they do it? Through the art and science of incentives.

According to a recent IncentOne white paper (reg. required), organizations can achieve desired outcomes with the following strategies:

Identify what type of behavior you're trying to incent
A study by Thomson Reuters last week found that hospital workers actually have higher healthcare costs than other industries by 10 percent, compared to the general population. Ironic as it is, hospital employees were less healthy and more likely to be diagnosed with chronic medical conditions. Further, the average annual healthcare cost for a hospital employee and his or her dependents was $4,662, outpacing the general population by $538.

Clearly define the goal and why you are trying to reach that goal. In this case, it might be to improve the health of your medical staff in one specialty. Consider starting small rather than launching a wide-scale program, and remember to keep the incentives lively by changing them up once in a while.

Understand what will motivate your employees and what won't
Not everyone will find one incentive as valuable as another person. As a general rule of thumb, immediate gratification works more often than delayed rewards.

The next logical question is how much money does it actually take to make someone abide by the wellness program--to exercise, to watch what they eat, or to engage another health modification. According to another IncentOne white paper (reg. required), to achieve a desired participation rate of 60 percent in wellness programs, it would take an incentive value of at least $356. For each increase of $100, IncentOne researchers found that participation would increase by an additional 7 percent, with a maximum of 100 percent participation for an equivalent $900 incentive value.

Identify your preferred method of incentives
The incentive can take other forms besides pure cash, such as a gift card, food, personal services, or discounts. Often, cash or another financial equivalent may prove the most impactful.

"There are different types of incentives, but we believe the dollar value is key," said Dermer. "For clinicians, the dollar value would have to be meaningful enough for them to act. That incentive for clinicians tends to be pure cash, whereas for a member of a health plan, it might be money off [his or her] insurance premium or money into a health savings account."

Communicate
Of course, employees must understand what they are expected to do in order for them to do it. Clearly communicate the goals and rewards to them. Remember to start early and to keep the rules simple so that the goal is achievable.

Adopt a culture of health at the workplace
For a health and wellness program to work, the entire organization also must adopt the principles behind it and its overall mission. For example, an exercise program wouldn't do as much good if the hospital cafeteria only featured unhealthy options, according to the white paper. Committing to health across all areas helps to incentivize those who work there and maybe even those patients who visit there.

What's the value in offering incentives? According to Dermer, "Incentives are the engine that drive that return on investment."

Organizations already are incentivizing staff--maybe successfully or unsuccessfully--in piecemeal with national initiatives coming down the pike, according to Dermer.

"They're doing this today, but not as a formal role or strategy. They're already spending significant dollars and using pieces of other roles to do this today. The question is whether you think incentives are critical to unlocking the value of your health solution."

Incentives may not be anything new. Parents have been doing it for years, bribing their children to stay quiet for candy or retail managers dangling commission in front of sales agents. However, creating an in-depth incentives strategy may be a more cost-effective way of carrying out health reform. As providers, payers, and patients continue to interact in forthcoming accountable care organizations, incentives may be just the trick to ensuring that patients (and caregivers) stay healthy. - Karen (@FierceHealth)