February 18, 2022
Dear Interested Readers,
Musings on an Anniversary
I published my first “Friday letter” on February 22, 2008. It was the last day of my first week on the job as the Interim CEO of Harvard Vanguard Medical Associates and Atrius Health. I wrote the letter to let all of our employees know what I had learned walking around the practice during that first week and to thank them for the warm reception they had given to me. At the time I had no idea how long I would be in the job or whether I could do it, but by June I had lost the “interim” from my title.
I’ve written about seven hundred and twenty-five of these Friday notes since that first letter. For about six years between 2015 and 2021, I also wrote every Tuesday. So, I think there must be over a thousand of these offerings. I did miss the first three Fridays in November 2013 just after I had announced that I would retire.
On that first Friday in February of 2008, George Bush was still president, and the Patriots had just lost the Super Bowl to the New York Giants. By then Brady had won three rings, but he would not win another ring before I retired on December 31, 2013. More importantly, Barack Obama was in the middle of his struggle with Hillary Clinton for the Democratic nomination for president. When that first letter came out no one could imagine that the Great Recession which was just beginning would become an obvious problem for everyone later that year on September 15 when Lehman Brothers collapsed and the stock market went into free fall. The economic uncertainties that lay ahead would blunt the possibilities for “Hope and Change” which the future president was so masterfully presenting in his campaign. Who knew that the recession would also make my hope of leading a transformational change within our practice much harder?
I never coopted Obama’s “Hope and Change” motto for my own overt use, but the concept inspired me and fit the challenge and the opportunities that I saw ahead for our organization. It was a transitional time in healthcare. We were just discovering the possibilities of “Romneycare” which was in its early stages after being passed in 2006. That year, 2008, the Massachusetts legislature did a follow-up to Romneycare with Chapter 305 which established a Health Policy Commission with an advisory group on which I was asked to serve. The law supported the universal use of electronic medical records and fostered the movement away from fee-for-service payment toward universal capitation. It seemed that every year for the next several years the state government was passing a new law that would promote the transformation of healthcare. That was totally appropriate since Massachusetts had the highest per capita healthcare cost of any state in the union and America had the highest cost of any country on the planet. That made us the most expensive place to get healthcare in the universe.
I wrote in one of my letters that the consumers of healthcare in Massachusetts were tired of living in the state that had the highest cost for healthcare, and they were using the legislature as a megaphone to get the attention of the medical community. In 2010, the passage of the ACA was the icing on the cake. The ACA gave me hope that a new day was coming. I was very hopeful that in a world of increasing value-based reimbursement we would be a great example of its ultimate benefit in the quest for the Triple Aim which had just been described by Don Berwick, et al. The abstract of that paper is a description of what I hoped that we could do:
Improving the U.S. health care system requires simultaneous pursuit of three aims: improving the experience of care, improving the health of populations, and reducing per capita costs of health care. Preconditions for this include the enrollment of an identified population, a commitment to universality for its members, and the existence of an organization (an “integrator”) that accepts responsibility for all three aims for that population. The integrator’s role includes at least five components: partnership with individuals and families, redesign of primary care, population health management, financial management, and macro system integration.
I felt that we met the three “preconditions” that are described above. We had an identified population. We were committed to universality for all of our patients. We were the epitome of an “integrator.” We were committed to partnership with individuals and families, redesign of primary care, population health management, financial management, and macro system integration.
By June, my team had written a strategic plan that would enable us to grow and improve even as revenue might fall. The strategic plan was totally consistent with the pursuit of value-based reimbursement with the goal of cost reductions while increasing the quality of care. The plan was constructed on the idea that there were tens of millions of dollars of waste in our annual budget of about $1.5 billion that could be extracted through redesign of primary care, population health management, financial management, and macro system integration.
The core concept that I tried to transfer to our practice through the Friday letter to all of our employees was the idea that we would “rescue waste” and “reallocate the rescued resources toward innovation.” Everyone’s work needed to be aligned with the objectives of the Triple Aim and we needed everyone to be an active partner of a team in the pursuit of our objective. On a weekly basis, the message was repeated with just enough variation to make it seem fresh. There was work for everyone, and the letter celebrated the accomplishments of teams and the individual heroes who were committed to our collective objective. We made a lot of progress toward that goal by implementing Lean management which fostered a spirit of working together in a process of continuous improvement.
