HSSP 106A: Managing Medicine Fall 2014 Tue/Thu 3:30-4:50 PM

HSSP 106A: Managing Medicine Fall 2014 Tue/Thu 3:30-4:50 PM
Professor: Darren Zinner, Ph.D. Heller School for Social Policy and Management Associate Chair, Health: Science, Society, and Policy Program Brandeis University

Doctors and Networks UPDATE
Infant Mortality = 4.7 / 1000 live births, 2,841 families served in 2012 Outcome: Children and Mothers are Safe and Healthy 83% of children are up to date on immunizations 96% of children have a medical home 70% of mothers breastfeed 21% of pregnant mothers quit or drastically reduced smoking 51% of mothers with depression have experienced an improvement in their outlook Outcome: Healthy Birth and Mortality 99% of mothers enrolled prenatally in ECS reported receiving at least 4 prenatal doctor visits 63% of mothers complete their postpartum visits Outcome: Children are Developing Normally in the Following Areas: Gross motor skills (98%) Fine motor skills (98%) Communication skills (97%) Social/emotional development (97%) Problem Solving (97%) Outcome: Children are Thriving in a Stimulating Environment 99% of parents are responsive to their child's learning and emotional needs 93% of parents facilitate and support active learning in their children 98% of homes are structured to stimulate learning 98% of homes contain sufficient learning materials, such as books 97% of parents are actively involved in their child's learning Model for other programs in Connecticut, Boston, Arkansas, Ohio UPDATE Source:

Prelude to Themes Discussed in the Course
: The role of the organization in health care Quality embodied in a person vs. Quality of a system Responsibilities and roles within the health care system, including patients, doctors, hospitals, clinics, insurers, employers, pharmaceutical/medical device firms, charitable foundations, and others Designing and implementing new health care policy and services Targeting the right group of patients/customers Changing incentives to change behaviors (patients, providers, organizations) The role of data and evidence and health information technology Growing the business Health care financing Balancing “public health” with “private returns” (aka, No Margin, No Mission) Evaluating the conflict of incentives between individual organizations and the health care system Balancing issues of equity, equality, and need

About the Teaching Team
Contact Information: Darren Zinner, Ph.D. Candi Ramos Rose Solomon 208 Schneider Building Course Assistant Peer Assistant Office Hours: Prof Zinner: Tues 1:00 to 3:00 or by appointment Ms. Ramos: By appointment (especially near deadlines) Background: Education Research Work History Family

About the Course The course is designed to meet the following objectives: Analyze the clinical and business processes involved in health care delivery within the context of real-world case scenarios; Understand the complex interactions between science, medicine, economics, health care delivery and the practice of management; Recognize the requirements of health care administrators, including their legal, ethical, fiscal, and managerial responsibilities to their internal organizations, external stakeholders, and the general public; Discuss the implications for the design and adoption of new technologies and delivery models into health care delivery systems; and, Develop an understanding of how public policy decisions influence the choices of individual healthcare organizations, which in turn create societal problems requiring public policy actions. Some prior knowledge of the health care industry is expected. Prerequisite: HS 104b or LGLS114a or permission of instructor.

About the Syllabus UPDATE Through case studies of real hospitals, insurers, and firms, the class will examine choices of clinicians and managers aimed at improving quality, containing costs, driving technology adoption, or promoting new ventures. The course is organized around the following themes: Introduction (today + 4 Cases) Managing the choices of clinicians (3 Cases) Managing the choices of patients (5 Cases) Managing healthcare organizations (8 Cases) Ethical and policy implications of health care organization management (1 session) Student presentations (3 sessions)

About Class Attendance and Preparation
Attendance is required Classes will start (and end) on time You are required to inform me before class in the event of an irresolvable conflict Any absence (excused or unexcused) requires a case write-up for that day unless cleared with me ahead of time Class discussion is the primary source of instruction and learning for this course Large portion of grade based on participation/preparation Class assignments and papers further develop themes from class discussion No midterm tests; no final exam Workload is constant, but not overwhelming if you manage your time well Coursepack will be available from the instructor ~20 Cases, available after drop/add period Readings are assigned in LATTE (I reserve the right to add a reading or two) No textbook

About Class Discussions
The case study method Each case presents a conflict endemic in health care; classes will help define and debate the possible resolutions and bases for future strategies Cases contain very few “correct” answers The actions within the case are examples of both good and bad organizations, often both. It is important to try and analyze what the protagonist did correct and incorrect. Cases are self-contained; it is irrelevant to research the company to “see what happened”. When possible, instructor will provide an update at the end of each class Prepare one case per class Read the case thoroughly, typically about 20 pages in length, with 4 to 10 Exhibits Sometimes additional required readings (LATTE) Prepare to answer the discussion questions (LATTE) Allocate minutes for reading and 1-2 hours for analysis Helpful to work in groups before class Discussion norms Instructor will lead through questions, following a loosely-structured teaching plan Students volunteer answers by raising hands, with two exceptions: “Right of Reply” – informed discussion, debate, and disagreement is encouraged “Point of Order” – to ask a clarifying question about a medical term or management jargon, please raise the name card Devote the last minutes on major lessons of each case in a wrap-up “lecture-ette”

Grading – Course Participation
20% Participation and Preparation Assignment questions are offered for each class to guide the student in his or her critical evaluation of the case study. While these questions are generally not graded, they will greatly enhance the student’s ability to contribute in class discussion. Class participation is required almost every day Emphasis on quality versus quantity Small contribution: more factual; “Kick-off” questions; class votes Medium contribution: explanations (e.g., rational of why you voted that way); role plays; intelligent questions Large contribution: analysis and summary; comparisons across cases and (HSSP) courses; substantiating argument with mathematical analyses Online forums in LATTE count toward participation with similar categorizations Additional weight for initiating a forum by summarizing a relevant journal article, newspaper piece, or on-campus seminar and sparking dialogue I reserve the right to “cold call” class members who are not participating Failure to prepare or attend class discussions will result in poor grade

Grading – Papers 30% (3 x 10%) Case-based Exercises
Short assignments to coincide with themes from cases Payment Policies and Behavior Analyzing Incentives with Current Health Reform Initiatives Disease Management Cost Analysis 30% (2 x 15%) Midterm Papers Medium-length papers (maximum 8 pages) expanding on the themes brought up in class Most source material will be provided; some additional research required.

Grading – Papers 20% Student-initiated Semester Paper/Presentation
Analyze the conflict of incentives in the health care marketplace, discussing the rationale for an organization’s managerial choices as well as the social impact of those decisions. Teams of 2 are allowed Abstract: Each student individually turns in background & research questions (~1 page) Paper Maximum 12 pages, well researched and appropriately cited Last section should be your analysis and recommendations Due on last day of classes (12/19), but highly recommended to finish two weeks post-presentation Presentation Requirements 15 minute presentation mid-semester; 3-5 minutes of questions Assign a short background article to the class Loosely-graded, mostly to serve as first-draft of ideas, organization, analysis [Remainder of class is graded for class participation] Presentation Locale In class or a “Sing for your Supper” option

Grading – The Fine Print
Papers will be graded on the overall power of the analysis. Grading criteria include: the clarity of problem statement, ability to logistically articulate the pros and cons of the argument, quality of evidence, appropriateness of conclusion, and the clarity of writing. Specifications: double-spaced, one-inch margins, 12 point Arial or Times New Roman font. Roughly last quarter of the space should be reserved for your analysis and recommendations. Papers must include two footnotes references themes or discussions we had in class. Late papers are docked one-half letter grade per half day (i.e. 5% every 12 hours). Plagiarism will result in a zero for the assignment.

Questions? Comments? Student Introductions Syllabus Review

Dana Farber Cancer Institute
“Primum Non Nocere” (First, do no harm) - Hippocrates

Review of Terminology JCAHO (Joint Commission for the Accreditation of Healthcare Organizations) Clinical Research Phase I, Phase II, Phase III Trials Research Protocol Institutional Review Board Adverse Event vs. Error Medicare, Medicaid DRGs

Where Do Errors Originate? 1. Human Factors
Heuristics (aka “rules of thumb”)* Availability Heuristic: Judging things to occur more frequently because they come to mind more readily; Representative Heuristic: New situations are similar to previous situations and can be treated in the same manner; “like causes like” Recency Heuristic: Information or experiences that were made apparent more recently are given greater weight * Tversky A, Kahneman D. Judgment under uncertainty: heuristics and biases. Science 1974; 185: Error Type Example Underlying “Cause” Slip, Unintentional (automatic mode) Mislabeling a daily dose of chemo as a full treatment dose Inattention; fatigue/stress Mistake (rule-based) Misdiagnosing an ulcer as an ordinary upset stomach Inappropriate rules Misapplying rules (knowledge-based) Reports of the “Gay Cancer” in NYC in early 1980s Inadequate knowledge, Ambiguity, Complexity

Where Do Errors Originate? 2. Process Complexity
System Percent of ADEs General drug knowledge/dissemination 29 Dose and identity checking (correct drug in correct dose in correct patient) 12 Patient information availability 11 Drug order transcription 9 Reactions to known allergies 7 Medication order tracking 5 Interservice communications (between nurses, pharmacist, MD) Device use (e.g., drug infusion pumps) 4 Standardization of doses/frequencies Other 14 Process Complexity The probability of making an error is affected by: Number of steps Interruptions Number of “handoffs” Loosely Coupled Systems (vs. Tightly Coupled Systems) Ambiguity Standardization Redundancy Cross-Training “Forcing Functions” Bates DW, Cullen DJ, Laird N, et al. “Incidence of adverse drug events and potential adverse drug events: Implications for prevention.” JAMA 1995; 274:

Where Do Errors Originate? 3. Organizational factors
Culture, Lack of open discussion regarding errors and “near misses” Malpractice lawsuits “Culture of Silence” Failure to systematically collect data on potential adverse events Leadership Do leaders value safety and quality as an organizational mission? Are error reports treated as “opportunities for learning” or reasons to fire staff? Nature of work Difficulty of distinguishing between adverse events and errors Many alarms, very sick patients Low “Signal to Noise” ratio Experimental, extraordinary treatment plans

Patient Safety at Dana Farber, circa 1995
Who (or What) killed Betsy Lehman? Incorrect drug dose Failure to notice the error Failure to raise concern Research protocols Protocol location Communication regarding new protocols Staff, handoffs Staff discontinuity and multiple handoffs Non-standard language Lack of processes to monitor, review adverse drug events Drug dose and delivery checking, but always against the original dosage Retrospective adverse event (QA) monitoring can not identify patterns of errors Little data on errors Limited senior oversight

Designing Healthcare Operations
Are the operations of the firm internally consistent with its true mission? Is this mission in line with customer expectations? Corporate Strategy/ Mission Org Skills Resources Policies Leadership Culture CUSTOMERS 1. INTENRAL CONSISTENCY? 2. MEET CUSTOMER EXPECTATIONS?

Internal Consistency Organizational Skills/ Human Resources
Who do you hire? How many? What mix? Clinical Skills (e.g., MDs, RNs, Phys Ext, residents) Management Skills (e.g., op planners, admin, marketing) How do you pay them? How do you train them? Organization Resources Technology Central IT QC systems Error systems Infrastructure Physical plant design Organizational Policies Patient Selection Policies Financial Incentives Non-financial Incentives Clinical Decision Management Tools Leadership, Culture Who is in charge? What do they value?

Customer Expectations
Types of Customers Insurance Employers Patients Government Regulators (e.g., JCAHO) Type of Expectations Quality Safety Service Cost Clinical Competency

Premier Cancer Treatment and Research Hospital
Dana Farber “Culture of Arrogance” Hierarchical structure Individual Autonomy Hire top MDs: “Best and the Brightest” Top admin promoted based on research, not mgt expertise No RN rep on top mgt level Corp Mission: Premier Cancer Treatment and Research Hospital Org Skills Leadership Culture Org Resources Org Policies 1. INTENRAL CONSISTENCY? RNs maintain note cards for protocols QC reliant on individual vigilance Retrospective error investigation QC blame focused: “Nurse was counseled” Protocols kept centrally on top floor 24 Research Departments Research protocol patients not separated from “routine” pt care Tertiary cancer center, broad range of pt severity 70% of pts for treatment, referrals based on MD reputation Many one-off protocols, significant input variation Sick patients, low “signal to noise ratio” 2. MEET CUSTOMER EXPECTATIONS? Patients: Treatment, Safety Insurers: Treatment, Safety JCAHO, Regulators: Safety

Premier Cancer Treatment and Research Hospital
Corp Mission: Premier Cancer Treatment and Research Hospital Org Policies Skills Patients: Treatment, Safety Insurers: Treatment, Safety JCAHO, Regulators: Safety 1. INTENRAL CONSISTENCY? 2. MEET CUSTOMER EXPECTATIONS? Leadership Culture Resources Dana Farber Tertiary cancer center, broad range of pt severity 70% of pts for treatment, referrals based on MD reputation Many one-off protocols, significant input variation Sick patients, low “signal to noise ratio” Hire top MDs: “Best and the Brightest” Top admin promoted based on research, not mgt expertise No RN rep on top mgt level “Culture of Arrogance” Hierarchical structure Individual Autonomy Protocols kept centrally on top floor 24 Research Departments Research protocol patients not separated from “routine” pt care RNs maintain note cards for protocols QC reliant on individual vigilance Retrospective error investigation QC blame focused: “Nurse was counseled”

Dana Farber Cancer Institute: Update
Major publicity and press coverage 28 front page articles Additional overdose victim suffered heart damage (Maureen Bateman) JCAHO, Mass Dept of Health investigations High-profile resignations, low morale Dana Farber Center for Patient Safety (2003) Organizational Resources/Technology: medication order entry systems, electronic patient records, bar codes, and electronic incident reporting Operational Policies: patient safety rounds and patient and staff surveys Leadership – Internal: “A culture of safety that permeates the entire organization” Monthly QI and error reporting, up to the Board of Directors Leadership – External: Patient and family advisory councils and committee representation Revised Mission: Focus on research in teamwork, communication, and medication safety Mass Dept of Public Health: Betsy Lehman Center for Patient Safety and Medical Error Reduction (2004) Coordinate initiatives across hospitals Help victimized patients and families Poorly funded and largely symbolic

Dana Farber Cancer Institute: Summary Points
Emphasize Central Role of Process and Organization in Determining Quality No longer driven solely by the training, clinical excellence of an individual doctor Elucidate the health care manager’s fiduciary duty What managers do has an impact on human lives and, like doctors and nurses, should be accountable to patients Demonstrate the inter-relatedness of clinical and business processes The decisions made by clinicians are dependent on the performance of business processes, systems, organizational structure, and culture.

