January 24, 2001
CLINICAL AND BUSINESS MODELS FOR QUALITY DRIVEN CARE MANAGEMENT
WHAT'S ALL THE
RECENT COMMOTION ABOUT HEALTH CARE QUALITY?
In the past several years, the issue
of health care quality has received a great amount of press. Most of
the news has focused on negatives -- medical errors and patient
safety issues that jeopardize lives.
Numerous studies have critiqued quality in the US health care
system. For example, a report from the Institute of Medicine (IOM)
-- "To Err is Human:
Building a Safer Health System" -- was released in November
1999. This report suggested that as many as 98,000 people in the US
die each year due to medical errors.
In 2000, the
a consortium of over 60 employers providing health benefits to 20
million+ Americans, disclosed their plan to facilitate purchasing
from health care providers that met specific standards for patient
The Leapfrog Group website summarizes
the rationale for its initiatives:
American health care remains very
far below obtainable levels of basic safety and overall customer
The health industry would improve
much more rapidly if purchasers better recognized and rewarded
superior safety and overall value.
Purchasing strategies need not
only to champion superior overall value, but also to focus on
specific innovations offering "great leaps" in basic patient
Voluntary commitment to purchasing
principles by a critical mass of America's largest employers will
provide a large jump-start for encouraging other purchasers to
Consumer understanding of and
support for safety leaps and other critically needed improvements
in health care value are pivotal to success.
...and we haven't yet heard the
crescendo of the commentary on quality of US health care. The IOM's
report, "Crossing the Quality Chasm: A New Health System for The
21st Century", is scheduled for release in the first quarter of
2001. The report will propose a strategy and action plan for
improving the organization, delivery, and financing of health.
THE NEW MANTRA --
The tide is changing. Over the past
15 years, the mantra in US healthcare has been "reduce cost, reduce
cost, reduce cost." The new mantra is becoming "reduce variation,
reduce variation, reduce variation".
Examples of variation are cited in a
article in USA Today. In Bend, Ore., the rate for back surgeries
is 7.3 for every 1,000 Medicare recipients -- more than four times
higher than in Syracuse, N.Y., which has 1.5 for every 1,000. This
article presents a great everyday explanation (the type mom would
understand) of variation in medical practice. (For a more technical
discussion of variation, researchers from
Dartmouth Medical School have written the book on this subject
-- actually, a whole series of books "The Dartmouth Atlas of Health
Care". For more background see the
While initial quality initiatives
arising from the IOM report and the Leapfrog Group are focused on
medical error and patient safety initiatives, the focus won't end
there. Problems with the quality of care have been characterized
Misuse -- patient safety and
Overuse -- unnecessary tests,
procedures, surgeries, etc.
Underuse -- insufficient use of
appropriate tests, procedures, surgeries, etc.
(For additional background see Dr.
Bodenheim's article in the
Unwanted variation is a commonality
among these quality problems. Misuse suggests negligent variation
from defined procedures. Overuse and underuse suggest variation from
clinical guidelines; in some cases, the science for guidelines is
unresolved, in other cases the challenge is implementation of agreed
So while initial initiatives are
focusing on reducing misuse, the TOOLS, TECHNOLOGICAL
INFRASTRUCTURE, CULTURE, and MINDSET required to do this are easily
extendable toward reducing overuse and underuse. This lays the
foundation for "quality driven care management".
HAVEN'T WE DONE
ALL THIS BEFORE? WHAT'S DIFFERENT THIS TIME?
Skeptics among us will say "We've
done all this before and it didn't work. In 199x my (hospital,
company, health plan, etc.) started a Total Quality program. It
started with a big bang, but eventually faded." In fact, Voluntary
Hospital Association research shows that over 60% of hospital
performance programs have been in place for 6+ years.
What's different about this round of
EVIDENCE of quality problems keeps
Quality improvement is an
ORCHESTRATED EFFORT among virtually all health care monitoring
organizations, larger employers, and government. There is also
significant support among emerging leaders of the physician
The Internet and supporting
TECHNOLOGICAL INFRASTRUCTURE are brand new.
NEW HEALTH CARE CONSUMERS are
demanding accountability and best practices from providers.