Every day was an adventure and I chronicled our progress and tried to develop even more momentum with the Friday letter. Before long I realized that the letter was circulating outside of our organization, so I changed the salutation to include not only our employees but also other “interested readers.” When I retired the direction of the letter changed. I was no longer focused on what was happening within Atrius Health, that was the responsibility of those who followed me and it would have been inappropriate for me to continue to write to the practice. In the years since I have retired, I have tried to speak to anyone who is interested in the issues that are important across all of healthcare. Writing as a private individual has allowed me to address the social and political issues that would have been inappropriate for me to address as the leader of a non-profit healthcare organization with many publicly financed patients.
When I joined the practice of Harvard Community Health Plan in 1975 we were totally capitated in the most positive way. We were a prepaid medical practice with measured quality that was always excellent and in many categories, the best in our market. We were instrumental in establishing much of the national quality measurement process. Between the late seventies and 1990, Don Berwick was our Vice President for Clinical Quality.
Not every capitated healthcare provider had our focus on patient satisfaction, quality, and cost containment. By the mid-nineties, the methods of practice in many HMOs and IPAs were causing many patients in many locations around the country to wonder if they were being denied necessary care. Things had deteriorated as many employers sought single-source contracts for their employees and wanted to offer a choice of finance options. By 1997 Helen Hunt would win an Oscar in the movie “As Good As It Gets” in part by having a tirade about how bad her HMO was.
Let me orient you if you don’t know the movie and you click on the link to see the short clip. Hunt plays a single mother who works as a waitress and has a young son who has asthma. One of her “regulars” at the greasy spoon where she works is a wealthy eccentric who is socially inept and is played by Jack Nicholson. Nicholson’s character would like to have some greater relationship with Hunt. When he learns of her dissatisfaction with the way her HMO ignores the needs of her son he sends his friendly PCP who makes house calls to see her. The gentle and understanding doctor is played by the great Harold Ramus, Egon from “Ghostbusters” and the director of “Groundhog Day” with Bill Murray. They sit down at Hunt’s kitchen table where Hunt describes her HMO’s methodology with some pretty salty language. When I saw the movie, her tirade about the HMO care her asthmatic son was getting resulted in cheers throughout the theater, and I knew that our world had changed.
By the time I became CEO ten years later less than forty percent of our practice was financed through capitation or some form of value-based reimbursement. Much of the management machinery necessary to control healthcare costs while improving quality had been sacrificed to the near-death experience we had when Harvard Pilgrim Health Care went into receivership early in January 2000. I was the chairman of the Harvard Vanguard Board when Harvard Pilgrim went into receivership, and I was shocked when I was told by our outside auditors that we were “not a going concern.” We had less than a week’s cash on hand. We had hit bottom. The choice was to fold or make painful choices that might give us a chance to survive.
We hired a bold young CEO, Ken Paulus, and made drastic cuts after losing about 150,000 of our 400,000 patients. We metaphorically burned the furniture to get through the winter. Our only choice for survival was to surrender to fee-for-service medicine and learn how to make a profit. Prior to the collapse, I had joked that for the few FFS patients we had we were basically “free for service.” It was a difficult transition for the organization and emotionally difficult for me. I felt like I was being forced to abandon my religion. The change was immediately obvious to me in our cardiology practice. We got referrals for questions that we had once managed in the capitated model with a phone call or a hallway conversation. We were generating billable encounters that did not improve outcomes, subjected patients to marginally indicated tests, and overall did not produce better care. In our struggle to survive we were becoming just like the rest of healthcare.
The values that had sustained me for a quarter of a century were being challenged in very uncomfortable ways. By 2005 we were quite “profitable” and still had excellent quality metrics. By the time we recovered, we had experienced substantial turnover in our professional staff. Many of our new colleagues had never known anything but fee-for-service practice.