Dana Farber Cancer Institute: Take-Away Question
Eighteen nurses were disciplined (lost their licensure, received probation, or administratively reprimanded) over this incident. Do you think this is fair? Where should we draw the line between individual accountability and system/organizational responsibility?

Two Brattle Center

Two Brattle Center: Objectives
Introduce basics of financial and administrative management Review managed care concepts Understand the use of physician financial incentives to improve quality and decrease costs Fee-for-service Capitation Case rates, Bundles, Episode Payments Salary Evaluate the use of financial incentives at the group physician level

Two Brattle Center: Managed Care Review
Enrollee Aggregator: Employer Union Cooperative Individual Managed Care Org. Providers: MD Groups Hospitals Other Services Patient Develops benefit package Negotiates price Contract, credential, build network Organize network (HMO, POS, PPO) Pay claims Deliver Care Monitor Utilization Grievance process Pool risk

Two Brattle Center: Managed Care Review
Definition Advantages Disadvantages Indemnity: Conventional Fee-for-service Insurer reviews and pays bills from any provider with little review and management Choose any doctor, specialist, or hospital (even in other states, countries) Very expensive Patient often pays up-front and submits bills to insurer for reimbursement Pays for anything above “usual and customary” PPO: Preferred Provider Organization Loosely-managed network of providers who agree to accept pre-negotiated rates, often will allow “any-willing provider” to join No PCP required No gatekeeper or referral restrictions in-network Economic incentives to stay within network Larger copays, deductibles to go out out-of network Difficult to manage care Patient often must submit bills out-of-network POS: Point of Service Hybrid between HMO and PPO, that requires you see in-network physicians before seeing anyone else Some out-of-network options, but with limited coverage Moderately flexible PCP Gatekeeper, referral needed for specialists HMO: Health Maintenance Organization An established network of physicians, sometimes employed by the health plan (“staff model” like Kaiser) who accept fees and management review practices of the insurer Most affordable Low premiums, copays Low paperwork Least flexible PCP Gatekeeper Network doctors only; no out-of-network option

Review of Provider Payments
Insurer Payment Description Economic Incentive Fee-for-service (Discounted FFS) Physician/Hospital charges insurer for all services through an itemized list; Insurer pays for all appropriate care, often discounting charges by a set rate (e.g., 80%) All Services (tests, procedures) Bundles, Episodes, Diagnosis-Related Groupings (DRGs) A pre-set payment for the care of a condition (e.g., CABG surgery), regardless of how much it costs to treat that patient Patients, Admissions Costs, Length of Stay Capitation Insurer pays provider for each person contractually covered, typically in the form of a small per-member per-month (PMPM) payment, even if the beneficiary never uses the provider’s service. Provider pays for all services required by this population and does not submit a “bill” to insurer. Admissions All Services Per Diems A set payment for each day the patient is in the hospital Days, Length of Stay Other, non-financial incentives: Medico-legal, professional norms, scientific knowledge, patient approval, non-financial competition among MDs (collegiality), patient expectations (i.e., more is better)

Two Brattle Center: Financial Incentives
Characteristics of a physician financial incentive Definition Issues Pro Con Intensity Percent of total reimbursement at risk Affects the amount of physician’s attention commanded Higher intensity more likely to influence physician behavior Higher intensity may distort physician judgment Proximity Sensitivity to individual physician decisions Affects ability of individual providers to influence metric Higher proximity more likely to influence physician behavior Higher proximity may distort physician judgment Specificity Degree of focus on specific activities and metrics Relationship to specific clinical decisions Influence behavior along specific dimensions Undue focus on one aspect of care at the expense of other performance issues Examples: A 50% physician salary withhold based on annual hospital days A $100 bonus for each diabetic patient that maintains proper insulin control

Two Brattle Center Update - Capitation
Why Capitation Didn’t Take Off in the 1990s: Difficult to do right Good management Good information systems Appropriate capitation rates Ran afoul of other trends in health care More open access to providers, making it more difficult to control costs Desire to include pharmacy, hospital services making it more difficult to get it right Became a scapegoat Center of the managed care backlash Blamed for poorly function physician practices Source: Fifth annual Evergreen RE Managed Care Indicator, 2002

Two Brattle Center Update – Trends in Managed Care

Case-based Exercise 1: Using Payment Policies to Drive Behavior
Issue: The way in which physicians, hospitals, and other clinical providers are paid creates substantial incentives in how they might behave Assignment: Select a hypothetical service or product that you would offer to your fellow students at Brandeis (example: computer repair services or a central coffee cart). How would the quality, quantity, and efficiency of your product of service be affected if your customers paid you under different payment scenarios (fee-for-service, capitation, bundled payment, subscription service, others)? How might the behavior of your customers change in each scenario? How would your behavior (as a manager or employee of the service) change if you were paid a salary or a percentage of each service you sold (in other words, a piece rate)? Which scenario or combination of scenarios do you think is best for your business? What parallels can you make toward the delivery of health care services? Consider the financial incentives for both you (as the manufacturer-owner-employee) and your customers. List any assumptions you are making about your customer population and the price of your service. Six page maximum. Due Sept 18, 11:59pm.

Two Brattle Center: Take-Away Question
Suppose there was an insurance product that capitates specialists but pays PCPs discounted FFS. How would it work? What are the implications for cost, quality, and the long-term health of both the patients and the plan?

A Pain in the Hip: The clinical process

A Pain in the Hip: Objectives
Discuss the nature of the clinical process that transforms (general) knowledge about a disease into (specific) actions for a patient. Review the types of decision making processes and the how they match to types of clinicians and other decision-makers. Begin a continuing discussion about quality.

Dr. Richard Bohmer’s Guide to Medical Quality
The problems of the health care system can be broken into three main categories: We don’t know what to do. The human body is a complex set of interconnected biological processes Much of medicine is still “art”, rather than “science” 10-20% of all medical care is based on solid underlying science (Office of Technology Assessment, 1986) We know what to do, but we don’t do it. Overuse (e.g., antibiotics for common colds) due to economic incentives, malpractice concerns, or social/cultural demands of American population Underuse (e.g., screening for depression) due to costs or inability to stay abreast of new research findings Inappropriate variation due to a lack of full knowledge, training practices, and patient preferences We know what to do, we try to do it, but we fail. Medical errors, iatrogenic injuries (e.g., hospital-acquired pneumonia)

A Pain in the Hip: The Nature of Care Delivery
Test (Knowledge) Diagnosis (Decision) Outcome Treatment (Implement) Types of Treatment Decisions Rules-based Codified knowledge, easy to learn/follow, programmable Pattern-recognition More difficult to learn, requires expertise and repetition Problem-solving Iterative decision making, iterative experimentation Progressive uncertainty reduction

A Pain in the Hip: Technical vs. Service Quality
Technical Quality Clinical performance measures – diagnoses and treatments implemented Difficult for many patients to judge Service Quality Characteristics that shape the experience of care of patients Easier to judge, forms the basis of much of customer satisfaction Encompasses non-clinical interactions (receptionist, parking, cafeteria) Trade-offs, difficulties Moderate relationship to health care outcomes and costs (reduce delays, eliminate waste, increase compliance, psychological/placebo effect) Patient as a co-producer in the health care outcome Often a conflict between convenience for the patient vs. efficiency of resources for the organization (e.g., after hours care)

A Pain in the Hip: Principles for Service Quality in Health Care
Define the customers and focus on them (versus clinicians or institutions). Understand, design, and simplify the process of care as seen through the eyes of the patient. Great service quality begins with committed and supported employees. “Hire for attitude” Employee satisfaction mirrors customer satisfaction. Develop an effective service recovery program to quickly resolve common problems. Partner with like-minded, service-oriented partners (physicians, suppliers, hospitals, health plans). Service quality will contribute to management of the cost of care. Customers buy results, not products or services; patients and payers will do the same. Breakthrough service firms change the way business is done in their industry. A consistent environment and dedicated stable infrastructure requires committed and skilled leadership. Source: Kenagy JW, Berwick DM, Shore MF. “Service Quality in Health Care” JAMA Feb ; 281(7):

Review of Assignment 1: Assessment of Needs at Brandeis
Stress Reduction! General massage Massage, designer oxygen Foot massages Dorm room “mood” de-stressors Therapy dogs Workout instructor Bad vibe exorcisms Psychics Academic services Tutoring (2) Paper-writing Textbook renting Technology services Phone service Battery loan/recharging Food (4) Food delivery (esp. late-night) Candy, coffee, massage delivery Grocery delivery Cookies Coffee cart Protein shakes Bubble tea Social/Grooming services Tailor Laundry Wake-up service Shoe shine Health, well-being Emergency medical services Dating service Escort service

Narayana Hrudayalaya Heart Hospital: Cardiac Care for the Poor

NH: Objectives Discuss an example of the multiple missions of health care organizations Review the basics of managerial economics Discuss the foundations of insurance and cross-subsidization

“Infosys meets Mother Theresa”
NH: Mission “Infosys meets Mother Theresa” Immediate goals High quality cardiac care, especially for pediatric patients State-of-the-art facilities Telemedicine Cost-effective care Reduced costs through high volume Special funding for the near-poor (but little free care) Increase access to care to rural communities Educate more physicians and nurses to treat more patients Empower community access to healthcare through insurance Long term goals Develop healthcare system in India Serve the poor (of the world?)

Profit = Revenue – Costs
Review of Economics Profit = Revenue – Costs Costs Fixed Costs: Rent, Equipment, Salaries (short term) Variable Costs: Drugs, Supplies, Bed Linens, Salaries (long term) Opportunity costs The cost (and value) of the most valuable forgone alternative Economies of Scale Decreasing cost per unit as output increases Tends to occur with high capital costs or high learning curves Economies of Scope Decreasing cost per unit as number of product types are increased Tends to occur with central overhead (e.g., advertising, salesforce) or synergies between products (e.g., razors and blades) Cross-subsidization, Loss-leader Certain products lose money (do not cover even variable costs), but are necessary for the portfolio of products (e.g., obstetrics, emergency rooms) Return on Investment/ Payback Period A measure of cash/profit from an investment for a specific time period (ROI), or the amount of time required to recoup investment and breakeven (payback) Depreciation represents the time value of money (e.g., a $100 now is worth more than $100 two years from now)

Update: Dr. Shetty & NH Heart Hospital
Narayana Hrudayalaya Heart Hospital 1,000 beds 24 operation theatre Performs 50 major heart surg/day Patients from 73 countries; large medical tourism channel Dr. Shetty 2005 Social Entrepreneur of the Year Considering options for “exporting” model to other countries 2009- Agreement signed with Cayman Islands to build $2bn hospital Discussions with Mexico (US medical Tourism) Source: Geeta A. “The Henry Ford of Heart Surgery; In India, a Factory Model for Hospitals Is Cutting Costs and Yielding Profits, “ Wall Street Journal Nov 25, 2009, pA16.

Update: Narayana Hrudayalaya Heart City, Bangalore
Asha Dinesh Institute for Organ Transplant: specialized in transplantation of heart, lung, kidney, liver, pancreas and bone marrow Sparsh Hospital: 500 bed orthopedic & trauma hospital for othropedics, joint replacement, pediatric orthopedics, spine deformity correction, sports injuries and cosmetic surgery Narayana Nethralaya Eye Hospital: 300 bed Hospital with an infrastructure to perform 500 cataracts per day, as well as Lasik, cataract, paediatric ophthalmology and refractive surgery Mazumdar Shaw Cancer Center: World’s largest cancer hospital with 1400 beds and 20 operation theatres; departments include Head and Neck Cancer, Breast Cancer, Women and Children’s Cancer, Blood Cancer, Genetic and stem cell research center A full-fledged 1400-bed Multi-Specialty hospital that handles Neurosurgery, Neurology, Paediatric, Nephrology, Urolgy, Gynaecology, Gastroenterology, and ENT cases. “Projects soon to be commissioned in this campus are: bed Neurosciences hospital, bed Nephrology center Bed Women and Children Hospital In totality it will be a 5000 bed Health City that will be able to cater to more than patients daily bringing down the costs substantially. “ Source: Accessed September 2010.

Update: NH Yeshasvini Trust
Finances of the Yeshasvini Trust Collections Avg. Monthly Coll. Claims Net Claims Paid Enrollees (Govt Share) Per Enrollee Paid Profit (Loss) Per Enrollee million 145.6m Rs (32%) 5.2 Rs 106.5m Rs 39.1m Rs 5.5 Rs million 166.6m Rs (23%) 5.3 Rs 180.8m Rs (14.2m Rs) 7.5 Rs million 279.0m Rs (40%) 9.3 Rs 257.9m Rs 21.1m Rs 14.3 Rs million 415.9m Rs (47%) 10.2 Rs 380.8m Rs 35.5m Rs 17.6 Rs Current “nearly 3 million” approx 10 Rs “Lessons” in Microinsurance “Without the scheme, many beneficiaries would not have been able to obtain the surgery they have received. Yeshasvini helped to save a number of lives.” “The scheme received government subsidies in all years of operation. With the increased premium in the third year, the scheme is expected to get closer to financial viability … Increasing premium together with insufficient information results in high rates of nonrenewal.” “It is possible to provide cashless health care services to the poor. But the price of providing cashless services is a pre-authorisation for surgery, taking days to be issued. Long authorisation for surgery constitutes a burden to poor clients as they might need to travel to the hospital twice or face the (opportunity) costs of waiting.” “Adverse selection also occurs since ill clients can join the scheme. A screening procedure needs to be defined to address this issue. The right procedure could again be an incentive for households to join as a whole.” Source: International Labour Organization, Consultative Group to Assist the Poorest. CGAP Working Group on Microinsurance - Good and Bad Practices; Case Study No. 20: Yeshasvini Trust, Karnataka India.

Narayana Hrudayalaya: Take-Away Question
If overall costs decrease as a hospital’s volume increases, what are the limits to growth in these health care facilities? Should every major American city have only one hospital? How do we balance the benefits of scale economies against the incentives created from competition between hospitals? What is the role of patient access?

