Leading CHRISTUS in the New Economic Environment, Part 1

Early this week, I met with two representatives from IBM who asked to hear my thoughts for their 2010 Global CEO study entitled, “Leading in the New Economic Environment.” IBM publishes a CEO report every two years, and interviews 1,200 CEOs across the world regarding how they will lead into the future. This is useful for IBM, as it also provides them with a chance to survey their audience about the directions they will be headed, since IBM has evolved over time from a technology-driven business to a focus on business process and “helping businesses solve the big problems of the day.”

One of the first questions they asked was, “What are the three most important external forces that will impact your organization over the next three years?” I was able to choose from a list they provided, and identified:
1. Regulatory concerns. The change brought to our industry by health care reform will be revolutionary. I still think this is a great time to be in health care, though. I often say that the “good old days” really weren’t that good. We’re able to treat so many more diseases because of advances in medicine and technology than when I was a med student. Granted, these days may not be easier, but they are much more rewarding, and require that we truly must figure out how to be the high quality, low-cost providers in our communities. Ten years ago, you could sleep in your office and make money because Medicare reimbursement was so high. Today, though, only the high quality/low cost providers will be able to prove their value to consumers and survive.
2. Technological factors. CHRISTUS has a commitment to incorporate small technologies (technology that is owned by most people) into every day care. We know that it is possible for diabetics to take a blood sugar reading by feeding a blood sample into their cell phone, which can read it and then send the results to their physician. We also know that tools are being developed for and in use at our Senior campuses like toilet seats that send messages to remote caregivers if the toilet has not been sat on or shoes that send similar messages if they have not been put on. These signs let us know that a Senior in our care has not gotten out of bed, and may need help. All of these tools help us as we move from “health care” to “health.”
3. Globalization. Because of the regulatory environment in Mexico, we operate there as a for-profit and reinvest our profits in our clinics for the poor in rural areas of Mexico. We are now the second largest for-profit health system in Mexico, and are exploring opportunities to expand into Panama and Peru. I really do believe that 10 to 15 percent of the health care solution in the U.S. will be provided by medical travel to Mexico. And we expect the current number of 1 million American expats in Mexico to grow because of our recent recession that undoubtedly affected many retirement funds.

We have worked hard over our history to manage change, which has positioned us well to meet the challenges and opportunities of the future. We have expanded into Mexico; systematized many key functions like our supply chain and home care activities; made future planning a key focus of our organization and are currently reorganizing our portfolio from an emphasis on acute care to 1/3 acute care, 1/3 non-acute care and 1/3 international facilities.

Innovation is a key part of our future planning strategy. This is why we have created and sponsored two Futures Task Forces in our 10-year history as CHRISTUS, and why we founded the CHRISTUS Innovations Institute. We have partnered to systematize our supply chain, extend care to the poor in Mexico and provide psychiatric services at Our Daily Bread in Galveston, Texas, which provides support services to homeless men, women and children.

The folks from IBM who visited with me this week had many more questions about CHRISTUS and our future--too many to fit into one blog post. Therefore, I plan to revisit some of their additional questions in next week’s post as well.

The Cost of Care, Part 5 of 5

The fifth and final section of the Dallas Morning News’ series called “The Cost of Care” featured the approach of Scott & White Healthcare (sometimes called “The Mayo of Texas”) to collaboration instead of competition, examined why primary care physicians may be choosing to move to other models of care delivery and what the U.S. can learn from other countries’ health systems. You can access the series here.

The first article in the final section of the series reports on Dr. Bill Walton’s final day in his 31-year-old popular family practice in Dallas. Walton is moving to Temple, Texas to join Scott & White as a salaried physician because of the pressures and costs of running his solo practice, also known as the “business of medicine.”

The Newsexamines why primary care doctors are “becoming an endangered species.” I have addressed this problem on my blog numerous times. If you are interested in some of my thoughts, you can hear them here. It is clear that the trials and tribulations of primary care doctors must be addressed if we are to provide adequate care to Americans, and especially if larger numbers of them will have insurance coverage in the near future.

The second article provides an in-depth look at the strengths and weaknesses of Scott & White, which is an accountable care organization (ACO) that uses salaried doctors and a team approach to deliver high quality care at a low cost. The company controls costs by managing all aspects of medical care, including health insurance, outpatient clinics and hospice centers. ACOs received quite a bit of attention this summer, as some health care reform proponents suggested them as a way to reward physicians for the quality of care they provide, instead of the amount of procedures they perform. We supported including a Super MEDPAC or Super IMAC if the organization had the power to evaluate ACO and cost-saving projects and suggest them on a large scale instead of having only the power to cut Medicare reimbursement rates.

Jim Landers, a columnist for The Dallas Morning News, also wrote a short column to round out this series that examined the health care systems of other developed countries around the world. None of them are perfect, he concludes, but many have found ways to spend less for equal or better care than that provided in the U.S. I have spent some time comparing our system to that of Great Britain and Canada as well. Like the U.S. health system, each has its own strengths and weaknesses.