I personally found fee-for-service practice to be a soul-sucking experience. I had never before needed to care whether my time with the patient was worth an L3, L4, or L5 price tag. Outcomes and patient satisfaction seemed secondary to “productivity.” It did not take long to realize why the cost of care was so high. I thought that Don Berwick’s estimate that 35% of healthcare costs represented waste that was defined as overuse, underuse, and misuse of care was a gross underestimate of the true waste created by FFS practice. Part of my willingness to give up much of my practice time and accept the direct management responsibilities of being CEO was my desire to see if I could help reverse the slide away from value-based compensation and begin to move us back toward capitation and population management as the primary source of our compensation.
We were the first Massachusetts practice to accept the Alternative Quality Contract and volunteered to become one of the first Pioneer ACOs and by the end of 2013 more than seventy percent of our patients were in value-based finance mechanisms that were a move back toward the much-maligned HMOs of the 80s and 90s with the focus on patient satisfaction and improved cost and quality reinforced by bonuses and penalties that were dependent on measured quality, patient satisfaction, and practice efficiency. We were top-tier performers in both of those innovative healthcare finance mechanisms built on the principles of capitation that were so familiar to me. Our newly acquired Lean skills and the enthusiasm that many of our employees had for continuous improvement added up to organizational success and what looked like a resurgence of value-based reimbursement.
To achieve success we brought much of our testing into our own labs. We aggressively managed outside utilization by forming partnerships with like-minded organizations. We realized that there could be substantial cost differences between hospitals with equally impressive reputations and no measurable differences in quality or outcomes. Based on those observations we moved the care of our hospitalized patients to the more efficient hospitals and saved tens of millions of dollars. We also refocused routine hospital care from tertiary facilities to community hospitals that responded by becoming valued partners in our quest to improve the cost of care while improving the care experience and quality. I soon learned that if you controlled enough admissions to any given hospital to cover their margin, they would be interested in looking at the care process from your perspective. Despite all of our demonstrated success there was continuing pushback from the dominant fee-for-service providers. In time, it became obvious to me that the transformation toward the Triple Aim would require skills beyond what I could provide and more time than I had imagined or had to invest.
I have long believed that a system that is going to be successful needs to be able to survive a leadership transition. No one individual is indispensable if the system is well constructed and focused on commonly held objectives and values. Nothing lasts forever, and I was increasingly aware of the fact that there were those, especially specialists and some of those in our suburban practices, who were enjoying large fee-for-service incomes and were not as enthusiastic as I was about moving away from fee-for-service payment and toward a path to lower healthcare costs. The last thing our practice needed was a divisive split within its professional staff. My seventieth birthday was coming up fast. My work was done. It was time to retire. I could only hope that some of what we had accomplished would stick. My last letter to the practice was on October 25, 2013. I used the same story in that letter that Martin Luther King, Jr had used in his last speech in Memphis when he sensed that the end of his time was near. At the end of Deuteronomy, Moses goes up on top of Mount Pisgah to look over the promised land that he will never visit or live in.
The good news is that something is working in Massachusetts. Massachusetts has dropped from being the state with the highest per capita expenditures to being below the national average and slotting in at thirteenth. Value-based compensation has not displaced fee-for-service payment throughout the state, but I would like to believe that it has growing acceptance. I think that the Health Policy Commission has made a big difference by making continuing consolidation more difficult and not approving mergers that reduce competition and will increase the cost of care. I am sure that some of the success is the work of the creative insurers in Massachusetts. Finally, I know that the fact that Massachusetts has the lowest uninsured population in the country makes a difference. Almost 98% of Massachusetts citizens have access to healthcare, and that must make a difference in both outcomes and cost.
It is hard for me to believe that I am into my ninth year of retirement. Time does fly. I continue to enjoy following the progress in healthcare toward the principles of the Triple Aim, and writing about what I see. I confess to getting impatient. I also admit that none of us have fully processed the impact that COVID has had on the future of our imperfect and incredibly variable system of care.