Bridges to Excellence: Bringing Quality Health Care to Life

Bridges to Excellence: Objectives
Examine the use of physician and patient specific financial incentives to change behavior Changing clinical practice, and/or Inducing risk selection (of patients and physicians) Discuss the components of a physician behavioral change program Examine the social and professional implications of incentive systems for physicians

BTE: Summary PROs Offers a goal and incentive
Specific outcome measures, linked to process Physician-patient interaction as the focus Treats MD as a customer of the Quality initiative Patient incentives Online patient tools and support systems Realistic that money counts, rewarding good service (akin to tipping) CONs Pays physicians and patients for things they are supposed to do anyway (seen as “bribing”) Not good a changing behavior, mainly attracts specialists, steers patients to these MDs Intensity of financial incentive No patient measure of satisfaction Scalability? Generalizability? May create two-tiered care

BTE: Attempts to Change Physician Behavior
Specify Measurement Measure patient outcomes and publish results NY Cardiac Lists Best Doctors Customer Satisfaction Surveys Specify Process Mandate clinical choices that are shown to associated with patient outcomes Disseminate Best Practices, Guidelines Carepaths Utilization Review Formularies Specify Structure Create infrastructure that leads to better clinical choices Financial Incentives Leapfrog: CPOE, Intensivists

Update: Bridges To Excellence
Clinical Areas Cardiac Care Link Ischemic Vascular Disease (Coronary Artery Disease, Myocardial Infarction, Stroke, CABG, etc.) NCQA/AHA Heart&Stroke Recognition Program Blood Pressure Control, Cholesterol Control, Aspirin Use, Smoking Office Care Link NCQA Physician Practice Connections standard Electronic patient tracking, e-prescribing, test and referral tracking, performance reporting Other Care Links: Asthma, CHF, COPD, Depression, Hypertension, Spine BTE Executive Summary (Through 2009) Participating Employers 80, 8 coalitions Participating Health Plans 15 Recognized Physicians 12,000 Current Bonus Payment $125/pt-yr BTE Bonus Earned to date $12 million

Update: BTE Payouts Source: de Brantes FS and D’Andrea BG. “Physicians Respond to Pay-for-Performance Incentives: Larger Incentives Yield Greater Participation,” Am J Managed Care May 2009; 15(5):

Case-based Exercise 2: Understanding Incentives within Payment Reform
Issue: Within the Affordable Care Act and other payment reforms, policymakers have introduced several initiatives to raise the quality, reduce the cost, or improve the efficiency of health services provided by physicians, hospitals, and other health organizations. Assignment: Select one of the initiatives below. Describe the program and its intended goals. Discuss how it is different than the status quo and how it is intended to change the incentives for healthcare providers. Predict specific ways in which organizations might respond to those incentives and manage care differently. ACA Initiatives: Patient-Centered Medical Home Bundled Payment for Care Improvement Readmissions Reduction Program Hospital Value-Based Purchasing Medicare Shared-Savings Program BC/BS of Massachusetts' Alternative Quality Contract Background materials on LATTE. Additional research allowed, but not required. Six page maximum; standard formatting rules apply. Due Oct 2, 11:59pm.

Bridges to Excellence: Take-Away Question
Is pay for performance a threat to medical professionalism? What does it imply about the future of the medical profession?

MGH CABG: Care Paths “I’d study what people are doing, figure out how to standardize it, and then bring it to everyone to execute.”

MGH CABG – Care Paths: Objectives
Review the problem of variation and the appropriate use of standardization in health care Discuss issues with implementation and post-implementation use of care paths Critique process specification as an approach to care management

Unnecessary Variation in Health Care
Price-adjusted Medicare expenditures per beneficiary by hospital referral region (2008) Source: Dartmouth Atlas of Health Care,

Unnecessary Variation (cont.)
Hospital Readmissions within 30 Days (2009) Percent of Diabetic Medicare Enrollees Receiving Annual HgbA1c Testing ( ) Ratio of Total Rates of Spine Surgery To US Average ( ) Physician Visits During the Last Six Months of Life ( ) Source: Dartmouth Atlas of Health Care,

MGH CABG – Care Paths: Evaluation
Comparison of CABG Costs – Pre- and Post-Care Path FY Q1 1995 (Oct-Dec 1994) Pre-Pathway FY Q1 1996 (Oct-Dec 1995) Post-Pathway Change Total Cases 181 231 +50 Average Length of Stay (days) 11.7 10.6 -1.1 Direct Variable Cost per Patient $13,145 $11,166 -$1,980 Full Cost per Patient $26,950 $22,779 -$4,171 Full Cost – Total Cases $4,897,068 $5,280,093 +$383,025

MGH CABG – Care Paths: Post-Implementation
Metrics, Care Path Deviations:

MGH CABG – Care Paths: Post-Implementation
Reasons for Deviations:

MGH CABG – Care Paths: Update and Next Steps
Partial Listing of MGH care paths, September 1997 Medical Service Name of Pathway Stage Cardiac Surgery CABG Final Cardiology Angioplasty Final Children/Neonatal Respiratory Distress Syndrome Final Orthopedics Hip Fracture Final Pulmonary Asthma Final Urology Cystectomy Final Cardiology Myocardial Infarction Pilot Cardiology Congestive Heart Failure Pilot Children/Neonatal Infants of Diabetic mothers Pilot Neurology Stroke Pilot Neurology Acute deterioration/brain tumor Pilot Thoracic Surgery Esophagectomy Development Pulmonary Pneumonia Development Pulmonary Respiratory Failure Development

Gawande’s Cheesecake Factory Analogy
WSJ-Aug 28, 2012: “Three of five hospitals now belong to a parent company's network, while more than half of physicians are employed by hospitals or systems, not independent practitioners.” “…Dr. Gawande's point is that medicine would function better if care were delivered by huge health systems that can achieve economies of scale, like commercial kitchens. Care ought to be standardized like preparing a side of beef, with a "single default way" to perform each treatment supposedly based on evidence, with little room for personalization. “No doubt health care could learn a lot about efficiency from a lot of industries, but to understand the core problem with assembly-line medicine, recall that ObamaCare actively promotes medical corporatism. The reason isn't to encourage business efficiency but for political control. Liberals believe in health-care consolidation because fewer giant corporations are easier … to control, and more amenable to [government] orders.”

MGH CABG – Care Paths: Take-Away Question
Is it harder or easier to implement a care path in a non-hospital setting, like a physician’s office or outpatient clinic? Why?

Mt. Auburn Hospital: Physician Order Entry

Mount Auburn CPOE: Objectives
Critique CPOE as a mechanism for changing physician behavior Understand the strengths and weaknesses of interventions that directly interfere with physician decision-making Document the difficulties of implementing a significant process change within hospitals Begin discussion on the role of information technology in medicine

Langberg, Michael, "Challenges to implementing CPOE :A case study of a work in progress at Cedars-Sinai," Modern Physician 7(2), p

Mount Auburn CPOE: Reasons for implementing CPOE
Patient Safety (i.e., it’s the right thing to do) For Mount Auburn, it’s pretty cost-effective too Medico-legal considerations Adverse events are expensive Cost of additional care, resources Staff costs, time and energy of intercepting errors Cultural change Stress quality, evidence-based medicine Forcing function for codified “best practices” Cost Control Restrictive formularies Guide users to lower-cost medications Fewer staff

CPOE Exercise Review Major Concepts: Relevance
Not all ADEs result in injuries, only “preventable” Not all of these ADEs can be addressed by CPOE Physician Ordering & Transcription (43 out of 87 “preventable” ADEs- ~49%) In reality, only a portion of those actually get “fixed” (17%) Relevance Often asked to answer “important” questions with incomplete data Evaluate both the answer and the quality of numbers available “ADEs … cost hospitals $2 billion per year” Data in Tables A and C are from the BWH, raw numbers are not directly transferrable; percentages can be used to gauge rates and frequencies Critical judgment needed to know whether those data are applicable to Mt. Auburn

CPOE: Professor Zinner’s Numbers
ADEs/Deaths: 11,000 admissions * 6.5% suffer an ADE [page1] * 26% of ADEs are preventable [Tab A] * 49% addressable with CPOE [Tab A] * 17% reduction with CPOE [Tab C] = 15.6 ADE avoided per year * 13% of injuries lead to death [page 1] = 2.03 deaths avoided per year Cost per ADE 1.3 million injuries [page1] * 20% due to ADEs [page1] = 260,000 ADE injuries per year $2 billion to treat ADE injuries - = $7,692 per ADE injury Payback Period 15.6 ADEs avoided * $7,692 per injury = $120,152 saved per year Cost of $380,000 ÷ $120,152 = 3.16 years to break even

Mount Auburn CPOE: Update
Pharmacy Department Mount Auburn Hospital's Pharmacy Department ensures that while you are in our hospital, your medication is dispensed safely and effectively. Pharmacy Director Greg Sophis, RPh works together with your attending physician and care team to evaluate your drug allergies, nutritional restrictions and general medical condition to determine the pharmaceutical solutions most beneficial to your recovery. We offer technologically advanced pharmaceutical dispensing and monitoring systems, partnered with the individualized care and focus of a community hospital. You are never just a number at Mount Auburn. We take the time to consider your individual needs before prescribing any medication. Utilizing Pyxis, an automated dispensing machine, we ensure that you receive your medication on time and in the correct order. We are currently in the process of installing a pioneering Computerized Physician Order Entry System, which allows physicians to input prescription orders directly, instantly enabling allergy alerts, duplicate and dose checking, and possible dangerous drug interactions. This system eliminates human error in your medication dispensation process. The Pharmacy Department also works in conjunction with Mount Auburn's Department of Quality and Patient Safety to create hospital-wide initiatives to consistently protect your health and well-being while receiving care at Mount Auburn. Accessed September 18, 2006 Implementation delays due to physician resistance, technical problems, and need for coordination within CareGroup. “BIDMC built a CPOE system in 2001 and deployed it across all hospital departments … Our community hospitals also are rolling out CPOE and by 2007, all handwritten orders across CareGroup will be eliminated.” John Halamka, M.D., CIO of Harvard Medical School and Beth Israel Deaconess Medical Center.

Update: Health IT in Hospital
CPOE 17% have CPOE system for medications 20% have CPOE system for laboratory tests ~42-25% have no specific plans to implement such a system Decision support 45% have drug-allergy, drug-drug interaction alerts in pharmacy 23% give clinical reminders (e.g., pneumococcal vaccine) 17% imbed clinical guidelines (e.g., beta-blocker reminder after MI) Electronic records system 17% of physicians have at least a “basic” EMR 9.3% of hospitals have at least a “basic” EMR (21% of teaching hospitals) Source: Jha, Ashish K., DesRoches, Catherine M., et al. Use of Electronic Health Records in U.S. Hospitals N Engl J Med :

Major Barriers to EHR Adoption
Percent of physicians reporting a “major barrier” DesRoches CM, Campbell EG, Rao SR, et al. Electronic Health Records in Ambulatory Care – A National Survey of Physicians. NEJM, 2008, 359;1:

Major Barriers to EHR Adoption
Percent of physicians reporting a “major barrier” (cont.) DesRoches CM, Campbell EG, Rao SR, et al. Electronic Health Records in Ambulatory Care – A National Survey of Physicians. NEJM, 2008, 359;1:

Federal Policy Responses
Health Information Technology for Economic and Clinical Health (HITECH) $2 billion as part of ARRA 2009 program Additional $30billion in CMS incentive payments Programs Regional extension centers (60) to provide outreach and support to high-priority PCPs National Health Information Network (national) and health information exchanges (local) to devise a set of protocols for information exchange between any hospital or doctor’s office Beacon community grants (15) to coordinate local efforts for care delivery, Rx management, care coordination, discharge planning, provider measurement and feedback EHR adoption and “meaningful use”

“Meaningful Use” Regulations
What is "Meaningful Use"? The American Recovery and Reinvestment Act of 2009 specifies three main components of Meaningful Use: The use of a certified EHR in a meaningful manner, such as e-prescribing. The use of certified EHR technology for electronic exchange of health information to improve quality of health care. The use of certified EHR technology to submit clinical quality and other measures. Simply put, "meaningful use" means providers need to show they're using certified EHR technology in ways that can be measured significantly in quality and in quantity. Source: CMS EHR Meaningful Use Overview,

Timeline Source: CMS EHR Meaningful Use Overview,

The “Carrot” Eligible professionals are eligible for incentive payments for the “meaningful use” of certified EHR technology, if all program requirements are met. … Under FFS Medicare, the payment incentive amount, subject to an annual limit, is equal to 75 percent of an EP’s Medicare physician fee schedule allowed charges submitted not later than 2 months after the end of the calendar year. Source: CMS EHR Meaningful Use Overview,

The “Stick” Payment Adjustments Beginning in 2015
“If an EP does not successfully demonstrate meaningful use of certified HER technology, the EP’s Medicare physician fee schedule amount for covered professional services will be adjusted by the applicable payment adjustment specified in the Recovery Act beginning in 2015. 2015 – 99% of Medicare physician fee schedule covered amount 2016 – 98% 2017 and beyond – 97% If it is determined for 2018 and subsequent years that less than 75 percent of EPs are meaningful users then the payment adjustment will change by one percentage point each year until the payment adjustment reaches 95 percent.” Source: CMS EHR Meaningful Use Overview,

The Future of “Meaningful Use”
Stage 2 Ratchet-up expectations and expand criteria, especially in: disease management, clinical decision support, medication management, transitions of care, patient access to their health information, communication with public health agencies Stage 3 Focus on improving quality, safety, efficiency for high-priority medical conditions: patient self-management tools comprehensive access to all necessary providers measurement of population health outcomes

Mount Auburn CPOE: Take-Away Question
“Potential ADEs were prevented out of proportion to those that actually resulted in an ADE. While we had not expected the decrease in the preventable ADE rate to reach statistical significance, we did hope that these events would be decreased in proportion to the potential ADEs. That this did not occur suggests that error that actually cause injuries may be different.” -- Exhibit 3, from D Bates, LL Leape, et al., “Effect of Computerized Physician Order Entry and a Team on Prevention of Serious Medication Errors,” Journal of American Medical Association 28(15) 1998: Why? What might explain the difference in error reduction between Potential ADEs (both intercepted and non-intercepted) and Actual ADEs?