My thanks to The Dallas Morning News for its in-depth and informative coverage of the health care industry in Dallas. Surely there was much more to discuss, but their staff did a wonderful job getting straight to the heart of the matter.

The Cost of Care, Part 4

The fourth part of the Dallas Morning News’ five part series called “The Cost of Care” covered home health agencies in Texas and the soaring amount of spending on home health care in the state. You can access the series here.

The article once again aims to examine the fine line between the need for home health agencies and the great services they provide and the abuses of the system and its patients, which can account for a part of the huge increase in costs. It also points to decreases in Medicaid reimbursement rates that some have suggested as a solution to these abuses.

It seems unwise to cut reimbursement across the board for a very necessary service that does much good for patients in order to end some abuses to the system, especially because home care can, in many instances, decrease the cost of care since patients can be treated outside the hospital. Perhaps Texas should re-examine instituting a certificate of need statute as one possible part of the solution.

CHRISTUS HomeCare services are available in Texas, Louisiana and Utah, and we are continuing to invest in those necessary programs. I have blogged before about how we have been realigning our portfolio from its heavy focus on acute care to include one-third non-acute care and one-third international operations because of the trends we’re seeing in our industry and the culture worldwide.

In fact, we continue to believe that advances in technology like remote monitoring devices may make home care services less costly and more effective in the future. They are already assisting us in provide high quality home care today.

Yes, home health care is an important part of the CHRISTUS ministry, and therefore we believe it should remain an important part of the health care fabric in our country.

The Cost of Care, Part 3

The third part of the Dallas Morning News’ five part series called “The Cost of Care” covered the medical imaging industry, which is quickly growing in size and scope. However, some worry that unnecessary scans are driving up expenses. You can access the series here.

The article examines why business is so good for those in medical imaging, which generates $100 billion a year nationally. As The News points out, “More imaging machines has meant significant increases in use, and rising costs for American consumers and taxpayers.”

I have said before that CT scans and MRIs are over-utilized for many reasons, including the fact that patients may demand them because of marketing done by vendors, clinicians may find it easier and faster to do a study rather than spending the time to do an extensive and complete history and physical and because these studies are—at least currently—significantly reimbursed.

The News also quotes a McKinsey Global Institute study, which found that “extra U.S. capacity results in about $26.4 billion in additional costs annually for CT and MRI scans.” The author points to other potential reasons for physician overuse of these technologies, including self-protection from potential malpractice claims, or financial reasons--referring patients for scans to be done on machines they own.

Technologies that have been developed for diagnosis can be extremely beneficial, but can also quickly decrease in overall value because their ease of deliverance and their high financial reimbursement may cause them to become over-utilized. As this technological equipment becomes more affordable, their availability exceeds need and only accentuates the potential for their overuse.

Reform in the U.S. may address some of these issues. (The Texas Legislature has thus far been unsuccessful.) Until then, we will continue to carefully monitor the development and introduction of new technologies, ensure that we’re acquiring and locating appropriate numbers of these technologies in our various regions and business units, utilizing appropriate guidelines to minimize overuse.

The Cost of Care, Part 2

The second part of the Dallas Morning News’ five part series called “The Cost of Care” tackled the doctor-owned hospital dilemma. You can access the series here.

The article does a fantastic job of examining physician-owned hospitals from a variety of angles, admitting that it is a complex issue and that not all physician-owned facilities are created equal. We know that some physician/system partnerships provide much-needed services in a community in an efficient manner. However, we have also seen physician-owned facilities that duplicate services in order to cherry-pick paying patients from the community. These facilities have an Emergency Room in name only—usually a 10 x 10 space—in order to meet legal guidelines, but their main focus is making money, not caring for those in the community who may need it most.

What, then, are we to make of physician-owned hospitals? It is clear that this is an issue where we must tread lightly, examining all the facts before making judgments. While not all physician-owned hospitals exist solely to make money, we must be mindful of the conflict of interest self-referring may involve. It is sometimes hard to distinguish profit motives from patient motives when you are in the thick of things.

As the article points out, data on physician owned hospitals is hard to come by, but my anecdotal experiences with them run the gamut I expressed above. While I believe that all healers have as their highest goal the good of their patients, we have seen some of these hospitals that have positioned themselves to provide only “profitable” care for a small number of patients. We know that physicians must make a living, but doing so in a way that is not in the best interest of a community is immediately suspect.

So we move forward, aware of the pitfalls of and great services provided by physician-owned hospitals. We realize that they, like anything else in health care or life, must be approached with a healthy level of curiosity and—at times—skepticism. Above all, we must do what is best for those we treat, and ensure that our integrity can in no way be maligned as we go about our sacred work.

The Cost of Care, Part I

The Dallas Morning News began a five part series called “The Cost of Care” on the cost of medical care in Dallas in this Sunday’s paper. The news outlet has devoted a section of their Website to this series, which you can access here. It contains polls, interactive maps and links to the online versions of the stories from the series which appeared in print. I would like to take the next few weeks to examine the articles in this series, many of which confirm the positions CHRISTUS has taken for years past.

