There is no challenge like the challenge of creating a strategic plan in uncertain times. What do you do when you do not know what to do? That is a question that frequently challenges leaders. Over eight years ago, after Lehman Brothers had failed and the value of the stock market had fallen by almost fifty percent and we did not know if we were facing a deep recession or the second coming of the Great Depression, I was asking myself and the leadership teams of the Atrius Health practices those same questions .
The leadership of Harvard Vanguard Medical Associates had completed a far ranging strategic plan in June, but the world in June was a very different world than the world in October. The plan had suggested that we should focus on improving our processes and workflows by expanding our Lean skills. We planned to improve revenue by gaining more income from Lean improved quality and patient satisfaction scores. We planned to invest in our sites to make them more attractive and to expand the quality of our imaging and lab services. We knew that we were fortunate to have high quality lower cost suppliers of hospital based resources and specialty services in our market. There were tens of millions of dollars to save in risk based contracts, if we could use Lean skills to mobilize our clinicians to change their referral patterns. We hoped that those savings would fund even more infrastructure improvements and innovations. We thought we could “rescue” wasted resources and reallocate those savings to staff education and the development of better programs of care.
We imagined that if through Lean coordinated efforts we could be the practice with the lowest total medical expense and the highest patient satisfaction and measured quality, we would attract patients and grow. What we did not know for sure was whether these assumptions were valid in the climate of financial loss, recession, and increasing unemployment that was suddenly upon us. There were other questions as well. What would happen to our reserves and to the income that we gained from the investment of those reserves? Should we invest in our development or should we hope to preserve as much money as possible in conservative investments?
The senior management team decided to hold a retreat where we could work through several scenarios. I will not bore you with the details of the various scenarios because all of the stories led to the same conclusions. Our work led us to believe that our future would be determined by how well we fulfilled our professional responsibilities to our patients. To serve our patients we realized that we should increase our efforts to:
- Focus on what our patients tell us they need
- Improve our ability to engage patients and families in improving their health
- Improve our measured quality and safety
- Lower our total medical expense by more effective management of our suppliers and internal processes
- Improve the timeliness and efficiency of our care making sure that every encounter occurred at the right place, at the appropriate time, with care from the most appropriate provider
- Practice team based care and continue to develop the Medical Home
- Form closer relationships and more effective partnerships with more select hospitals, post acute providers, and specialists who shared our values and vision
- Enhance and utilize home care services to help patients stay at home
- Reduce admissions and readmissions by anticipating patient needs
- Develop better clinical and management skills with improved critical thinking among our staff through enhanced training programs and a leadership academy
- Improve the workplace environment and the work/life balance of all of our staff
- Articulate our value to public and private payers and work closely with legislators and regulators to improve the regulatory and administrative environment
The good news was that other practices like ThedaCare in Wisconsin, Virginia Mason Medical Center in Seattle, and Denver Health had all plotted similar courses and were succeeding even in an environment of declining relative reimbursement. The common denominator of all of these organizations was that they were using Lean to improve all of their clinical and business processes.
Many were advocating a “wait and see philosophy” while preserving resources by cutting programs and staff. We chose to accept the concept that we could not “cut our way” to success. We needed our staff to be confident that they would be secure and supported so that they could work together to satisfy our patients. We needed to find the time and the resources to invest to create the competencies that would enable us to do more with less and still have a margin for further investment in staff, innovation, and improvement efforts.
We all know that the economy got better. We also got better. I believe that there will never be a moment when we will not be challenged by something. No matter what political party or philosophy is in power, there will never again be a time when we will have more resources, in relative economic terms per capita, for healthcare than we have now. At 17-20% of GDP or whatever the number really is, we have a health system that provides imperfect care to less than 90% of the population. To move forward toward a better America we need to make large investments in infrastructure, research, education, public safety and cultural resources that are compromised when we spend so much on healthcare and get so little real value from the effort.
Despite the high cost of care and the efforts and intent of the ACA, most of our healthcare institutions have spent the last decade trying to figure out how to increase revenue rather than learn how to reduce their cost in the pursuit of the Triple Aim. We see processes developing, like the shift to block grants and tax credits in lieu of direct coverage, that will further reduce resources per capita. The patients most likely to have fewer resources are those with the greatest needs. I fear reductions in our our national investment in healthcare will provide care of a lower quality to fewer people.