Diabetes: The Evolution of a Disease

Diabetes: Objectives Understand the stages of medical knowledge and their evolution over time As the knowledge underlying the management of a disease becomes more highly specified, examine the changes in: The role of the provider and patient, Health care delivery models, Technologies for treatment, testing, and delivery. Discuss how well the changes in diabetes care can be generalized to other diseases

Diabetes: Stages of Knowledge
Name Description 1 Ignorance Phenomenon not recognized or the variable’s effects seem random 2 Awareness Variable known to be influential but can neither be measured nor controlled 3 Measure Variable can be measured but not controlled 4 Control of the Mean Control of the variable possible but not precise, Control of variance around the mean not possible 5 Process Capability Variable can be controlled across the whole range 6 Process Characterization Know how small changes in the variable will effect the results 7 Know Why Fully characterized scientific model of causes and effects, including secondary variables 8 Complete Knowledge Knowledge of all interactions such that problems can be prevented by feed forward control Source: Bohn RE. “Measuring and managing technical knowledge,” Sloan Management Review, 1994; 36(1):

Diabetes: Evolution of Knowledge
Unstructured Semi-Structured Highly-Structured State of Knowledge Stages 1,2 Tacit Stages 3,4,5 Mixed Stages 6,7,8 Explicit, Codified Problem Solving Mode Exploratory, Problem Solving Discriminatory, Pattern Matching Confirmatory, Rules Application Testing Strategy Hypothesis Generation Testing, Directed Learning Cycles Verification Process of Care Research, Trial and Error Best Practices, Individ. Tailored Algorithms, Pathways Site of Care Institutions, Hospitals Physician Offices Secondary facilities, Home Practitioners Researchers, Specialists Physicians Generalists MDs, Other Clinicians, Patients

Diabetes: Evolution of Physician and Patient Responsibilities
Unstructured Semi-Structured Highly-Structured Patient as “Beneficiary”: Receives Prognosis Receives Care Patient as “Subordinate”: Regimen Set by MD Some Self-Delivery Patient as “Participant” Increased Pt Education Dose Modification Behavior Modifications (e.g., diet, lifestyle) Patient as “Partner” Primary Decision Maker Refined Self-Testing MD as “Scientist” MD as “Manager” MD as “Educator” MD as “Cheerleader”

Diabetes: Take-Away Question
Discuss the stages of knowledge as it relates to obesity research. Is this a disease or a social condition? Why is it an “epidemic”? What is the role of the physician in managing obesity? Stage Name 1 Ignorance 2 Awareness 3 Measure 4 Control of the Mean 5 Process Capability 6 Process Characterization 7 Know Why 8 Complete Knowledge

Shared Decision-making

Shared Decision-making: Objectives
Understand the way in which patients make decisions, and the kinds of decision patients make Discuss potential strategies for supporting patient decision-making Examine the hurdles in defining a health care innovation, a health care product, and a marketing/distribution channel

Shared Decision-making: Evidence
Piercy G et al. “Impact of a shared decision-making program on patients with benign prostatic hyperplasia,” Urology 1999, 53:5. Most patients showed a high desire for information and high satisfaction with the SDP; this satisfaction persisted at 1 year. Patients' self-reported knowledge increased significantly (P <0.0001). However, the SDP did not alter initial treatment preferences among those with already formed preferences, although it aided almost half of those initially undecided in forming a preference. Viewing the SDP also appeared to enhance the physician-patient relationship. Karine Gravel et al. “Barriers and facilitators to implementing shared decision-making in clinical practice: a systematic review of health professionals' perceptions” Implementation Science 2006, 1:16 Current evidence suggests that shared decision-making has not yet been widely adopted by health professionals. Review of 31 publications covering 28 unique studies. Most of the studies used qualitative methods exclusively (18/28). Overall, the vast majority of participants (n = 2784) were physicians (89%). The three most often reported barriers were: time constraints (18/28), lack of applicability due to patient characteristics (12/28), and lack of applicability due to the clinical situation (12/28). The three most often reported facilitators were: provider motivation (15/28), positive impact on the clinical process (11/28), and positive impact on patient outcomes (10/28).

Shared Decision-making: Counter Evidence
Dominick L Frosch et al. “Authoritarian Physicians And Patients’ Fear of Being Labeled ‘Difficult’ Among Key Obstacles to Shared Decision Making,” Health Affairs Relatively little is known about why some patients are reluctant to engage in a collaborative discussion with physicians about their choices in health care. To explore this issue further, we conducted six focus-group sessions with forty-eight people in the San Francisco Bay Area. In the focus groups, we found that participants voiced a strong desire to engage in shared decision making about treatment options with their physicians. However, several obstacles inhibit those discussions. These include the fact that even relatively affluent and well-educated patients feel compelled to conform to socially sanctioned roles and defer to physicians during clinical consultations; that physicians can be authoritarian; and that the fear of being categorized as “difficult” prevents patients from participating more fully in their own health care. We argue that physicians may not be aware of a need to create a safe environment for open communication to facilitate shared decision making. Rigorous measures of patient engagement, and of the degree to which health care decisions truly reflect patient preferences, are needed to advance shared decision making in clinical practice.

SDP: Update Conditions Available Current Uses End of Life Programs
Coronary Artery Disease Depression Hip Osteoarthritis Knee Osteoarthritis Benign Prostatic Hyperplasia Prostate Cancer Colon Cancer Screening Ovarian Cancer Uterine Fibroids Abnormal Uterine Bleeding Treatments for Menopause Symptoms Breast Cancer Breast Reconstruction Acute Lower Back Pain Chronic Low Back Pain Spinal Stenosis Herniated Disc Weight Loss Surgery Current Uses Insurers, Integrated Delivery Systems (Kaiser), Veterans Administration Home videos/ DVD, available by request Often offered in conjunction with “Health Coaches” National Health Systems (Canada, England) Dartmouth-Hitchcock Medical Center – Center for Shared Decision Making Interactive kiosk available at center/provider offices Use monitored for research purposes, publications All breast cancer patients schedule for SDP before first visit; Printouts available to both patient and surgeon

Shared Decision-making: Take-Away Question
What is the limit of patient decision making? For instance, is it appropriate for healthy mothers to choose the timing of their child’s birth by elective c-section, rather than undergo normal labor and delivery? Who should set such a policy? What can/should physicians do if they disagree with the medical choices made by their patients?

Duke Heart Failure Program: Disease Management

Duke Heart Failure: Objectives
Discuss disease management as an approach to health care delivery Discover the characteristics of effective disease management programs Review health care economics and (lack of ) financial incentives for delivering quality Examine a delivering model based on sorting simple and complex problems which is capable of providing care to both types of patients

Duke Heart Failure: Health and Economic Outcomes
Pre-CHF Clinic Post-CHF Clinic CHF Admissions (per patient per yr) 1.5 p<.01 CHF LOS (days) 6 5 p=.08 Cardiac Clinic visits - 7.4 Beta blocker use 52% 76% Beta blocker target dose 6% 13% Revenue Costs Hospital: Admissions LOS -$2.73 million -$1.48 million -$700,000 Physician: Admissions LOS Clinic Visits - $205,000 - $ 85,000 +$271,000 Hospital: Clinical Costs (2.5 NP FTE) +$200,000 TOTAL -$2.62 million -$1.98 million NET $892 thousand loss per year Source: Whellan et al. Archives of Internal Medicine 2001. Source: Estimates from case

Duke Heart Failure: Disease Management, Population Management
Definition: An approach to managing chronic condition that aims to prevent costly hospitalizations (poorly controlled condition on a day-to-day basis) or secondary complications (complications from long-term poor management) Characteristics: Proactive – identify patients or potential patients before major complications Systematic – integrates multiple components of care (e.g. drugs, lifestyle changes, etc.) using specified guidelines Multidisciplinary – coordination of activities of multiple caregivers Patient Centered – stresses patient education and participation, as well as decision rights for making changes to the care routine Common Activities: Case finding, Education, Case Management, Increased Testing, Increased Monitoring Common Conditions: Diabetes, Coronary Artery Disease, CHF, Asthma, COPD, ESRD, Depression, High-Risk Pregnancy

Duke Heart Failure: Why DM worked at Duke
Alamance County, Burlington Community Hospital Large Patient Volume Specialty-trained physicians Seeking to strengthen bond with community Low hospital occupancy rate, unable to “fill” No insurance benefit Physicians are not staff, fewer admissions could mean lower wages Loss of internal project leader Duke University Health System Large Patient Volume Specialty-trained physicians Seeking to strengthen bond with community High hospital occupancy rate, able to “fill” with high-margin patients DUHS insures much of community, Able to garner savings Physicians are salaried Highly-trained NP Strong leadership Research mission (grant funding)

Duke Heart Failure: Operational Design Elements
Nurse Practitioner Algorithms Limited number of issues to manage High volume of patients Routine Cardiologist Exception patients Non-algorithm driven care decisions Large number of issues to manage Lower volume of patients Custom Initial sorting process – both MD/NP set up clinical management strategy at initial visit Protocols contain explicit exit criteria Every fourth visit shared with MD/NP Stable cardiologist-NP team per patient Managed Interface

Duke Heart Failure: Take-Away Question
One percent of the population accounts for 27 percent of health expenditures (Berk and Monheit, Health Affairs 2001). Design a disease management program that seeks to reduce the costs of “resource intensive” patients. How might the program differ if it were offered by: A government agency (e.g., Medicare or Medicaid) An integrated insurance/delivery system (e.g., Kaiser Permanente) A national insurer (e.g., Aetna) A large, provider organization (e.g., Partners Healthcare System) A national employer (e.g., General Electric or Ford Motor Company) A private, for-profit management company that is hired by one of these groups

Breakout Sessions Chronic Disease Straining Medicare Budgets
February 24, 2010, 1:33 pm Chronic Disease Straining Medicare Budgets By MICHELLE ANDREWS The growth in health care spending for Medicare beneficiaries is increasingly due to treatment for lifestyle-related chronic conditions like diabetes, high blood pressure and high cholesterol, according to a study recently published online by the journal Health Affairs. The study’s lead author said the results highlight the importance of prevention and care management, but added that current Congressional health care proposals would do little to stem the tide of chronic disease overwhelming Medicare budgets.

Transitional Infant Care Specialty Hospital

Transitional Infant Care: Objectives
Examine the role of service quality in health care Discuss the sustainability of a health care delivery innovation in the context of industry forces

Transitional Infant Care: Overview
Specialty Hospital Existing Care Path time severity NICU/Hosp HOME time severity NICU HOME TIC Unfocused: all aspects of care (intensive to home) Emphasis on technical quality Focus on intermediate care Selective: medically stable, but socially complex Lower cost Emphasis on care experience (infants, parents, staff)

Transitional Infant Care: General Industry Dynamics
Define the Industry Exactly what is your product? Examine the Five Forces Who are your direct competitors? What is the nature of that competition (cost, quality, product differentiation, brand)? Who do you sell to? What do they care about? Where else can customers satisfy their needs? (e.g., Celtics vs. Bruins vs. movies) Where do you get your important supplies (materials, personnel, equipment)? What keeps new/existing companies from starting and competing with you? Issues to consider in Health Care The buyer (insurer) is often not the consumer The patient is both an input and a customer Direct Competition Adapted from M. Porter’s “Five Forces” Suppliers Buyers/ Customers Substitute Products Threat of New Entrants

Transitional Infant Care: Business Strategy
What motivates referral sources? NICU Physicians Quality of care Inconvenience of caring for patient at TIC Pressure to keep patient within hospital to fill beds NICU Staff Ownership of patient Trust/lack of trust for TIC staff Payors Long-term cost of care Parents Referral from trusted physician or nurse (not from insurer) Participate in care, become trained in caring for special needs child Future business strategies depend on which type of referral source you prioritize: Do births, especially for high-risk pregnancies Provide home care Build partnership with (be acquired by) acute care hospitals Market to clinicians with data on quality Market to payors with data on costs, quality

Transitional Infant Care: Update
TIC-Pittsburgh (late 1990s) Replaced Nancy Kennedy with Sharie Rodriguez, former Director of Business Development for West Penn Corporate Medical Services Hired a Director of Marketing Developed a partnership with McGee in which a representative of the neonatology group served as TIC’s Director of Medical Affairs Effect 22% increase in admissions; 32% increase in patient bed days TIC (today): The Children’s Home of Pittsburgh & Lemieux Family Center 28 bed facility “still the only free-standing, sub-acute, pediatric specialty hospital of its kind in the country” serving children from birth to age 21 Child’s Way pediatric extended care center: skilled nursing and child development services to “medically fragile children from birth to age 8 who may also be technologically dependent” – 6:30AM to 6:00 PM M-F Approached by hospitals in Chicago and Richmond to franchise TIC concept

Transitional Infant Care: Take-Away Question
What is the role and responsibility for health care organizations to provide high “service” quality? What is the relationship between service and technical quality?

Setting Policy for the Octomom: The Management of Infertility
Paper #1 Setting Policy for the Octomom: The Management of Infertility

Management of Infertility: Assignment – Write a Policy Brief
Issue: The use of infertility treatments is a growing substantially in the U.S, as couples delay childbearing and advances in medical technology offer hope to previously untreatable conditions. But the associated treatments carry a large cost, both in direct treatment costs as well as the indirect costs of associated neonatal care. Main Question: What policy options would improve the management of infertility? Discuss the key conflicts and policies that would promote more appropriate access, fairness, and efficiency for IVF care. Please be specific and comprehensive in your options. Sub-Questions: What is the role of insurance in IVF treatments? Is infertility a disease for which there be a mandate for coverage? Should there be limits to coverage (age, cycles, patients on Medicaid, etc.)? If so, suggest how each of these might be specifically worded. How do the incentives of patients, infertility doctors, and obstetricians conflict? What policies can be enacted to better align these incentives? The paper is due 11:59pm Oct 29. A non-exhaustive reference list is provided on the course platform. The paper should not exceed 6-8 double spaced pages in 12 point font with 1 inch margins.

