Turnaround secrets

posted by John Buntin

In 2004, former Wayne County, Michigan, prosecutor Mike Duggan became the chief executive of the troubled Detroit Medical Center. On day one, he was told the hospital system would run out of cash in six months unless the hospital changed course. Duggan did. Last year DMC ended last year with $2 billion in revenue and a tidy profit.

Duggan recently reflected on how to pull off a successful turnaround. His lessons should resonate with anyone managing a large public enterprise.

Massachusetts and the Bold Move

posted by Penelope Lemov

Those of you who read David Osborne's Health column in this month's Governing (Rx for Reform) know he laid out the case for cost savings via the payment process. He wrote about doing away with fee-for-service payments to doctors and hospitals and replacing them with per-patient fees.

Now, his home state of Massachusetts is moving a step closer to putting such a program in place. According to the Boston Globe, a state commission is poised to recommend to the governor and the legislature that insurers radically change how doctors and hospitals are paid. They will recommend that the current system, in which insurers typically pay doctors and hospitals a negotiated fee for each individual procedure or visit, be replaced with a set payment for each patient that covers all that person's care for an entire year.

Variations of such a plan are being discussed for national health reform. Payment reform is seen as one of the more effective ways of taming costs. It could discourage doctors and hospitals from providing unneeded tests and treatments, and it could force the medical community to provide better post-hospital care so that patients who survive, say, heart surgery, aren't readmitted when their condition deteriorates because they didn't understand follow-up instructions.

Massachusetts would be the first state to broadly adopt such a system.

You Know Your Carbon Footprint. What About Your Health Fingerprint?

posted by Penelope Lemov

We've all heard about carbon footprints and how we--personally and as governments or corporations--should take responsibility for being a Big Foot, for doing the right thing to diminish our negative impact on the environment. San Francisco even has a special Web tool to help you--and the city--measure that footprint.

But what about our impact on the high cost of health care? Are there steps we could take--either in our personal lives or as state and local governments--to make sure we use health care as though it were a finite and precious resource? Only question is, how would we measure our health fingerprint?

One could be overuse or duplication of services. Not just the stuff electronic medical records would presumably clear up, but all the expensive stuff that's ordered by physicians or demanded by patients that isn't really necessary. A lot of us never question our doctor's about whether the MRI or the stress test is just a comfort to have or is really needed. A recent study by the Kaiser Family Foundation and NPR found that "half of the public believes the American health system has a 'major problem' with patients receiving unnecessary tests and treatments."  Could we help cut down on our health fingerprint by asking more questions about why a test needs to be run or a Rx filled?

Another could be lifestyle and wellness--the things we could do to prevent the onset of a chronic condition or ease negative incursions into our health profile. A lot of insurance programs and state health plans are emphasizing wellness. There are ways to measure what we're doing--or not doing--to keep ourselves healthy?

A third could be getting educated about price and quality comparisons. The Kaiser-NPR study reports that "patients generally do not ask about the costs of medical or lab tests they receive. Only 22 percent say they have done so in the past two years." There's a lot of information available on online, and several states have made efforts to provide Web sites that offer comparative value--on price and quality--of hospitals and, in some cases, physicians. Couldn't we cut down on our fingerprint by pricing around for non-emergency procedures and medications?

Just thinking out loud. Got any other ideas about health fingerprinting? Does it make sense? Could it--or should it--work. Is there any value in it?

 

Here's to Your Health and Your Wallet

posted by Penelope Lemov

Looking for some money to save your city's budget? Or to ease the way for your agency? If you and your co-workers have been noodling about how you would do health reform if you were in charge, you've got a chance to win $10 million.

That's what's in the X Prize, a first-of-its kind competition that will focus on "reinventing the health care system in a bold, measurable and scientific fashion to enable dramatic improvement in health care value in the United States."

It's being sponsored by the X PRIZE Foundation, WellPoint, Inc. and the WellPoint Foundation.  (Yes, the same X PRIZE people who in 2004 ponied up the money for the first privately built spacecraft to enter orbit.)

Here's X PRIZE CEO Peter Diamandis explaining why his group has decided to offer a reward for reforming healthcare:

 

The prize, the sponsors say, is "focused on improving health care value through optimal health. The proposed design will align and improve care within communities and proactively assist individuals in optimizing their health in a way that reduces overall costs."

Simple, right? Well, maybe it's slightly easier than building your own orbital spacecraft...

Good luck!

Kids and Foreclosure: A Disaster Waiting to Happen

posted by Penelope Lemov

The foreclosure debacle is a crisis for communities and neighborhoods. It's a financial disaster for property owners (both those threatened with foreclosure and those who live next door to a foreclosed house) and a horrific drain on the local tax base.

But even worse, it has grave consequences for children.

In part, that's because foreclosure often leads to homelessness, which has dire implications for children's health and mental well-being. Even if the foreclosure means moving to another form of housing in another neighborhood, the process uproots children and is likely to have a long-term effect on their education, health and sense of stability.

At a Thursday's Child conference at the Urban Institute, housing advocates, mortgage specialists and urban planners from the non-profit sector looked at the foreclosure issue from the perspective of how it effects children.

Their conclusion: There's not much solid research out there but, according to Ingrid Gould Ellen, a co-director of New York University's Furman Center for Real Estate and Urban Policy, "What does exist shows mobility is detrimental to a child's education and development, especially when the move happens at odd points during the year -- which is what happens with a foreclosure."