As health care reform discussions once again overwhelm the news we hear from Capitol Hill, this series is timely and frames the debate well. The articles and vignettes from part 1 of the series, which debuted on Sunday, cover a wide variety of topics, and tell the stories of many local people who can’t afford insurance or struggle to, only to find out in times of crisis that it did not cover their treatment needs. Many of these stories can be accessed online, and I suggest you take a few moments to read them, because they remind us all that the cost of having no or too little insurance is a human one. It is imperative for all of us—health care providers, legislators and regulators—to remember that we exist to serve people, in this case people who are sick and need healing or need preventive care to keep them healthy.

The main article in Sunday’s section aims to answer why Dallas spends more for health care than almost any other big city in America. You may recall this sounds similar to Atul Gawande’s question in his article “The Cost Conundrum, What a Texas town can teach us about health care,” which I have mentioned several times on this blog. The Morning News points out that

In 1992, Dallas was well below the national average in Medicare spending – much less than Fort Worth, Houston, San Diego and 121 other hospital regions across the country. By 2006, spending in Dallas had soared. The Dartmouth Atlas on Health Care now ranks Dallas 13th in the nation, well ahead of Fort Worth and Houston.

The article offers some reasons why this may be occurring, which I have often suggested are the reasons for skyrocketing medical costs. These include
• Overuse and over-prescription of tests and technology. The Morning News says that “Area doctors are seeing patients more often, ordering more tests and doing more procedures.” As I mentioned last week, overuse of diagnostic tests on patients is rampant in the U.S. health care system, and very rarely accomplishes much more than increasing costs.
• Competition causes duplication of costly services, and does not therefore result in reduced costs. The author states that “In other businesses, competition tends to drive prices lower as companies jostle for customers. Not in health care, and not in Dallas. Competition drives up spending.” We have long been in agreement with this statement, which is why we perform a thorough needs evaluation before entering any community. One such evaluation of the Dallas community proved to us that it was over-bedded, which is one reason why the CHRISTUS system has its headquarters in the Dallas area, but is not an acute care provider in this market. We determined long ago that Dallas already had more than enough acute care providers.
• The uninsured and underinsured often delay treatment, ending up in our Emergency Departments—the most expensive place to receive care—when their malady has progressed into something much worse than if we had treated it in its early stages. As a result of this and a gap in government reimbursement, costs for treatment can be shifted to insured patients. The article quotes Gary Brock, chief operating officer of Baylor Health Care System, who said that “ ‘the government reimburses Baylor just 80 percent of its costs for Medicare patients. To make up the difference, Baylor charges privately insured patients 150 percent of its costs.’ “
• Care that is coordinated is best for the patient. The Morning News says that, “A broken market also helps explain a second cost culprit in Dallas. Patient care is not well-coordinated. Once a patient enters a hospital, family doctors say they are left out of the loop. Lots of doctors start duplicating one another's tests, ordering drugs that may interact in dangerous ways and leaving the physician who best knows the patient in the dark.” In fact, family doctors and Emergency Departments or specialists also duplicate tests, driving up the cost of care.
• The U.S. health care system rewards quantity, not quality, and provides perverse incentives for physicians and hospitals to provide more, not necessarily better, care. While we were in Washington, D.C. at the end of July, we had a chance to meet with Mark McClellan, who heads the Engelberg Center for Health Care Reform at Washington's Brookings Institution. We discussed the many proposals coming out of Capitol Hill, and he said much the same thing to us that he said to the Morning News: creating accountable care organizations that pay providers extra for quality and efficiency instead of volume will drive down the cost of care.

The stories told by the Dallas Morning News in this informative series highlight problems with the health care system that are national, not just specific to the state of Texas. Nest week we will examine the second part of the Cost of Care series.

Why all the "to do" about physician integration?

Physicians and their role in the delivery and cost of health care have been in the spotlight recently as the health care debate rages on. Much of these early discussions seemed to result from Atul Gawande’s article in the New Yorker called “The The Cost Conundrum, What a Texas town can teach us about health care” and his follow-up, “The Cost Conundrum Redux.” Gawande suggested that physician overuse and the lack of integration in the care continuum are to blame for the fact that McAllen, Texas has the highest per person Medicare costs in the country. This led to explosive debates around the country about physician liability and integration.

But health systems, clinics and other organizations dedicated to delivering care have long understood that physicians and hospitals, while sharing the same goals, may seem pitted against each other. It is for this reason that physician integration is key to success for health systems and the joint delivery of high quality, low cost care.

The following graphic shows how this integration occurs, but the boxes about the differences show why achieving that it so hard.


How might we bring hospitals and physicians together? We may implement the following strategies for change:
• Set expectations for team process
• Train and educate the team together
• Plan together
• Implement and operate together
• Performance goal setting
• A performance appraisal process
• Shared incentive for financial gain

Ultimately, however, I believe we must gather both groups around the common goal of providing high quality, low cost care using evidence-based protocols. Both groups understand that they have a sacred responsibility to care for human life, and most view this as their definitive purpose. This must be what brings us together.