Consumer Driven Health Care & High-Deductible Health Plans

Consumer Driven Health Care: Objectives
Review of the common forms of health insurance Evaluate the different perspectives of insurance choice for employers and employees Discuss the connection between health insurance and patient decision-making

Consumer Driven Health Care: CDHC in practice
Health Savings Accounts in the US Signed into law Dec, 2003 (part of the Medicare Prescription Drug leg) Allows an employer or employee to fund an HSA with pre-tax salary if they purchase a high-deductible health plan Switzerland Mandated health insurance for all citizens Insurance purchased individually (not through govt or employers) Thousands of different plans and insurers Federal subsidies for those who can’t afford it Health care prices are set annually through negotiations between insurance companies and providers Universal insurance, consumer/market controlled

Consumer Driven Health Care: Update – Definity Health
Purchased by UnitedHealth Group, 2004 75% membership growth from ; 14,471 employers Avg. HSA account balance May $720 Avg HSA balance for accounts opened Jan-March $1,112 Services Offered: Insurance Balance Statements Health Coaching Personal Health Messaging Quality & Price Information (in some markets) Source: accessed Nov 2008

CDHC: Update – Trends in Employer-Based Insurance
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, ;

Consumer Driven Health Care: Update – Growth of HSA/HDHP
Source: AHIP Center for Policy and Research, HAS/HCHP Census Report

Consumer Driven Health Care: Update – Growth of HSA/HDHP
Consumer-Decision Support Tools Percent of Companies Offering Percent Available Online Patient access to HSA (track expenditures/balances) 93% 95% Health education information 97 98 Hospital-specific quality data 92 93 Physician-specific quality data 86 Other physician-specific information (hospital affiliation, medical education) 94 Health care cost information (negotiated rates, drug prices, procedures) 84 85 Personal health records 90 91 Source: Center for Policy and Research, America’s Health Insurance Plans: Census

Consumer Drive Health Care: Questions/Concerns
Will patients forgo necessary care in order to save money? Is it too complicated for consumers? Will it create adverse risk selection, creating more expensive care for the sick? Is defined contribution eroding employee benefits? We take issue with the growing use of the term “consumer-driven” to refer to the transformation of the health care system to one characterized by high-deductibles. “Defined contribution” health care would be a more accurate shorthand way to refer to a health care approach that essentially increases deductibles and shifts costs to sicker employees. - Gail Shearer, Director of Health Policy Analysis, Consumers Union, Feb Testimony on “Consumer-Driven” Health Care, Joint Economic Committee

Consumer Drive Health Care: Initial Evidence
“Traditional health plan members who switched to high-deductible coverage visited the emergency department less frequently than controls, with reductions occurring primarily in repeat visits for conditions that were not classified as high severity, and had decreases in the rate of hospitalizations from the emergency department.” Emergency Department Use and Subsequent Hospitalizations Among Members of a High-Deductible Health Plan Wharam et al. JAMA. 2007;297: Harris Interactive Survey 2005 ©

Consumer Driven Health Care: Take-Away Question
In the 1980s, the control of retirement benefits changed from employer-controlled pensions to individually-controlled retirement accounts (401ks, IRAs, etc.). This led to a proliferation of investment options (mutual funds) and investment advice (stock brokers, Morningstar investment research) to help individuals manage their retirement accounts. If CDHC continues to grow, will there be a analogous change in the provision of health care and health care advice? What new firms, products, or services might evolve?

Module Wrap-Up: Managing Patient Choices
We have looked at five cases looking at ways to affect patient behavior and decision-making: Diabetes Shared Decision-Making Duke CHF Transitional Infant Care Consumer-Driven Health Care How well do each of these affect patient behavior or patient choice? Which aspects have limited vs. broad generalizability? Which aspects will help improve: Quality/safety? Efficiency/cost? Other important aspects of healthcare?

The Patient Care Delivery Model at the MGH

PCDM at MGH Objectives Review the clinical and non-clinical roles involve in the management of health care delivery Examine how different patient care delivery models allocate responsibilities across providers Evaluate how the design and subdivision of tasks in a service operation affects efficiency and quality Discuss the role of experimentation in health care delivery

PCDM at the MGH: Characteristics of Nursing Duties
Source: Anita L Tucker and Steven J Spear. “Operational Failures and Interruptions in Hospital Nursing”, Health Serv Res June; 41(3 Pt 1): 643–662.

PCDM at MGH: Review of Nursing Models – Structure of Work
British WW2 model “Team Nursing” (but not very team-y), Head RN conduit through which MD’s orders were delivered to patient Patients interact with a number of nurses and assistants Primary Nurse model Direct, personal relationship between RN and patient Breaks down as number of tasks grows, expensive Pre-PCDM model at MGH Task specialization across many workers Gains in efficiency through economies of scale Problems with coordination and information flow New PCDM model at MGH (proposed) Bundle specialized tasks into small, coordinated group Central management of team by RN Managerial Hierarchy Single Operator Assembly Line Team, Small Cell

PCDM at the MGH: Implementation Issues
Underestimating Challenges Busy RNs lacked management skills (and time to learn them) Clinical vs. non-clinical culture clashes – the duty to the patient Skilled labor shortages make new jobs harder to fill than anticipated Inadequate managerial support Misreading the External Environment MGH patient population became sicker … More costly to handle, more RN-intensive tasks PCDM Model breaks down in high acuity, high variability context … while Length of Stay (LOS) became shorter Less routine work, more skilled work, more RN-intensive Nature of the Pilot Demonstration as “Proof of Concept” Experiment as “Development of Concept”: learn, change, re-deploy

PCDM at the MGH: Take-Away Question
Healthcare is becoming more complex, requiring both specialized services and coordination of care. How will the roles of clinical and quasi-clinical personnel change in the next ten years?

Children’s Hospital and Clinics

Children's’ Hospital and Clinics Objectives
Begin a conversation about managing the internal operations of a health care organization Discuss the Blameless Reporting System and highlights the tension between learning and accountability Examine how hospitals (and other health care organizations) can learn and improve over time Discuss the role of the manager as leader of organizational change

Children's’ Hospital and Clinics: Julie Morath’s View of Patient Safety
Source: Julie Morath, presentation 2003

Children's’ Hospital and Clinics Julie Morath’s View of Patient Safety (cont.)

The Patient Safety Initiative (PSI)
Operational Changes Focus Groups Patient Safety Steering Committee Blameless reporting system Focused Event Studies Safety Action Teams, “Good Catch” log Medication Administration Project New Disclosure Policy Less-tangible Changes Creating a safety culture

Blameless Reporting System
Goal: to create a culture willing to use errors as avenues for learning Stem the under-reporting of errors Create a climate of Psychological Safety the belief that the workplace is conducive to interpersonal risk; the ability to speak up, admit error, etc. Tension between “gathering the data” to resolve errors and holding individuals accountable for their actions Julie Morath’s “Blameworthy Acts”: Reckless behavior Disruptive behavior Disrespectful behavior Knowingly violating standards Working way beyond your boundaries Failure to learn over time

Creating a Learning Organization
“A learning organization is an organization skilled at creating, acquiring, interpreting, transferring, and retaining knowledge, and at purposefully modifying its behavior to reflect new knowledge and insights.” D. Garvin (2000), Learning in Action. Boston, MA: Harvard Business School Press. The continuous learning cycle: Gathering and synthesizing data Analyzing and diagnosing data Identifying the change that is required to improve performance Implementing the change Measuring the effectiveness (e.g., gathering more data) Components of a Learning Organization Create an infrastructure that facilitates learning Empower employees at all levels (especially front-line employees) to learn and improve Create small teams, improvement projects, and other forums for learning

Leading a Process for Change
Eight steps to organizational change: Establishing a sense of urgency Forming a powerful guiding coalition Creating a vision Communicating the vision Empowering other to act on the vision Planning for and Creating short-term wins Consolidating improvements and Producing still more change Institutionalizing new approaches John Kotter (1995). “Leading Change: Why Transformational Efforts Fail,” Harvard Business Review March/April 1995.

Children’s Hospital and Clinics Update: Patient Safety Initiative

Update: Medication Best Practices Initiative, 2003
Medication Best Practices – Implementation Status Source: Julie Morath, presentation 2003

Update: Patient Safety Initiative, 2004 to present
Furthering culture change Further round of focus groups (2004) External reporting of safety data Family Education and Training New programs and initiatives CPOE and EMR Barcoding medications Rapid response teams Simulations Smart-pump technology Julie Morath National expert in patient safety To Do No Harm: Ensuring Patient Safety in Health Care Organizations 2009: Joins Vanderbilt Medical Center as chief Quality and Safety Officer

Children’s Hospital and Clinics: Take-Away Question
Recent research suggests that an open-disclosure policy may actually reduce patient lawsuits. Why might this be so? What are the advantages and disadvantages of a blameless reporting system compared to the existing system? Should (and could) the United States reform medical malpractice system toward a “no-fault” system?

Shouldice Hospital Ltd.

Shouldice: Objectives
Understand the concept of a “focused factory” Illustrate the benefits that can accrue from specialization Discuss how organizations can maintain and control service quality Examine the difficulties of scaling a physician-based organization

Shouldice: Review of Case
Earle Shouldice Presentation, circa 2002

Shouldice: Review of Cases of Focus
Duke TCI Shouldice Type of Focus Disease Severity Level Procedure Core Competency Coordination of Care Operations, Service Aspects Operations, Risk Selection, Service Value Good internal management Yes Control over interfaces Implicit, control over whole system Poor Explicit, limited product range Component Design System Design

Shouldice: Update on Shouldice
Alive and kicking 12 full-time physicians; 7000 procedures/yr; 30/day Recurrence rate of <1%, over 300,000 procedures Dozens of reunions a year Growth Opened new wing & Saturday operations in late 1980s No new facilities or new growth Hernia Repair Endoscopic hernia repair, introduced in 1990s RESULTS: The systematic comparison of endoscopic techniques with the Shouldice repair showed that these techniques had significant advantages in terms of the following parameters: total morbidity, hematoma, nerve injury, and pain-associated parameters such as time to return to work, and chronic groin pain. The Shouldice operation has the advantages of a shorter operating time and a lower incidence of wound seroma. There was no difference regarding the incidence of major complications, wound infection, testicular atrophy, or hernia recurrence. Open non-Shouldice suturing techniques are associated with higher recurrence rates and more wound infections than endoscopic operations. Bittner R, Sauerland S, Schmedt CG. Surg Endosc May;19(5):

Shouldice: Focused Factories and Specialty Hospitals
93% of specialty hospitals opened since 1990 are for-profit Typically owned by the admitting physicians Geographically concentrated in states without a “certificate of need” policy Topic of much policy debate: moratorium on new facilities from 2003 to August 2006 Source: Medicare Payment Advisory Commission, “Report to the Congress: Physician-Owned Specialty Hospitals, “March 2005

Shouldice: Assignment – Write a Policy Brief
Main Question: What should policy-makers do in reference to the complaints about specialty hospitals? (for example, Should the government re-institute the moratorium on opening new specialty hospitals?) Please be specific and comprehensive in your options. Sub-Questions: Is focus/specialization good for the health care system (and if so, why)? Does it lead to a centralization of knowledge and best practices? Or does it create a fragmented and discontinuous system of care? Are specialty hospitals a superior model for delivery health care services or are they just "cream-skimming"? What are the arguments? What is the evidence? The paper is due midnight (11:59pm) on Wednesday, Nov 14. A non-exhaustive reference list is provided on the course platform. The paper should not exceed 6-8 double spaced pages in 12 point font with 1 inch margins.

Specialty Hospital Debrief

Student Papers Major Issues to Discuss
Benefits of Focus/Specialization, emphasis on “why” “Cherry-Picking” of “Cream Skimming” Focus on profitable conditions (cardiac, ortho, etc.); general hospitals also make a profit on these conditions, but they “cross-subsidize” this money to less profitable services (ED, burn unit, etc.) Select less severe patients, so costs are lower but revenue stays same Conflict-of-interest, Stark laws Benefits of competition Policy Options, emphasis on a well-argued defense of recommendations

Student Papers – Policy Options
Reform payments Recalibrate DRG system to reduce incentive toward profitable conditions Divide DRGs into different severity levels so “easy” patients are reimbursed less Physician ownership Ban ownership Limit ownership to a certain percentage Ban it but allow profit-sharing Certificate of Need Laws Strengthen CON laws Limit or Ban CON laws Change how Specialty Hospitals operate: Demand that they have an ED, Demand they take all comers Admit a minimum percentage of indigent Partnerships with general hospitals

Professor Zinner’s Take: Correlates of Focus
What focus is not: cost- or skill-based advantages from the (high-volume) repetition of organizational routines Economies of Scale: Reduces average cost by maximizing use of fixed assets Allows for asset-specific investments to improve quality at comparable cost Selection: Entering attractive opportunities, concentrating on profitable market niches Filtering out “bad risks” Cumulative Experience leads to Learning: Multiple Levels: Individuals, Teams, Organizations Cements organizational routines Creates familiarity with most common “exceptions” to protocol Question: Would a high-volume center which maintain a similar volume of cases as Shouldice (like the MGH), achieve similar cost- and quality-benefits?

Prof Zinner’s Take: The “Focused Factory”
What focus is: limiting or confining the set of organizational routines to strengthen their role in production and overall operational performance Focus reduces variability and complexity through: Standardized processes Homogenous inputs Reduced outliers Dedicated (vs. shared) equipment Simpler scheduling Reduced set-up times Streamlining of activities For Shouldice: Batch processing of patients Maximizing capacity utilization Standardization of patients, procedures, facilities, recovery process

Intermountain

Intermountain: Objectives
Observe an institution at the forefront of implementing information technology and intelligent systems design in the provision of health care Examine the use if IT in knowledge creation, knowledge dissemination, and learning Examine a managerial approach involving an explicit attempt to manage care itself rather than the context in which care takes place Discuss whether such systems are generalizable to other health care settings

Intermountain: Update
Intermountain Health Care Operates 21 hospitals in Utah (1 in Idaho) and 142 health care facilities Large market share makes IHC target of state review for anticompetitive practices Brent James Member, Institute of Medicine Member, National Academy of Sciences Winner, JCAHO awarded Brent James, MD, MStat, with its national Ernest A. Codman Award for his leadership in using performance measures to improve quality and safety. Awards Named nations top two integrated health system by Modern Healthcare (ranked either first or second among the 500-plus U.S. integrated systems since 1999). The American Hospital Association's Hospitals and Health Networks magazine named Intermountain Healthcare to its list of the top 100 Most Wired healthcare organizations in the country. Information Week ranked Intermountain Healthcare as one of the nation’s top 50 innovative users of information technology Intermountain's partnership with GE Healthcare will develop a next-generation electronic medical records system, making patient care safer, more affordable, and more convenient Source:

Intermountain: Design Principles
Guiding Principle Implication “Our business is clinical medicine” (page 4) Dedicated to managing the delivery of medical care, rather than the buildings and facilities in which contracting physician provide care. “Design for the common and manage the uncommon cases individually” (page 12) Assumes most care is inherently standardizable. Variation is reduced by grouping patients into homogeneous classes (as opposed to filter and reject). Manage by exception; concentrate attention on unusual cases or where differences in opinion exist. Physician over-rides of flexible protocols whenever necessary. You manage what you measure (Exhibits) Interdependency between management and measurement systems, both clinical and financial. Protocols define both the care and the measures by which care will be assessed. “Would physicians adopt best practices on their own, or must practice be paired with measurement and accountability systems?” (page 14) [Assumes the latter] The locus of quality is the organization and not the individual. Medical outcome is a function of organizational performance – the coordinated and integrated decisions and actions of multiple care givers along the continuum of care.