Finally, the issue of quality in
health care HAS crossed the threshold of PUBLIC awareness. "Media
attention to the Institute of Medicine story has propelled the
problem of medical errors to the forefront in just a short period of
time. It's an amazing example of agenda setting," said Drew Altman,
Ph.D., president of the Kaiser Family Foundation (KFF). For example,
a recent opinion
poll sponsored by KFF found that wide majorities say information
about medical errors (71%) and malpractice suits (70%) would be the
biggest help to them in determining the quality of providers.
OPPORTUNITY FOR NEXT GENERATION "QUALITY DRIVEN CARE MANAGEMENT"
Better Health Technologies has been
working with several health care clients in exploring opportunistic
"quality driven care management" clinical and business models. Here
are several nuggets from early work.
From the standpoint of designing new
clinical and business models, "reducing variation" becomes the
bull's-eye of the target of opportunity:
Identifying high variation in
medical procedures, processes, and outcomes. Variation appears in
many shapes and sizes, including procedures, diseases and
conditions, geography, by physician specialty, etc.
Understanding the sources of the
Understanding who benefits
economically from the current system and who would benefit from
reducing variation in a particular area (i.e., follow the money).
Designing new clinical approaches
and business models to reduce variation
Finally, here are a few critical
success factors to use in developing emerging "quality driven care
management" business and clinical models.
Partnerships are critical. A new
value chain based on quality driven care management is emerging.
The challenge is too great for any one organization to do alone.
Objective care standards and
evidence based medicine are required. A key factor for success
will be the equivalent of a "Good Housekeeping Seal of Approval"
for clinical guidelines.
Look for local best practices that
can be transplanted and/or commercialized in a regional or
national business model.
Think bricks AND clicks.
Successful business models will provide value propositions that
include both specialization and integration (a carve-in approach,
rather than a carve out). Specialization means world-class
guidelines and best practices provided to patients; integration
means care given by a coordinated team of local health care
Management guru Peter Drucker lists
one of the 5 deadly sins as "feeding problems and starving
opportunities". How will you react to recent quality initiatives
health care? Problem or opportunity?
GROUP PORTRAYS AN OPTIMISTIC VIEW FOR DM
The Boston Consulting Group (BCG) has
published an issue brief entitled "Disease Management Takes Flight."
You can access either
Adobe versions.Some interesting excerpts:
Whether they act internally or
through outsourcing or both, incumbents will need to vastly
improve the effectiveness of their own disease-management
offerings. Those that fail to do so will find themselves at a
competitive disadvantage because the treatment of chronic diseases
such as diabetes, congestive heart failure, and asthma accounts
for the largest portion of health care costs.
A BCG analysis of 22 DMSCs
(disease-management-service-companies) found that around
one-quarter to one-third of them are hitting the trifecta:
reducing medical costs (by 8 percent to 30 percent), improving
patients' health and quality of life, and satisfying more than 90
percent of program enrollees.
The Boston Consulting Group
predicts that such expenditures will total about $500 million --
roughly half the market -- in the United States in 2000. This
figure represents a significant increase from $68 million in 1997.
Based on current health care spending and the potential for cost
savings in major chronic conditions, BCG estimates that the U.S.
market could reach $20 billion by 2010.
Disease management is gaining in
popularity because its promise -- simultaneously lowering costs
and raising the quality of care -- is not only attractive but also
HIGH-PERFORMING HMOs ACHIEVED CLINICAL EXCELLENCE?
The Commonwealth Fund supported a
"Effective Clinical Practices in Managed Care: Findings from Ten
Case Studies" . Plans were invited to participate based on their
high performance on Health Plan Employer Data and Information Set (HEDIS)
The 57 page study identifies factors
that contribute to high clinical performance:
1) A strong working relationship with
the plan's physicians,
2) Quality-focused leadership, culture, and values,
3) A high-quality physician practice base in the delivery system,
4) An emphasis on the use of data and analysis in clinical
Key themes that emerged about the use
of clinical improvement strategies (#4) included:
strategies were developed using highly respected clinicians to
shape and implement initiatives that were both feasible and
Member-focused strategies are
increasing in number and emphasis, particularly among plans whose
provider networks are expanding or are loosely structured and
shared with other plans.