What many organizations do not realize or accept, and I fear most politicians do not understand, is that improving healthcare is more of a systems and engineering problem than an issue of finance. This is what Dr. Robert Ebert must have meant when he said more than fifty years ago:
The existing deficiencies in health care cannot be corrected simply by supplying more personnel, more facilities and more money. These problems can only be solved by organizing the personnel, facilities and financing into a conceptual framework and operating system that will provide optimally for the health needs of the population.
It was true when he said it in 1965 as we were rolling out Medicare and Medicaid, and it is true in these times as Paul Ryan, Greg Walden, Tom Price and Seema Verma are trying to figure out how to repeal and replace the ACA and end Medicare and Medicaid as we have known it. The role of healthcare finance should be to create pathways that encourage innovation and improvement in a transforming process of reengineering. Just spending more money has never made things better for more people. We should not be trying to alternatively finance what we we have been doing because it does not work well. We should accept that simply spending more on a system that doesn’t provide value and works the same way it always did, won’t improve the experience of care for those who will always have it. Those who do not have care would benefit from more money for coverage in the same old system, but this administration, the tax conscious voters who elected it, and the current congress are unlikely to be willing to spend more on the underserved. What is needed is what Dr. Ebert evisioned, a more effective system of care that is economically sustainable and available to everyone.
Perhaps what the authors of the ACA failed to clarify was that it was a bill that was meant to expand coverage, but more importantly foster changes in the way care was delivered. ACOs, the creation of CMMI for innovation, required coverage of preventative care, and the guarantee of insurability, all encourage redesign and innovation. President Obama may not have initially understood the extent of the transformation that the ACA demanded. One painful and recurrent criticism of the former president was his failure to deliver on the promise that if “you like your care you can keep it.” I have always thought that his “lie” was probably not an intentional attempt to mislead us; that would have be inconsistent with whom I believed him to be. Rather, it was an error based in the fact that he did not fully realize that the ACA disallowed many policies that people liked because they were ineffective. They were essentially junk. They often did not provide coverage for preventive care, did not provide adequate coverage for women, did not cover preexisting illnesses, and had unrealistically low coverage limits. Some policies went away because employers did not want to continue the plan, or they were withdrawn from the market by insurers. The critics of the ACA were correct when they implied that it was a very complex piece of legislation. It took everyone, including President Obama, a while to fully appreciate what it meant and what it was really about.
Why review the past confusion about the ACA? It would be sad if those inadequate pre ACA policies came back. It would be bad for patients and would further roll back the move toward healthcare transformation that produced care that is consistent with the Triple Aim and is also good for caregivers. Burnout will continue to be a heartbreaking hidden loss that destroys providers and harms patients by turning their doctor or nurse into an automaton with little or no empathy because they have no emotional reserve. Burned out clinicians do not have the energy to manage resources.
We will experience higher expense and increasing burnout until healthcare is reengineered to be efficient and effective. Success in every other industry is driven by continuous improvement and competition. Business competition has always been an American ideal but in complex industries, that competition and the products are regulated. Effective competition and innovation leads to “creative destruction” of poorly performing and inefficient products and services, and the same principles of capitalism will eventually succeed in healthcare when we really establish the finance and regulatory principles that allow the process of transformation to occur.
It is hard to know at this moment whether the long term impact on healthcare of the new administration will be positive or negative. If we devalue and deform Medicaid and Medicare while doing away with all of the structural gains of the ACA, we will move from having the most expensive and least effective healthcare system in the developed world to having a third world system of care with a decline from our current status of having a life expectancy pretty close to Costa Rica and Cuba. If, however, we can use the momentum of “repeal and replace” to advance the ideas for improvement of the ACA expressed by former President Obama in his recent New England Journal of Medicine and JAMA articles and convince just a few moderate Republican senators to align with revisions that will improve the ACA, then the next four years may turn out to be an exercise that was worth the pain.
No matter what happens in Congress the greatest benefit that healthcare professionals can collectively give their patients and themselves is a commitment to the principles of the Triple Aim with real emphasis on lowering the total expense of care. It can be done by reducing waste, improving the processes of chronic care, more effectively engaging patients and families, and embracing more vigorously than ever before our responsibility to always be searching for a better way.