Intermountain: Managing Clinical Decisions
Defining Standard Care Processes Implementing Standard Practice Monitoring Performance Defining homogenous patient groups, families of care Creating protocols Experts scour the literature Create flow diagrams Merge literature and local experience Reality test protocols Guidance council tests “implementability” Define outcome measures Define work activities Standardize language Define core clinical work processes Electronic medical record Default screens Hot text PCMS – protocol translated to task list Education Physician Patient Decision support tools Antibiotic advisor Ventilator management Physician financial incentives Codifies annual performance goals Profit sharing & bonuses Increased revenue and decreased costs due to better documentation Increased referral stream HELP system High level of data integrity Clinical process measures Clinical costs Tracking progress towards goals Protocol Over-rides Measures variances Provides evidence to update protocols Governance Peer led

Intermountain: Learning for Clinical Quality Improvement
Creating and Capturing New Knowledge Disseminating and Implementing New Knowledge Create New Protocols (lit review) Implement Clinical Protocol Embed new population- based learning into standard operating procedure Aggregate learning: Over-rides, Variances Clinical research Centralize efforts to integrate learning into practice Monitor Performance Follow Clinical Protocol Discover new learning through individual patient experiments Treats clinical protocol as a constantly evolving “best practice” Attempts to convert local-physician tacit knowledge into a central codified protocol Aggregates physician experiences to detect small differences in treatment Balances scientifically-accepted best practice with “how we do it here” traditions

Intermountain: Using IT within Payment Reform
Darren Zinner Presentation, 2012

Intermountain: Take-Away Question
Discuss the role of information technology in promoting quality and safety. Would a system like Intermountain’s have saved Betsy Lehman? Why or why not?

Minute Clinic Mini-Case: Using Health IT to Fundamentally Change Health Care Delivery

Minute Clinic mini-case: Objectives
Examine health information technology and clinical decision support in context Discuss an innovative delivery model, centered on rules-based clinical decision-making Understand the application of the disruptive innovation model to health care services

QuickMedx Today → Minute Clinic
Medical kiosk Concept: Quick (about 15-minute visits and no appointment needed). Affordable (most insurance plans accepted, cash, checks and credit cards also welcome). Convenient (open 7 days a week, located near pharmacies) Staffing: Nurse practitioners and physician assistants Busy sites may have a receptionist Products McDonalds-like Signs advertise available products Strep throat, urinary tract infections, ear infections, etc. If diagnosed with treatable condition, prescription written and filled on site

Products Offered, Circa 2003
Treatments Vaccines Screenings Strep Throat Ear Infection Mononucleosis Sinus Infection Pink Eye, Styes Seasonal Allergies Urinary Tract Infection Wart Removal Tetanus Flu Vaccine Hepatitis B Pregnancy Testing Cost for Treatment: $35, cash only

Questions What are the advantages of seeking care from a PCP vs. Minute Clinic? What types of patients would be attracted to Minute Clinic? Is it a viable business? What would you want to know? What are the limits to growth? Major Threats: Regulatory challenges over quality, prescribing Backlash from physicians Patient flow is unpredictable and seasonal Mixed customer base (uninsured vs. high-income) Hard to scale (esp staffing) Hard to defend

Health-technology enabled business model
Codified knowledge and treatment protocols for high-frequency, low-severity conditions Rules-based decision-making Clear “yes/no” diagnostic tests Capacity management (high capacity, low throughput time, low wait time) Input control, reducing patient variability MinuteClinic Patient Self-Sort NP/Tech Sort “Sort and Reject”

Growth 2002, Added insurance coverage, changed name to MinuteClinic™
, Series of Partnerships in Minneapolis/St Paul area Cub Foods (2) University of Minnesota (1) State Capitol (1) Others (5), e.g., Guidant Corporate Headquarters 2004, Pilot partnership with Target to introduce kiosks in select Baltimore area stores 2005, Partnership with CVS Drug Stores Growth July 2006, Acquired by CVS 83 stores in 13 major cities Nov 2007 402 stores in 23 states Sep 2009 476 stores in 24 states Competition Target, Wal-Mart, Walgreen Drug all establishing their own clinics Several PCPs dedicating “walk-in” hours

Disruptive Innovations (review?)
Examples Sailing Ships vs. Steamships Crossbows vs. Firearms Movie Theaters vs. Television/Home Recordings Macro-, Integrated-computers vs. Personal Computers Traditional Advertising vs. Social Media

Minute Clinic: Is it a IT-enabled Disruptive Innovation?
Two key components: Entering at the low end of the market with a “poorer” product, different value proposition Company competes on convenience, rapid turn around PCPs, ERs compete on comprehensiveness, quality, complexity Over time, improves on the incumbent’s chosen dimension of performance Can Minute Clinic increase the complexity of conditions it treats? If so, how should it expand? Does this conflict with its current competitive advantage? Will increasing the products “performance characteristic” end up destroying the company?

Treatments Vaccines Screenings Strep Throat Ear Infection Mononucleosis Sinus Infection Pink Eye, Styes Seasonal Allergies Urinary Tract Infection Wart Removal Tetanus Flu Vaccine Hepatitis B Pregnancy Testing Cost for Treatment: $35, cash only

Treatments Vaccines Screenings Strep Throat Ear Infection Mononucleosis Sinus Infection Pink Eye, Styes Seasonal Allergies Urinary Tract Infection Wart Removal Impetigo Ringworm Deer Tick Bites Cold Sores Swimmer’s Ear Minor Burns/Rashes Poison Ivy Tetanus Flu Vaccine Hepatitis B Hepatitis A Diphtheria MMR (adults) Meningitis Pregnancy Testing Cholesterol Blood Pressure HbA1c Flu Diagnosis Cost for Treatment: $59 (some vaccines higher, insurance accepted)

Treatments Vaccines Screenings Strep Throat Ear Infection Mononucleosis Sinus Infection Pink Eye, Styes Seasonal Allergies Urinary Tract Infection Wart Removal Impetigo Ringworm Deer Tick Bites Cold Sores Swimmer’s Ear Minor Burns/Rashes Poison Ivy Lacerations Sprains Splinters, Burns, Stings Tetanus Flu Vaccine Hepatitis B Hepatitis A Diphtheria MMR Meningitis Flu-H1N1 Children’s Immunizations (MMR, Hep A/B, etc.) Pregnancy Testing Cholesterol Blood Pressure HbA1c Flu Diagnosis Asthma Epi-pen Refills Diabetes Glucose Screening Weight Evaluation Physical Evaluation (Camp, College, Sports) Smoking Cessation Cost for Treatment: $69 (some vaccines, screenings, counseling higher)

Retail Pharmacy Clinics, 2013
“Walgreens Becomes 1st Retail Chain To Diagnose, Treat Chronic Conditions” “Walgreens today became the first retail store chain to expand its health care services to include diagnosing and treating patients for chronic conditions such as asthma, diabetes and high cholesterol. The move is the retail industry's boldest push yet into an area long controlled by physicians, and comes amid continuing concerns about health care costs and a potential shortage of primary care doctors. The retail chain becomes the first to offer such extensive primary care through nurse practitioners and physician assistants at more than 300 in-store clinics in 18 states.” (Kaiser Health News, Appleby, April ). Nurse Practitioner Vashtina Ellison-Ruddock examines clinic patient Miguel Morales a Walgreens Take Care Clinic in Washington, D.C. (Photo by Jack Gruber/USA TODAY).

Disruptive Innovations in Health Care?

Current trends, Future Possibilities
Troves of data on the patterns of care and outcomes Use of sub-physician personnel to treat “routine” care Anesthesia: Certified Registered-Nurse Anesthetists Psychiatric Prescriptions: Psychiatrists, Psychologists, Advanced Practice Psychiatric Nurses Chronic conditions: Specialists, Primary Care, Nursing, Health coaches Changes in the site-of-care for less “complicated” procedures Shifts from inpatient to outpatient; office to home care Personalized medicine “apps”

Unresolved Questions How will “disrupted” groups, like physicians respond? Can this alleviate the impending physician shortage? What will happen with the oversupply of “high-end” settings, like hospitals? What role will government/regulation play about who can deliver healthcare? Patient as “co-producer” or care, manager of data? Can patients take on this responsibility? What new jobs and businesses will arise to meet these needs? How does insurance and reimbursement affect this debate? What will be the future role of physicians in our society?

Aspect Medical Systems

Aspect Medical Systems: Objectives
Provide an overview of the medical technology industry Review the function of patents and intellectual property policies in a healthcare context Understand the special regulatory characteristics of pharmaceuticals, biotechnology, and medical devices Examine the managerial issues of process vs. product innovations Begin discussion on the medical technology adoption and dissemination phases

Patents and Policies Definition Rationale Requirements
A patent is a limited-term monopoly granted by the government allowing patent holder to exclude others from “making, using, selling, or importing” an invention. Right to sue to prevent use of an invention. US Patent law established by Jefferson, in constitution Rationale Government economic policy which trades protection for inventors for dissemination of information Patents are enabling publications of inventions in “best mode.” Prior to patents, industry kept advantage via secrecy: guilds. Secrecy discouraged cross-fertilization and innovation. Publicly revealing inventions allows others to build on prior patents, enhancing technological innovation Requirements New (not publicly known, published) Inventive (non-obvious) Useful (practical for any use) Right to exclude (not the right to practice) Typically, 20 years from date of filing Rights may be sold, licensed, etc.

Pharmaceutical Industry Overview
Life Cycle Cash Flow FDA Approval Net Revenues + Cash Flows $0 - Cash Flows 5 10 15 20 30 35 Years Clinical Trials Peak Sales Brand Competition Generic Competition R&D Launch ... however, not every R&D project makes it to market not every marketed drug is profitable

Pharmaceutical Industry: R&D Overview
Average cost to develop a drug to market (including failures) is estimated to require over $1billion. Source: PhRMA R&D Brochure, 2010; PhRMA Industry Report, 2010

Pharmaceutical Industry: Portfolio and ROI
Source: PhRMA Industry Report, 2010

Pharmaceutical/Device Industry Overview: FDA Regulations
Drugs and PMA Devices New and Innovative Products Randomized controlled trials to prove safety and efficacy Versus “gold standard” or standard treatment option Long lead times 1-2 years to complete study (2-5 for drugs) Approximately 1 year for FDA review User Fee: $154k, $58k Improve market adoption Statistically significant results can help drive market adoption Publish clinical trial data provides “free” advertising Most insurers require clinical evidence before allowing reimbursement 510k Devices “Substantially Equivalent” 1) has the same intended use as predicate; and 2) has the same technological characteristics as the predicate; OR 2) has different technological characteristics and the information submitted to FDA does not raise new questions of safety and effectiveness; and 3) demonstrates that the device is at least as safe and effective as the marketed device May make comparisons to more than one predicate device Shorter lead times Approximately 90 day review time User fee: $2,500 Reach market with no clinical evidence of efficacy (low market acceptance) Regulatory approval does not guarantee market acceptance

Aspect Medical Systems: Product vs. Process Innovations
Amount of change required to existing care processes Amount of change to physician/patient’s knowledge of the condition Low High Medical Devices/ Procedures Pharmaceuticals Biotechnology Novel Diagnostics

Aspect Medical System: Process innovations
Adoption of process innovation (vs. product innovation) Reimbursement issues are essential considerations and change dramatically depending on site-of-care, type-of-use, and geography Successful adoption relies on the behavior of the adopter Team (vs. individual) Skills of the user/manager (as much as the characteristics of the technology) Because of learning curves, new technologies often worsen performance and profitability initially

Aspect Medical Systems: Update
Multiple Products Stand-alone products with direct sales force Incorporated into existing patient monitoring systems: Datascope, Datex-Ohmeda, Dixtal Medical, Dräger Medical, GE Medical, Nihon Kohden, Philips and Spacelabs Medical Operating Room Installed in 55% US operating rooms (80% top hospitals) 20 million patients monitored worldwide Intensive Care Unit Other uses in development Alzheimers w/ The Brain Resource Co. Depression

Aspect “B” Case Aspect Medical’s Quantitative EEG Predicts Long Term Effectiveness of Anti Depression Medication MedGadget; Sep 23, 2009 “… Now Aspect Medical Systems is trying its hand in a new market: psychiatry. Finding an appropriate medication, as well as its dose, for a particular patient with bipolar disorder can take a good deal of time and is done without real quantitative tools. The clinical trial being reported by Aspect Medical is supposedly showing that the company’s EEG-based system can be used to track whether a given SSRI (selective serotonin reuptake inhibitor, like Prozac or Paxil) is having positive results on a patient a week after initial doses were administered. “… In the BRITE study, [average treatment response] at one week predicted response and remission with 74 percent accuracy in subjects treated for seven weeks with escitalopram, which was statistically significant. Modeled study data also indicates that subjects who were ATR predicted non-responders to escitalopram had better outcomes if they were randomized to switch to bupropion, an antidepressant with a different mechanism of action than escitalopram. “… Data from a [separate] study at Massachusetts General Hospital (MGH) investigating ATR as a predictor of treatment response was also recently published [in Europe]. The MGH study evaluated ATR in 82 major depression patients receiving selective serotonin reuptake inhibitors (SSRI), and venlafaxine, and showed that use of ATR after the first week of antidepressant treatment may be predictive of treatment efficacy.”

Aspect Medical Systems: Take-Away Question
A small, start-up biotech firm is developing a Bone Morphogenic Protein (BMP), which has been shown to enhance bone growth in animals by reducing the time for bone fusion by 25 percent. The company believes the product could be useful for: Bone fracture repair (speeding time to healing) Hip and knee replacement (cementing in new orthopedic devices) Cranio-facial reconstruction (plastic surgery) Osteoporosis (helping to build bone mass) The company wishes to charge a premium price for the product. Which indication should they select to initiate clinical trials? What criteria should they use? And, to the best of your knowledge, how do the indications compare to one another on those criteria?