Interviewees at plans with two
types of cross-cutting strategies -- (1) disease or population
registries, and (2) careful processes for aligning benefits,
policies, and incentives with other strategies --strongly believed
these had improved clinical performance.
Commentary: worth reading in detail!
MANAGEMENT JOURNAL SURVEYS EMR VENDORS
The journal "Family Practice
Management" has conducted
of electronic medical record (EMR) systems, including conventional
systems and Internet-based ones. The article ranks and rates vendors
based on general design, provider features, patient features, and
overall scores. Three systems received an overall five-star rating:
ChartWare, EpicCare, and Health Probe.
The article does a superb job of
bringing coherency to a confusing topic area. The authors, Susan
Rehm, MBA and Susan Kraft, MD have developed an extendable
framework, highlighting the most important features of various EMRs
and listing vendor attributes.
NEW YORK TIMES
REPORTS ON "DIGITAL DOCTORING"
New York Times recently reported on technologies affecting the
practice of medicine at the point of care. A few interesting
More than 3 in 10 of the three
billion prescriptions each year have to be rechecked, by some
estimates, because of confusion over a doctor's handwriting or
At least 50 companies, mostly
start-ups, are responding to the trend toward the digital doctor.
Industry data indicates that a
full 20 percent of American physicians already carry hand-held
devices, if only to keep track of schedules and stock holdings.
"All those devices will eventually
be consolidated into a single hand-held device," predicted Dr.
Lloyd A. Hey, a Duke University surgeon and a founder of
MDeverywhere, a start-up that offers software to help doctors keep
track of billable hours.
CORRELATES WITH HIGH QUALITY, BUT THERE'S MORE TO IT
A number of studies have suggested
that higher-volume settings -- that is, hospitals, physicians, and
other types of providers who handle larger numbers of patients --
typically produce better health outcomes.
The Committee on Quality of Health Care in America, in conjunction
with the National Cancer Policy Board, explored this apparent link.
The resulting report,
the Volume-Outcome Relationship in the Context of Health Care
Quality", presents evidence on the relationship between hospital
and physician volume and achieving better quality of care and
patient outcomes in eight clinical areas.Key findings:
A higher-volume, better-outcome
association was observed in three-quarters of the studies
Volume is, however, an imprecise
indicator of quality. Some low-volume providers have excellent
outcomes, and conversely, some high-volume providers have poor
outcomes. Volume per se does not lead to good outcomes in health
care; it is instead a proxy measure for other factors that affect
With few exceptions, however, the
literature does not shed light on the structures or processes of
care that underlie the apparent relationship.
PATIENTS' ASSESSMENTS OF MANAGED CARE
With support from the Commonwealth
Fund, the Picker Institute has released a study,
"Getting Behind the Numbers: Understanding Patients' Assessments of
The authors identified several discretionary plan practices that
enhanced both members' experiences with the plan's benefits and
services and their clinical interactions with caregivers.
Strategies found to support
patient-centered performance included:
Identifying plan members as
primary plan customers
Managing consumers' expectations
Recognizing consumers' perceptions
of plan and provider responsibilities
Incorporating members' perceptions
in quality measures
CSC STUDY --
HEALTH CARE ORGANIZATIONS GETTING READY TO EMBRACE e
Computer Sciences Corporation has
released a survey on global information technology issues and
priorities, it's "13th Annual Critical Issues of Information Systems
Here are some intriguing findings
from health care respondents worldwide:
71 percent of this year's survey
respondents said that developing an e-business strategy is a top
IS management issue.
only 38 percent of respondents
have an e-business strategy in place now, a figure that is
unchanged from 1999.
nearly two thirds of healthcare
respondents stated that they are not involved with e-business
currently, but are considering it. This figure is 63 percent
higher than the survey average. It tells us that healthcare
executives recognize the need to embrace e-technologies but, for
the most part, have yet to do so.
Disclosure -- No BHT clients were
mentioned this issue.
E-CareManagement News is an
e-newsletter that tracks a major change in health care and managed
care—the paradigm shift from “managing cost” to “managing care”.
This e-newsletter is brought to you by Better Health Technologies,
LLC (http://www.bhtinfo.com). BHT provides consulting and
business development services relating to disease management, demand
management, and patient health information technologies.
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Copyright © 2001, Better Health Technologies, LLC. All rights