Happy holidays and happy New Year from Great Boards
The Fall issue of Great Boards looks at two corporate governance trends that are now emerging on boards of not-for-profit hospitals: Chief Governance Officers and "directors' rounds." The issue also includes a best practices checklist for the board and CEO relationship. Go to www.GreatBoards.org to download your copy.
As 2004 comes to a close, here are seven recent news items relating to trends that bear watching in 2005.
Modern Healthcare reports that The Medicare Payment Advisory Commission (MedPAC) has issued draft recommendations for comments calling for elimination of the "whole hospital exemption" that's allowed physicians and investors to open specialty hospitals that compete with full service services. Last year's Medicare Modernization Act put an 18-month moratorium on physician referrals to new facilities where they have a financial interest, but the rule expires in June of 2005. In November, preliminary findings from a Medicare Payment Advisory Commission (MedPAC) study of physician-owned specialty hospitals indicated specialty heart hospitals do not have a lower cost per case than community hospitals, and more frequently transfer high-cost and sicker patients to other facilities.
The findings were released at a MedPAC meeting in November. "This data debunks the myth that specialty hospitals can better meet the needs of heart patients at lower cost," said Caroline Steinberg, AHA's vice president for health trend analysis. A final report to Congress on the MedPAC study, required by the Medicare Modernization Act, is expected early next year.
Director's Cut: After simmering on the back burner, physician-owned and co-owned facilities will return to center stage in 2005. Boards need to assure their hospitals have a sound strategy based on knowledge of the impact of these ventures on their facilities now -- and under various scenarios for the future.
Hospitals can be expected to apply a full court press to limit specialty hospitals that they say skim the cream of financially attractive patients and leave community hospitals with the sickest and poorest patients. This issue cuts to the heart of hospital-medical staff relationships, privileges and business partnerships. Boards need to watch it closely and be prepared to join the advocacy effort. For more information, go to Modern Healthcare's story at http://www.modernhealthcare.com/login.cms or to the Medicare Payment Advisory Commission at http://www.medpac.gov/.
For more background on the issue, see the American Hospital Association's summary at http://www.aha.org/aha/annual_meeting/content/04mtgpaper_
Niche04.pdf.
The Institute for Healthcare Improvement has launched a campaign calling on hospitals to take specific steps that research shows can reduce deaths and complications due to missed warning signs of patient decline, preventable infections, adverse drug events, and failure to take recommended medications. The effort includes steps to prevent catheter-related infections, surgical site infections and ventilator-associated pneumonia, and to standardize care for patients admitted with heart attack. The IHI hopes within a year to enroll at least 1,600 hospitals in the effort. Some big names have already committed to the program, including Ascension Health, Baldrige-winner SSM Healthcare, the Veterans Administration and Kaiser Permanente. The American Medical Association, American Hospital Association, JCAHO and other national groups have endorsed it.
IHI President and CEO Donald Berwick, M.D. announced the initiative at IHI's annual forum on health care quality, which drew some 4,000 quality leaders to Orlando in December. Deriding the complacency in the field that calls for only "some" improvements over time, Berwick declared, "Some is not a number; soon is not enough."
Director's Cut: This is an important effort for boards and their quality committees to embrace. Most of the goals tie directly to existing priorities being tracked by JCAHO's core measures and the CMS national quality demonstration. But several things are different about IHI's new campaign.
The first is an evidence-based, medical improvement methodology called "bundling." Current approaches measure compliance against discrete best practices, such as prescribing aspirin and beta blockers for heart attack patients. Compliance rates of 80 and 90 percent or better provide hospitals and physicians with false reassurance, Berwick asserts, because they mask the fact that unless ALL the best practices are followed for EVERY patient, the risk of preventable death soars. So the new campaign tracks compliance with EACH "bundle" of evidence-based indicators for the targeted conditions, such as the five best practices for preventing central line infections. The "dashboards" used by many boards would be changed to measure bundled performance, not each indicator.