Spread of Innovations and Best Practices

Spread of Innovations/Best Practices: Objectives
Discuss the patient safety and quality movement in American hospitals Examine and critique the models of spread of innovations and “best practices” in a health care context The function of networks in the spread The role of external, independent organizations Discuss how the dissemination of innovations and best practices can be proactively managed

Spread of Innovations/Best Practices: Summary of Berwick JAMA Article
Perceptions of the Innovation Perceived Benefit Compatible with values, beliefs, past history, and current needs Complexity Trialability Observability Characteristics of the Adopters Innovators Early Adopters Early Majority Late Majority Laggards Contextual Factors Organizations Leadership Communication Factors Incentives Management Lessons Find Sound Innovators Find and Support Innovators Invest in Early Adopters Make Early Adopter Activity Observable Trust and Enable Reinvention Create Slack for Change Lead by Example

Spread of Innovations/Best Practices: Sharing Best Practices
context size, structure learning culture communication channels knowledge transfer process source message quality messenger reputation motivation to share recipient motivation absorptive capacity relationship with source This slide just shows that we haven’t forgotten that this takes place within a CONTEXT . . . Also part of context is type of exchange relationship – more KT when equity alliance than if contract based (Mowery 1996) Mowery also shows bigger firms have less KT Note: these mechanisms are from Appleyard 1996 Mechanisms for sharing journal articles site visits consortia benchmarking lectures one-on-one communication face-to-face meetings Mechanisms for integrating rules and directives group meetings / problem solving process modularization

Spread of Innovations/Best Practices: Best Practice Collaboratives
“The collaborative is arguably the health care delivery industry’s most important response to quality and safety gaps.” (BS Mittman, VHA, 2004) Definition a short-term (6- to 24-month) learning system that brings together multidisciplinary teams from hospitals or clinics to seek improvement in a focused topic area (e.g. decreasing infection rates) Advantages Promote the transfer of best practices and learning across healthcare organizations Driven by recognition that healthcare is too complex and too important to allow every hospital to learn in isolation. Collaboration allows bigger sample sizes for randomized control trials and better allows health care industry to leverage findings Examples Neonatal intensive care units (Horbar, J. D., et al “Collaborative quality improvement for neonatal intensive care.” Pediatrics 107(1):14-22.) Northern New England Cardiac Surgery Centers (O'Connor, G. T., S. K. Plume, and E. M. Olmstead “A regional intervention to improve the hospital mortality associated with coronary artery bypass graft surgery.” JAMA 275: )

Spread of Innovations/Best Practices: The Collaborative Process
Additional learning aides Phone Monthly Reports Facilitator Consults Site Visits P S A D Team selection Learning Session 1 Learning Session 2 Learning Session 3 Application & Enrollment (~$15,000) Collaborative topic announcement Sponsor Hospitals/Clinics Teams Pre-work What is a collaborative? A collaborative is a type of interorganizational relationship, in which interdisciplinary teams from multiple institutions work together for defined period of time on improving care in a particular area such as decreasing infection rates or decreasing waiting times. In team, there is an explicit intent to create and improve work practices together through an ongoing exchange of information. Collaboratives have run for 6 months to 2 years, but most exist for approximately a year. They are a response to a realization that are widespread quality problems in health care, and that health care is too complex and too important to rely on every hospital and clinic learning in isolation. It is a learning system, which diagramed here.As you can see, there are 3 parties to this relationship. There is the sponsor, who decides the topic and invites organizations to join. In the collaboratives, I’m studying the sponsor has also put together a change package that indicates the aim or goal of the collaborative, the practices that should be implemented. The teams then work to implement the practices or policies. There are the organizations (hospitals and clinics) that enroll in the collaborative for a fee of approx $15k, and select a representative team. Usually, all organizations are from the same country, even though collaboratives are growing in popularity throughout the world. And, there are the teams that carry out the improvement work with the help of staff in the organization and the knowledge from other participating teams. The teams attend learning sessions, which are face to face meetings, where they learn QI techniques and share experiences. In between learning sessions, times known as Action Period, they perform Plan Do Study Act cycles, which are rapid trials of changes. And, the continue to communicate with other teams via monthly conference calls, , site visits and monthly reports. Throughout the collaborative, they can turn to facilitators provided by the sponsor for guidance. My research really focuses on the part of the process that occurs after the second dotted line, where the teams become the focal part of the process. The U.S. Health Resources and Services Administration (HRSA), the United Kingdom’s National Health Service (NHS), the Veteran’s Administration, Peruvian Tuberculosis Program, Russian Health Service and numerous individual organizations are sponsoring and/or participating in these relationships P-D-S-A = Plan-Do-Study-Act

Spread of Innovations/Best Practices: Update: Other “Campaigns”
National Quality Forum – “Safe Practices” Not-for-profit public/private membership organization Set of 30 specific practices established (2003, updated in 2006, 2nd update underway) “Voluntary consensus standards” Leapfrog – “Leaps” Large business consortium Four “leaps”: Computer Physician Order Entry, Evidence-Based Hospital Referrals, ICU Physician Staffing, Leapfrog Safe Practices Score (see NQF) Member companies reward hospitals that demonstrate excellence and/or sustained quality and efficiency improvement through pay for performance programs. Agency for Healthcare Research and Quality (AHRQ) – “Top Safety Practices” Government agency within Dept of Health and Human Services 11 safety practices recommended based on literature search and expert review (2001)

Spread of Innovations/Best Practices: Update: Other “Campaigns”
JCAHO – National Patient Safety Goals (NPSG) Updated annually, for all settings of health care (hospital, ambulatory, nursing home, lab) 2009 had 16 specific goals ranging from improving patient identification to reducing healthcare-associated infections to reducing patient falls Often prescribed as “implement a protocol that includes an evaluation” Used in accreditation: NPSG requirements are scored as either Compliant or Not Compliant; Failure to comply with a NPSG Requirement will result in a “Requirement for Improvement” (RFI). Medicare – “Never Events” Federal policy where reimbursement will be denied for certain egregious medical errors: Surgery on the wrong body part, foreign body left behind Mismatched blood transfusion Patient falls Certain types of surgical infections Catheter-associated urinary tract infection

IHI Alignment with National Health Care Improvement Initiatives
IOM JCAHO AHRQ NPSF CMS CDC AHA NQF “This infrastructure, these partners and nodes, can be a new way to implement change at a national scale. It is like a national rail systems whose tracks can carry many different trains. We, IHI, will use those tracks. But others can also if we build that system right, if we strengthen it. And that is exactly what we’re going to do.” Don Berwick, 12/12/2006 Source:

Spread of Innovations/Best Practices: Where should IHI go next?
The 5 Million Lives Campaign 5,000,000 incidents of harm, 1/6th of total national harm (compared 100,000 lives) 4000 hospitals (compared to 3,100) 2 years (compared to 18 months) initiated December 2006 Individual participant data not released, comparative database not developed 6 Previous Interventions Rapid Response Teams Evidence-based care for AMI Prevent Adverse Drug Events Prevent Central Line Infections Prevent Surgical Site Infections Prevent Ventilator-Assisted Pneumonia 6 New Interventions High Alert Medications (e.g. anticoagulants) Reduce Surgical Complications Prevent Pressure Ulcers Reduce MRSA infection Evidence-based care for CHF Involve Board of Directors International: Similar campaigns in Canada, Denmark, Japan, Scotland, Wales Source:

Spread of Innovations/Best Practices: Extensions
How would the process change if you were leading a different type of campaign? Non-hospital Campaigns Mental Health Health Care Disparities Health Care Prevention Non-clinical Health Care Campaigns “Link all health care providers to an interoperable EMR in two years” Developing Countries Ghana’s Project “Fives Alive!” - Lower under-5 mortality South Africa’s “20,000-plus Campaign” - Prevention of mother-to-child transmission of HIV/AIDS, and increased access to treatment and testing of HIV/AIDS Malawi - Reducing maternal and neonatal mortality World Health Organization’s “Action on Patient Safety: High 5s” Managing Injectable Medicines Assuring Medication Accuracy at Transitions in Care Communication During Patient Care Handovers Improved Hand Hygiene Performance of Correct Procedure at Correct Body Sites

Spread of Innovations/Best Practices: Update: IHI – The 5 Million Lives Campaign
Selected quotes from the IHI website (FAQ): Has the 5 Million Lives Campaign ended? Though the 5 Million Lives Campaign came to a formal close on December 10, 2008, the support hospitals have come to expect from IHI’s Campaigns will not end. What did the 5 Million Lives accomplish? At its formal close in December 2008, the Campaign celebrated the enrollment of 4,050 hospitals, with more than 2,000 facilities pursuing each of the Campaign’s 12 interventions. Eight states enrolled 100% of their hospitals in the Campaign, and 18 states enrolled over 90% of their hospitals in the Campaign … Campaign identified 200 hospitals as mentors—teachers of peer facilities on all 12 of the Campaign’s interventions. 65 hospitals reported going a year or more without a ventilator-associated pneumonia, and 35 reported going a year or more without a central line-associated bloodstream infection in at least one of their ICUs … Rhode Island hospitals … reported a 42% decrease in central-line associated bloodstream infections from 2006 – 2007, and New Jersey has seen a 70% reduction in pressure ulcers through the work of 150 organizations across the state. Did hospitals in the Campaign prevent five million instances of harm? The short answer to this question is that we don’t know yet but IHI is hard at work to better measure progress against its primary aim—massive reduction of patient injuries—through several mechanisms. Source: accessed 11/26/13

Spread of Innovations/Best Practices: Take-Away Question
We have seen several examples of hospital efforts to increase quality: Dana Farber (medical error, culture change) Mount Auburn (CPOE) Childrens’ Hospital, Minnesota (Blameless Reporting) Intermountain (Guidelines through Information Technology) Childrens’ Hospital, Cincinnati (Cystic Fibrosis) IHI’s 100,000 Lives Campaign (hospital mortality) In each case, what were the roles of physician, administrators, and staff? What are some common themes that predicted success or failure?

Ethics, Wrap-Up Thailand Dialysis

Ethics, Wrap-Up: Objectives
Discuss the ethical considerations in managing an entire benefit package Review the tradeoffs in equity, equality, efficiency, and need in determining distributive justice and rationing policies Review course goals and conclude

Thailand Dialysis: Update 1

Thailand Dialysis: Update 2

Ethics, Wrap-Up: Rationing Responses and Dilemmas
Goal Efficiency: gain the most out of limited resources Equality: everyone is considered equal and given a fair chance Equity: give to those that put more into the system Need: give to the worse off first Challenges and Conflicts* Fair Chance vs. Best Outcome How much should we favor producing the best outcome with limited resources (equality vs. efficiency)? Priorities Problem How much priority should we give to treating the sickest or most disabled patients (need vs. rest)? Aggregation Problem When should we allow aggregation of modest benefits to large numbers of people to outweigh more significant benefits to fewer? (need vs. equality) Democracy Problem When must we rely on fair democratic process as the only way to determine what constitutes a fair rationing outcome (process)? Source: Daniels N. “Meeting the Challenges of Justice & Rationing,” Hastings Center Report, July-August 1994; pp27-29.

Ethics, Wrap-Up: Analogues to the United States
Organ Donation/UNOS Kidneys: ~80,000 on active waiting list (~20,000 on list for > 3 years) Waiting “pool” policies: Proximity to the donor (efficiency) Patients medical urgency (need) Blood, tissue and size match with the donor, 6-Antigen match (efficiency) Time on the waiting list (equality) Special allowances for children, under age 11 receive extra “points” (equity) Payback kidneys: sometimes a center harvests an organ that is a “perfect match” for a patient outside the hospital; to ensure that it goes to the best candidate (efficiency), the center is offered a payback kidney for one of their local patients (equity) Non-factors: income, celebrity status, race/ethnicity Other analogues: Mammography screening, specialty pharmaceuticals

Ethics, Wrap-Up: Research vs. Quality Improvement
Clinical Trials Pharmaceuticals, Biologics Technology Adoption New Devices, Procedures (Aspect) Outcomes, Administrative Databases (Intermountain) Quality Improvement Initiatives (MGH Nursing) Management (Duke CHF) Where on the scale do you initiate study subject protection (e.g. IRB review)?

Ethics, Wrap-Up: Quality Improvement and Research
Criteria: “the majority of patients involved are not expected to benefit directly from the knowledge to be gained”, OR “if additional risks or burdens are imposed to make the results generalizable.” Examples: 1: Knowledge benefits patients? 2: Additional risks or burdens? Reviewed as research? Chart review of ICU discharges No n/a Yes Cost-effective analysis of a physician reminder system to decrease length-of-stay No: only if it can leads directly to patient’s LOS Post-discharge satisfaction survey No: unless applicable to future site of care Clinic satisfaction survey Yes: most patients expected to benefit Clinic patients randomized to receive appointment reminders and no-show rate measured Yes: stable clinic patients would benefit No: randomization not standard but poses no risks Source: Casarett, Karlawish, and Sugarman, “Determining when quality improvement initiations should be considered research: Proposed criteria and potential implications,” JAMA 2000, 283(17):

Wrap-Up: Review of Course Objectives
The course is designed to meet the following objectives: Analyze the clinical and business processes involved in health care delivery within the context of real-world case scenarios; Understand the complex interactions between science, medicine, health care delivery and the practice of management; Recognize the requirements of health care administrators, including their legal, ethical, fiscal, and managerial responsibilities to their internal organizations, external stakeholders, and the general public; Discuss the implications for the design and adoption of new technologies and delivery models into health care delivery systems; and, Develop an understanding of how public policy decisions influence the choices of individual healthcare organizations, which in turn create societal problems requiring public policy actions.

Wrap-Up: Review of Themes Presented on Day 1
Themes Discussed in the Course: The role of the organization in health care Quality embodied in a person vs. Quality of a system Hospitals, Clinics, Insurers, Employers, Pharmaceutical/Device Firms Designing and Implementing new health care services The role of data and evidence Targeting the right group of patients/customers Changing behaviors (patients, providers, organizations) Growing the business Health care financing Balancing “public health” with “private returns” (aka, No Margin, No Mission) Evaluating the conflict of incentives between individual organizations and the health care system

Thank You Please complete the online evaluations
See me about a Senior Thesis or other HSSP classes Feel free to drop me a note in the forthcoming few years and let me know how you are doing

Backup Cases

Veterans Health Administration: Assignment – Write a Policy Brief
The Veterans Health Administration has recently undergone a quality and safety transformation through strong, focused management efforts. Write a policy brief that outlines what lessons can be learned from these efforts by other physicians, hospitals, insurers, or health care systems. Main Questions: What lessons have been learned from the transformation of the VA health care system? What would you recommend policy makers focus on when trying to overhaul the rest of the health care system? Please be specific and comprehensive in your options. Sub-Questions: What were the key aspects of the VA transformation? How did they implement these changes? How successful were these efforts? Can these strategies be employed in other health care settings? Why might these strategies be more (or less) successful in the VA than in other health care facilities? Based on the lessons of the VA (as well as those discussed throughout the semester), what are the top priorities for decision-makers in trying to create a better health care system in the US? The paper is due 11:59PM on Tuesday, Dec 16. A non-exhaustive reference list is provided on the course platform. Please cite all your sources. The paper should not exceed 6-8 double spaced pages (not including bibliography) in 12 point font with 1 inch margins.