The lead article in the New England Journal of Medicine for February 17, 2022, is entitled “Health Care Safety during the Pandemic and Beyond — Building a System That Ensures Resilience.” The authors, Lee A. Fleisher, M.D., Michelle Schreiber, M.D., Denise Cardo, M.D., and Arjun Srinivasan, M.D., note there has been “observed substantial deterioration on multiple patient safety metrics since the beginning of the pandemic, despite decades of attention to complications of care.” They write:
The fact that the pandemic degraded patient safety so quickly and severely suggests that our healthcare system lacks a sufficiently resilient safety culture and infrastructure.
Their conclusion:
The healthcare sector owes it to both patients and its own workforce to respond now to the pandemic-induced falloff in safety by redesigning our current processes and developing new approaches that will permit the delivery of safe and equitable care across the health care continuum during both normal and extraordinary times. We cannot afford to wait until the pandemic ends.
There is work to be done. Problems that need to be solved will continue to emerge. I am certain that the caring professionals who populate our system of care will continue to do their best. I also believe that the system which performs imperfectly now will continue to improve even if it has to struggle against the reality of a very polarized political background.
I am reminded that although Moses saw a land of “milk and honey” when he looked over Jordan from the top of Mount Pisgah, he could not see the future and the ups and downs that would face his people as they went forward in time. I am sure that we all have much to learn, and much to overcome as we go forward into the future seeking the “promised land” that the Triple Aim so succinctly pictures. The sum of the learnings of the quality movement and the observations in Crossing the Quality Chasm offers us wisdom to be applied to emerging problems as we move forward in time on that collective journey.
I still believe that fee-for-service payment is not the optimal form of healthcare finance to fuel our pursuit of quality objectives in a challenging future, but it does seem to be a comfortable home for the system to regress to when it is challenged. Over the next several years I imagine that I will continue to enjoy offering my musings for what they are worth for many Fridays to come. Someday I hope to write that value-based compensation has become the primary form of healthcare finance. I look forward to the twentieth, twenty-fifth, and thirtieth anniversaries of this Friday letter.
Big Fluctuations In The Weather Under The “Snow Moon”
The perfect weather for a big harvest of maple syrup is cold nights followed by warm days. I have a friend in town who is a maple syrup enthusiast. He has his own “sugar shack” and this time of year he sends out an invitation to about a hundred friends to say that he is holding court in his sugar shack while he is “boiling.” People drop by to chat, play a little music, enjoy some libations, and watch the process of making that sweet syrup. Last week was perfect for him because as the Super Bowl approached the daytime temps rose into the high forties while we still dipped into the teens at night.
All that changed on Sunday. About the time the Bengals bit the dust to my disappointment–I never root for a team from LA in any sport– the temp dropped into the minus numbers and stayed there through Tuesday. On Wednesday we started in single digits and got up to the mid-thirties and the swing predicted for today is from fifty-two. degrees at 7 AM down to the single digits by tomorrow morning, but next week the forecast is back to cold nights and days in the forties. I am sure my friend is delighted. I hate the ups and downs,
One of my consistent tasks is keeping the home fires burning. So far this winter I have burned over two cords of wood. Whether the temp is zero or forty I trudge once a day to the word shed and fill my cart with logs that I then pull up on the deck where doors open onto my living room next to the fireplace. Monday evening, just before sunset, when the temp was below ten with a wind chill factor that was even lower, I was out of wood and needed to make a trip to the woodshed. As I was pulling my cart back to the door on the deck, I looked up and saw the moon. It looked full to me. The picture of the moon and the purple hues of the evening sky pleased me even though I was very cold. You probably won’t notice that I was standing in exactly the same spot where the header for last week was taken on a very bright cloudless day that was also freezing cold. When I used Google to check out if the moon was full I discovered that I was about thirty-six hours early, but it still looked full to me. A full moon in February is appropriately called a “snow” moon.
The full moon in March is called a “worm” moon. What’s with that? If the temp keeps rising perhaps March’s full moon should be called a “warm” moon. I hate to admit it, but I don’t like the ups and downs of the temp even if it does make my maple sugar friend happy. I need a couple of more good snowstorms to make it feel like we have had a real winter. I hope that wherever you are you are getting the winter that you want.
Be well,
Gene