Second, the IHI campaign includes a powerful, new improvement technology called Rapid Response Teams. Research has shown many in-hospital deaths outside the intensive care unit are preceded by a sudden decline in a patient's status over a number of hours, but by the time the patient "crashes" and a resuscitation team is called, it's often too late. The Rapid Response Teams are specially trained to recognize and react to progressive warning signs -- and a nurse or other caregiver can call them at any time they're worried about a patient's deteriorating condition. Developed in Australia and endorsed by the Society of Critical Care Medicine, the teams have had "a stunning effect on outcomes," says Berwick. They have saved 1 life a year for every four acute care beds -- that's 75 lives saved in a 300-bed hospital.
Third, the initiative borrows the time-tested approach of, "We improve what we measure." By setting specific and realistic goals backed by action plans, IHI's campaign gives hospital leaders and clinicians the tools and measurements to achieve results.
For more on the "100,000 Lives Campaign," visit http://www.ihi.org/ihi. You'll find easy to understand explanations of every initiative plus references to clinical literature documenting their effectiveness.
The Centers for Medicare & Medicaid Services has updated its hospital quality Web site with the latest data from hospitals participating in the Hospital Quality Alliance, the public-private initiative led by the AHA and others to share hospital quality information with consumers.
More than 4,000 hospitals currently are sharing their data through the initiative, which assesses how often caregivers follow 10 clinical care steps proven to improve outcomes in heart attack, heart failure and pneumonia patients. Nearly 3,900 hospitals were eligible to receive a full Medicare inpatient payment update for reporting their performance on these measures. Roughly 200 critical access hospitals - small, rural facilities - also volunteered to share their data, though they were not eligible for the incentive, CMS noted.
Director's Cut: Board quality committees should routinely be reviewing their hospital's publicly available quality results and discussing the progress of improvement efforts. To see your hospital's latest CMS data, go to http://www.medicare.gov/Hospital/Home.asp and choose your state and city.
Medicare may begin to use physician profiles to compare and pay doctors.
The Centers for Medicare and Medicaid Services announced in November that it is moving ahead with measures to assess the quality of care provided by doctors outside the hospital and to pay them based on those ratings. The agency already rates hospitals, nursing homes, home health agencies, and dialysis facilities on care and posts that information publicly to help patients pick a facility and to goad providers themselves into making improvements.
In December, the staff of the Medicare Payment Advisory Commission unveiled a draft recommendation that HHS should use Medicare claims data to measure the use of health care resources by individual physicians. The recommendations focus on the fee-for-service part of the program and would compare individual doctors in their use of tests and procedures. The draft recommendation will be voted on early next year.
Commercial health plans have long used such "physician profiling" methods, but MedPAC prefers to call it "resource use measurement." According to The Commonwealth Fund, the members of MedPAC who are involved in managing and purchasing health care believe physician profiling will save money because high utilization doctors will trim their ordering of tests and procedures if they see good data showing their peers get the same outcomes with fewer resources.
Director's Cut: It's not all at clear that this effort will either be approved or funded. Physician groups have already expressed concerns -- but pay-for-performance is advancing on many fronts. Stay informed and be ready. For a succinct summary, go to The Commonwealth Fund's December 13 quality newsletter at http://www.cmwf.org/healthpolicyweek/healthpolicyweek_
show.htm?doc_id=252706.
Organizational culture has been shown to be critical to quality improvement and patient safety. Key elements include a safe environment for staff to report errors and organizational support for continuous improvement initiatives. But how can a board accurately assess the organization's culture from the rarified air of the boardroom?
The Department of Health and Human Services' Agency for Healthcare Research and Quality (AHRQ) has announced a new tool to help hospitals and health care systems evaluate employee attitudes about patient safety in their facilities or within specific units. The survey on patient safety culture--which was released in partnership with Premier Inc., an alliance of not-for-profit hospitals and health care systems; the Department of Defense; and the American Hospital Association--is designed to allow hospitals and health care facilities to measure organizational conditions that can lead to adverse events and patient harm, officials said.