Cipla: Objectives Review the function of patents and intellectual property policies in a healthcare context Provide an overview of the pharmaceutical industry Discuss the role of a corporation’s property rights vs. the public’s interest, especially as it applies to developing nations

Patents and Policies Definition Rationale Requirements
A patent is a limited-term monopoly granted by the government allowing patent holder to exclude others from “making, using, selling, or importing” an invention. Right to sue to prevent use of an invention. US Patent law established by Jefferson, in constitution Rationale Government economic policy which trades protection for inventors for dissemination of information Patents are enabling publications of inventions in “best mode.” Prior to patents, industry kept advantage via secrecy: guilds. Secrecy discouraged cross-fertilization and innovation. Publicly revealing inventions allows others to build on prior patents, enhancing technological innovation Requirements New (not publicly known, published) Inventive (non-obvious) Useful (practical for any use) Right to exclude (not the right to practice) Typically, 20 years from date of filing Rights may be sold, licensed, etc.

Pharmaceutical Industry Overview
Life Cycle Cash Flow FDA Approval Net Revenues + Cash Flows $0 - Cash Flows 5 10 15 20 30 35 Years Clinical Trials Peak Sales Brand Competition Generic Competition R&D Launch ... however, not every R&D project makes it to market not every marketed drug is profitable

Pharmaceutical Industry: R&D Overview
Average cost to develop a drug to market (including failures) is estimated to require over $1billion. Source: PhRMA R&D Brochure, 2010; PhRMA Industry Report, 2010

Pharmaceutical Industry: Portfolio and ROI
Source: PhRMA Industry Report, 2010

Cipla: Update Nov 2001: WTO Doha Declaration on TRIPS
Supports right to impose compulsory licenses of life-saving drugs when facing national emergency Does not authorize countries to break patents export 2002 addendum allows countries without manufacturing expertise to allow for compulsory licenses from foreign companies Jun 2003: Cipla introduces Triomune (once-a-day triple cocktail) at $250 per patient per year Oct 2003: Cipla reaches agreement with Clinton Foundation to supply Triomune for $140 per patient per year, but will not accept patent infringement liability Mar 2005: Indian government passes patent protection regime to comply with TRIPS Over the lobbying efforts of Hammied

The Patent-Based IP System for Medical Technology
Problems: Recovery of research costs by patent monopoly reduces access to drugs Research priorities driven by market demand (versus health need) Resources misallocated to marketing (versus research) Creates inherent market failures for product dissemination Third-party payers (e.g., insurers) distort market incentives System discriminates against US patients, employers, and taxpayers Source: Barton JH, Emanual EJ. The Patents-Based Pharmaceutical Process: Rationale, Problems, and Potential Reforms JAMA Oct (16):

Alternatives to the Patent-Based IP System (1)
Change drug prices Price controls + Lowers prices and increases access + Administratively easy to enact - Reduces corporate incentives for research Tiered pricing – higher prices in developed countries, lower in emerging + More global accessibility, less mis-incentives for conditions aimed at developed nations - Reduces corporate incentives for research for diseases of the poor - Re-importation issues - Adverse publicity Source: Barton JH, Emanual EJ. The Patents-Based Pharmaceutical Process: Rationale, Problems, and Potential Reforms JAMA Oct (16):

Change industry structure “Buy Out” pricing system: Cash bonus of public money to companies equal to estimated profits + Lowers prices to marginal costs + Increases access - How to determine which drugs should be bought out? - How do determine a fair price? - Large budgets and political will needed to pay up-front Public sector as research funder, IP holder; industry as developer, distributor + Creates market to develop products with no market (tuberculosis, bioterrorism drugs) - Concentrated decision-makers - Inefficient development process from guaranteed returns - Resistance of corporate involvement due to low profits Source: Barton JH, Emanual EJ. The Patents-Based Pharmaceutical Process: Rationale, Problems, and Potential Reforms JAMA Oct (16):

Change development incentives Disease burden incentive system – “pay for performance” where financial returns depend on actual impact on global health (evidence-based pricing) + Focuses attention on truly international health issues + Flexibility on how to address diseases (e.g., clean water) - Difficulties on how to determine actual effect on global health - Requires restructuring of entire system - Little incentive for orphan, rare disease Orphan-drug approaches: incentives for small-market or disease disproportionately affect the poor + Greater incentive, tax breaks can decentralize decision making - Costs per patient may be very high Require head-to-head demonstrations of improvement + Shifts focus to impact of new products - Not all “me-too” products are clinically identical - Competition drives down costs - Substantially increases clinical research costs

Langer Lab

Langer Lab: Objectives
Examine the role of university research in developing new medical innovations Review the function of patents and intellectual property policies Discuss the boundaries of academic and industrial research

Langer Lab: Professor Zinner’s Opinions
Are the successful? Without Question Is it the man or the organization? The man: I sure can’t respond that quickly Is this science? Yes, but it is packaged within a Product-Development wrapper Does this belong within a university? Trickier question. Yes, the university is in a unique place to conduct this research. But, public money is funding it, young scientists are risking their careers, and Bob Langer and the VCs are getting rich.

Langer Lab: Stages of Medical Technology Development
Research Development Product Market Idea, Hypothesis Generation Target Identification Pre-clinical, In-vivo Studies Clinical Trials Product Launch, Adoption Sales, Dissemination Major Tasks Relevant Govt Agcy National Institutes of Health Basic Applied Translational Food and Drug Administration Academia Industry Primary Setting Small, Biotech Big Pharma “Valley of Death” Between the stages of the R&D process in which the government predominantly invests (fundamental research) and in which industry predominantly invests (commercialization of reliably profitable products) lies what many call the technology "valley of death." That's the gap where private capital markets fail to invest applied research dollars to create so-called "platform" technologies. This market failure occurs because such generic technologies are too expensive or too risky for industry to develop on its own. Yet it is precisely these generic platform technologies that are the seed corn for new products, and in many cases entire new market categories. Bingaman et al. “Needed a revitalized national S&T policy”, Issues in Science and Technology, Spring 2004

Langer Lab: Patents and Policies
Rationale: Publicly revealing how something works in exchange for a limited monopoly New patents build on prior patents, enhancing technological innovation Requirements New (not publicly known, published) Inventive (non-obvious) Useful (practical for any use) Right to exclude Typically, 20 years from date of filing Rights may be sold, licensed, etc. Bayh-Dole Act (1980) Allows universities/hospitals to commercialize inventions derived from federal funds Must share royalties with the inventor Government maintains “march-in” rights US Patents Granted Source: US Patent and Trademark Office

Langer Lab: Growth of Academic Technology Transfer
Source: Association of University Technology Managers (AUTM) FY 2004 Licensing Survey

Langer Lab: Reasons for Tech Transfer
Promote economic development in the region State Schools, Yale Support faculty, retention University/hospital mission Promote technological improvements Help patients eventually Income Source: Association of University Technology Managers (AUTM) FY 2004 Licensing Survey

Langer Lab: Update: Where are they now?
Still going strong: 34 publications in 2007 (so far) Biodegradable polymers, stem cells, drug delivery systems AIRs Acquired by Alkermes, Inc. 2/1999 Partnership with Eli Lilly to produce inhaled insulin, now in Phase III trials David Edwards: professor of Biomedical Engineering, Harvard MicroCHIPS Still a privately-help start-up company in Bedford, MA Reservoirs of drug in micro-pockets can be released passively (through polymer degradation) or actively (via wireless telemetry) Bob Langer Named “Top 100” most important people in America, Time Magazine 2001 Named one of top 15 innovators world-wide, Forbes 2002 Member of 15 Board of Directors, and 30 Scientific Advisory Boards

Langer Lab: Take-Away Question
We have seen a number of cases in which the innovation suffered because it was easily duplicated by competitors. Discuss the role of patenting in determining the progress of a medical innovation. Does it promote new technologies by allowing individuals to invest in their development? Or does it deter innovation by restricting access? Should we allow medical/surgical procedures and best practices (like the Shouldice technique) to be patented?

Novazyme

Novazyme: Objectives Examine the managerial issues in medical technology development Discuss the differences between biologics and single chemical entities Understand the special characteristics of orphan drugs

Novazyme: Pharmaceutical vs. Biotech Companies
Products Chemical Oral Biological Non-oral (IV, IM, SC) Requires special handling, cold storage Entire supply chain need FDA approval Manufacturing Relatively straight-forward Hard to optimize Very difficult to manufacture Hard to scale-up, generate sufficient quantities Huge investments in product-specific capital Sales Physician detailing Large sales force More complex diseases Huge educational component Diagnoses, symptoms, treatment, specialists Smaller, highly-trained sales force Important Constituencies Physician Patient (DTC advertising) Patients (co-providers of care, often self-inject) Geneticists Specialty Referral Centers Patient Advocacy Groups Current Routines Little effect Large effect Different tests, providers, facilities

Novazyme: Orphan Drugs
Orphan Drug Act (1983) Defines an orphan disease as fewer than 200,000 patients in the United States Represents about 6000 conditions (of which ~300 have treatments) Incentives Research grants Tax credits Waived user fees Seven year market exclusivity Effect 10 products received approval from FDA for orphan diseases in 10 years before ODA ~250 received FDA approval in the 20 years since passage Controversies Does not affect the price paid for these treatments, which often run in the tens of thousands per year. Does not prohibit off-label uses, which allow drugs for “rare” disease to be used for more common ailments (e.g., Amgen’s Epogen initially treated dialysis anemia, but now used prophylactically for most chemotherapies) Will genome-based therapies swamp the system?

Novazyme: Update: The Product
Novazyme acquired by Genzyme, August 2001 Federal Trade Commission investigated Genzyme for anti-competitive practices, but concluded that the acquisition will likely help patients John Crowley becomes senior vice president of Genzyme's Therapeutics unit, assuming overall responsibility for Pompe disease programs Myozyme® approved by FDA, April 28, 2006 FDA Clinical Trial 1: 18 infantile-onset patients, aged 7 months or less Within one year, 17% patients required ventilator support; no deaths (vs. 98% one-year mortality for historical controls) Clinical Trial 2: 21 juvenile-onset patients, ages years “The status of patients at Week 52 overlapped with that of an untreated historical group of patients, and no effect of MYOZYME treatment could be determined.” “A Study of the Safety and Pharmacokinetics of rhGAA in Siblings with Glycogen Storage Disease Type II”: Enrollment=2 Several ongoing studies of juvenile- and late-onset Pompe Disease

Novazyme: Update – The People
John Crowley Amicus Therapeutics in 2004, a biotech firm researching lyposomal storage disorders, including those for Fabry, Gaucher, and Pompe diseases. 2004: Served on the Board of Directors 2005: Became President and CEO Megan and Patrick (now age 10 and 8), alive and doing “pretty well” “The medicine has stabilized them, and they're able to go to public school. Their health remains fragile, however, and they still require wheelchairs to move, ventilators to breathe and food pumps to eat.” - Notre Dame Alumni Magazine, Spring 2007 The Story “The Cure: How a Father Raised $100 Million --And Bucked the Medical Establishment--In a Quest to Save His Children” Geeta Anand (WSJ Reporter), published August, 2006 Movie in production (starring Harrison Ford), slated for release in 2008.

Novazyme: Take-Away Question
The Orphan Drug Act was enacted to create incentives to treat neglected or unprofitable diseases in the United States. What incentives do biopharmaceutical companies have to treat medical conditions solely within developing nations (e.g., Merck’s Mectizan® for river blindness)? Who is in a position to induce research and development for “third-world” diseases, and what policies might attract activity?

Update/Future: Role of Payment Reform in Delivery System Reform
Capitation, Global payments Bundled payments Pay-for Performance Coordination Payments Fee-for-service Accountable Care Orgs Outcome measures Care coordination and intermediate outcome measures Simple process and structure measures Less Feasible Episode Payments Continuum of Payment Reform Medical Homes More Feasible Independent physician practices and hospitals Physician group practices Hospital systems Integrated delivery systems Continuum of Delivery System Reform Adapted from: Commonwealth Fund. The Path to a High Performance U.S. Health System: A 2020 Vision and the Policies to Pave the Way, February 2009.

RelayHealth

RelayHealth: Objectives
Discuss the role of the Internet in health care innovation Review HIPAA policies and discuss their effect on quality improvement Examine the difficulties of growing a “network dependent” innovation

RelayHealth: Summary Constituencies MD Patients Plans System Benefits
Increases capacity Increases revenue (but extends hours) Streamlines the MD office practice Patients Convenience Saves time Plans Differentiates company from competition Decreases costs by substituting evisit with face-to-face System Benefits Triages low-complexity cases Enhances MD/Pt relationship Potential for quality improvement Initiates road to EMR Ensures privacy and security Problems Primarily replaces an non-reimbursable phone call; will increases cost by paying for more visits (“woodwork effect”) Contradicts current mental model Legal risks

RelayHealth: “Network Dependent” Innovation
MDs: Want to get paid, have all their plans on the network Patients: Wont get enough patients unless you sign up a lot of MDs Plans: Large investment unless lots of patients use it To be successful, RH needs a critical mass of all three constituencies, creating a “chicken-and-egg” problem

Relay Health: Update: Customers
Current MD Groups (partial) Current Health Plans Alta Bates Medical Group Columbia University Medical Center CareGroup Horizon Family Medical Group Jayhawk Primary Care Johns Hopkins Vasculitis Center Lehigh Valley Hospital and Health Network Montefiore Medical Group North Shore University Hospital Medical Staff Independent Practice Association Orlando Regional Health System San Diego State University Student Health Services South Florida Pediatric Partners Stanford Hospital & Clinics Tufts-New England Medical Center UCLA Medical Group University of Florida Physicians University of Michigan Health System Aetna Blue Cross and Blue Shield of Florida Blue Cross and Blue Shield of Kansas City Blue Cross Blue Shield of Massachusetts BlueCross BlueShield of Tennessee Blue Shield of California CIGNA HealthCare Empire Blue Cross Blue Shield Fallon Community Health Plan Group Health Incorporated Premera Blue Cross

Relay Health: Take-Away Question
What is the role of (local, national) government in creating a “connected” health care system?

HSSP 106A: Managing Medicine Fall 2014 Tue/Thu 3:30-4:50 PM

Similar presentations

Presentation on theme: "HSSP 106A: Managing Medicine Fall 2014 Tue/Thu 3:30-4:50 PM"— Presentation transcript:

Similar presentations

About project

Feedback

Log in

Auth with social network:

HSSP 106A: Managing Medicine Fall 2014 Tue/Thu 3:30-4:50 PM

Similar presentations

Presentation on theme: "HSSP 106A: Managing Medicine Fall 2014 Tue/Thu 3:30-4:50 PM"— Presentation transcript:

Similar presentations

About project

Feedback