8 Truths On Health Reform

Obscured in the confusion over the dysfunctional Healthcare.gov website and the efforts in Congress to defund the Patient Protection Affordable Care Act, I believe it is important to understand these eight hard truths surrounding healthcare reform.

Written by Chuck Lauer, Former Publisher of Modern Healthcare and Author, Public Speaker and Career Coach  | October 29, 2013

1. For clarity’s sake let’s remember what the PPACA replaces: A system that left nearly 50 million people without health insurance. Spending completely out of control, threatening our treasury, our economic competitiveness and the long-term future of Medicare. A stunning lack of care coordination. Medical errors killing perhaps 400,000 people each year. A dearth of quality and outcomes measures. Little innovation in care delivery models.   

2. Eventually the snafus over the exchanges will be sorted out, and more than 20 million people who were formerly without healthcare insurance will be insured. That’s good, and needed. But it seems clear that many of the plans will be fairly restrictive, and people won’t have as much choice of provider. Out-of-pocket spending will surely increase. At the same time, funding for disproportionate care is being slashed. Safety-net hospitals fear the outcome. This is the $64 billion question: Will the newly insured make up enough of the losses from reimbursement cuts to allow hospitals on tight margins to survive?  

3. Reform of the care delivery system must accelerate, either through regulation (likely) or legislation (in this climate, highly unlikely). We have to continue to bring down costs. It is great that health spending increases have slowed, but spending was already way beyond what we as a society can afford. Accountable care organizations, medical homes, bundled payments and other forms of coordinated care must become the norm, not the exception. This is the time to move quickly to get beyond pilot projects.  

4. Easily avoidable problems such as medical errors can no longer be tolerated. One case in point: A recent Sentinel Event Alert from The Joint Commission called attention to the most commonly reported error — foreign objects left inside patients after surgery — and the urgent need for new strategies to ameliorate this preventable harm to patients. The commission reported on 772 cases of sponges, towels, medical instruments and other objects mistakenly left inside patients after surgery since 2005, including 16 incidents that caused patient deaths. Sentinel events are voluntarily reported, and officials said the actual number of incidents is likely many times higher. About 95 percent of the reported incidents resulted in extended hospital stays or additional care. Sponges are of particular concern, amounting to two-thirds of all retained items and causing devastating injuries and expensive litigation. One solution, technology that uses simple barcoded scanners to help ensure correct sponge counts, costs a measly 10 bucks per procedure and eliminates sponges being left inside people. Despite this technology being well known and established, only a tiny minority of hospitals have adopted it.  

5. Senior leaders of health systems have got to become more strategic. I was in Washington, D.C., a few days ago and was blown away after having lunch with some healthcare insiders. The CEO of a prestigious hospital on the East Coast admitted he was at loose ends when it came to health reform. “There are all sorts of decisions that are not yet made by the bureaucrats that are going to affect reimbursement, so it’s hard for us to plan. I am as puzzled as any time in my career as to what course to take,” he said. We are more than three years into reform, and I am amazed at this level of confusion. Yes, it is difficult to know how all of the changes under way will pan out, but executives are paid handsomely to lead, and they need to pick some strategies and go with them. Sitting on the sidelines and waiting to see how it all shakes out is a recipe for an organization not surviving reform.

6. The days of the stand-alone hospital are numbered. Everything I am seeing in healthcare today is about population health, managing chronic conditions and knitting together the care continuum. A hospital not part of a larger system needs to be the hub of an integrated delivery network, with a physician network, clinics, home care, etc. I have seen some organizational charts of forward-thinking organizations where the acute-care hospital is the last resort for patients. Those holding onto the notion of building ever-bigger fortresses are deluding themselves and harming their organizations.  

7. There are many good things happening. I am seeing tremendous innovations in readmissions reduction, infection control, Lean processes and clinical decision support/evidence-based medicine. The problem is that these remain exceptions, not the rule.

8. The patient experience of care is something to ignore at your peril. It is a huge differentiator in a time of increasing competition for the healthcare dollar, many of those dollars coming right out of patients’ pockets. Don’t just focus on HCAHPS and Press Ganey scores and keeping money under one part of the value-based purchasing program. Find ways to connect immediately with patients. Treat them like valued customers. Help them navigate the healthcare maze. Use emails, texting and follow-up calls. Have leaders round on them. Give them all valet parking. Do anything to build loyalty. You’re going to need it.