Director's Cut: Board Quality Committees should ask about the hospital's or system's cultural assessment and improvement initiative -- and whether the new AHRQ tool or a similar one is being used. For information, go to http://www.ahrq.gov/news/press/pr2004/hospcult2pr.htm. The survey can be found online at www.ahrq.gov/qual/hospculture/. Printed copies may be ordered by calling 1-800-358-9295 or by sending an E-mail to ahrqpubs@ahrq.gov.
A study in the November 2 issue of Annals of Internal Medicine examines trends in physician supply and concludes physician shortages are emerging and will probably will worsen over the next two decades. The authors estimate the shortage could be as great as 200,000 physicians by 2020 or 2025 if not addressed, noting the number of physicians is no longer keeping up with population growth and that economic trends predict a growing demand for physician services.
Director's Cut: It's déjà vu all over all again, as Yogi Berra would say. Critical shortages of physicians in the 1960s and 1970s prompted increases in funding for training more doctors. Then managed care slashed utilization rates, leading to years of crying about a physician surplus. Now shortages are re-appearing, especially in areas with low reimbursement rates, high malpractice costs, and a high cost of living. Does your hospital have a viable, long-term, physician resources plan? This article is pretty technical and hardly bedside reading for directors -- but it provides compelling. Get a copy at http://www.annals.org/content/vol141/issue9/.
More and more employers will be offering so-called consumer-driven health plans. Plans vary but common features include increased employee choice of providers, cost-sharing and higher-deductibles. Some plans let employees keep money not spent on health needs for future medical expenses.
A new survey by the Kaiser Family Foundation found that employees with employer-paid health insurance aren't eager to switch. Almost three-quarters (73%) said they would have an unfavorable opinion of a consumer-driven plan (including 52% very unfavorable), and 78% said they would feel vulnerable to high medical bills if they had this type of coverage. (Go to http://www.kff.org/healthpollreport/Oct_2004/13.cfm.)
Nonetheless, such plans are coming. "An estimated 1.5 million people are enrolled in these new plans … and some analysts say this type of coverage could account for 20 percent of the health insurance market by 2005 and as much as 50 percent by 2007, according to The Commonwealth Fund. For information go to http://www.cmwf.org/publications/publications_show.htm?
doc_id=221503.
Director's Cut: Boards will want to stay abreast of changes in the local health insurance market as increased consumer choice takes hold.
Several recent publications are worthy of attention by healthcare boards:
* Environmental scan. The Governance Institute's new Environmental Scan for 2005 is now available, and it's a rich resource of major trends and issues boards need to understand. Authored by veteran Jim Rice, the report draws on a variety of well-respected sources in the healthcare industry and identifies six themes and trends The Governance Institute believes will be key drivers of boards' decisions over the next three to five years. Also included is a special, pullout, board action plan or "tool kit," designed to guide hospital and health system board members and their executives scan the issues, determine priorities, and develop action plans. The publication is available only to TGI members at http://www.governanceinstitute.com/_coreModules/
content/contentDisplay.aspx?contentID=426.
* New resource: Book on financial literacy for directors. "Essentials of Health Care Organization Finance: A Primer for Board Members" by Dennis Pointer is designed for directors lacking financial literacy and those needing a refresher on the basics, says the author. It can be ordered by calling Jossey-Bass/Wiley at 800-762-2974 or on line from amazon.com or directly from the publisher at http://www.josseybass.com/WileyCDA/WileyTitle/productCd-
078797403X.html.
CHANGING YOUR E-MAIL ADDRESS. To change your e-mail address on our subscriber list, follow the simple instructions at the end of this message. To keep the Great Boards newsletter free, we ask subscribers to update their own records right on line.
TELL A FRIEND. If you find the Great Boards newsletter and our other governance resources helpful, tell a friend or colleague. Just forward this message to them and they can sign-up free on our website: http://www.greatboards.org/newsletter/subscribe.asp.
FEEDBACK. Have a question or topic you'd like us to address? Interested in retreat or consulting services for your board? Visit www.GreatBoards.org and send a message from the Contact page or send an e-mail to bbader@GreatBoards.org .
Barry S. Bader, Bader & Associates
12225 Seline Way, Potomac MD 20854, 301-340-0903
www.GreatBoards.org *** bbader@GreatBoards.org