One health impact is also clear: When children live in over-crowded quarters, disease thrives. Malcolm Bush, a research fellow at Chapin Hall at the University of Chicago, noted that when housing occupancy runs higher than 1.5 people per room, there's an increase in certain diseases. With foreclosure forcing many families to double up, the numbers per room are climbing as high as 6 to 7 in some neighborhoods.

The point of the conference was clear: The effect of foreclosure on children is an emerging issue that federal, state and local policy makers need to address before it becomes a full blown crisis.

Homelessness Among Families

posted by Penelope Lemov

Many states have programs to target the street people who make up the bulk of the chronically homeless. Few have comprehensive plans for families that become homeless and fewer still, programs to help the children who get stuck in that precarious and vulnerable situation. The extent of the problem and the ranking of states in their approach to it are in a study released Tuesday by the National Center on Family Homelessness, “America’s Youngest Outcasts.”

In terms of rankings, Connecticut comes out on top, followed closely by the tight group of New Englanders. Bottom of the heap: Texas. Close to bottom: Florida. As Ellen Bassuk, president of the center, noted, "Extreme poverty is the driving force behind homelessness, and the top 10 states had poverty levels that were half that of the bottom 10 states."

But that is not all that pushes a family into homelessness. Gloria Guard, who runs the People’s Emergency Center in Philadelphia , notes that many of the families she works with at her center come from communities rife with violence and crime.

"Safety is a big, big issue," she says. "In most of the surveys we’ve done, two out of three moms had had violent partners. That's a common route onto the streets." Once there, homeless children are more likely than their housed peers to suffer from a host of serious childhood ailments, such as asthma, and to have mental health and other developmental problems.

Guard would like to see states and localities give homeless children priority when it comes to accessing programs that assess and treat developmental problems. "It wouldn't even cost them any additional money," she says. "The state could just take what is already available in the mainstream and prioritize it for homeless families."

Medicare Scare

posted by Alan Greenblatt

For all their problems paying for Medicaid, state employee health benefits, SCHIP and retiree plans, the one source of soaring health costs states don't have to worry about is Medicare. The health plan for seniors is strictly a federal affair.

That, suggests Mike Leavitt, is a mistake. "States are at risk in this discussion. The constitutional role of states is at risk," said Leavitt, the former Health and Human Services secretary and governor of Utah.

Leavitt suggested to a panel at the National Governors Association meeting Sunday that reform of the entire health care system depended on changing Medicare. Medicare accounts for 15 percent of health spending but has an outsized influence, with all the players adapted around it, Leavitt said.

And if Medicare isn't changed, Leavitt said, "States will become branch offices of an insolvent partner."

Leavitt's presentation as part of a health panel triggered a discussion among governors about what they wanted to see from a national health bill -- in particular, the question of whether they would be willing to sacrifice control in terms of state regulation of insurance plans in exchange for coverage of more citizens.

Democratic Govs. Jennifer Granholm of Michigan and Ted Kulongoski of Oregon suggested they'd be willing to give up control in exchange for broader coverage. Republican Gov. Mike Rounds of South Dakota expressed reservation about surrendering control, pointing at the "pathetic" state of the federal-run Indian Health Service as a warning.

For all his dire talk -- and Leavitt opened his remarks with a long story suggesting that Argentina's fall from economic powerhouse a century ago to impoverished recent times was perhaps a parable warning of consequences of U.S. indebtedness -- Leavitt also paid tribute to the ingenuity of states.

"I am persuaded that if the national government were to state, here are some standards, you have four years to cover everyone, I do believe states could get this done."

The Economic Engine of a Hospital

posted by Penelope Lemov

With the stimulus package dominating the news, there is constant talk about the multiplier effect: Every dollar pumped into Medicaid, say, could translate into upwards of  $1.75 in economic impact -- depending on the fed match.

Now, Rhode Island Hospitals are bringing that multiplier home. Here's what they figure they are worth in stimulative effect:

Hospitals in Rhode Island spend $1 billion a year on goods and services. Ripple that through the local economy and it generates $2.2 billion.

In 2007, Rhode Island hospitals spent $200 million on capital improvements to their facilities, generating $400 million in the local economy.

Rhode Island hospitals' payroll is $1.6 billion (5 percent of the private workforce). When hospital employees spend that money, it is worth $3.2 billion in economic activity.

Well, that's one way for hospitals to let everyone know how important they are.

Putting a Price on Infection

posted by Penelope Lemov

Pennsylvania was one of first states to require hospitals to publicly disclose infection rates and to detail data on individual hospitals. Now they are starting to see the results of that policy. A study by the Pennsylvania Health Care Cost Containment Council spells out just how much is at stake with hospital-acquired infections—in lives and well being of course but also in dollars and cents.

The study found that, with new policies in place, the infection rate dropped from 19.2 per thousand in 2006 to 17.7 per thousand in 2007. The average bill for patients that contract a hospital-acquired infection during their hospital care is more than five times the bill for someone who gets out of the hospital infection-free.

Patients who do acquire such infections are six times more likely to die. And all that can be reduced just by holding hospitals publicly accountable.

Score One for the Law of Intended Consequences

posted by Penelope Lemov

Sometimes -- make that lots of times -- states pass laws or issue regulations that don't quite work out as intended.

Here's a notable exception: smoking bans. Turns out, bans on smoking in public places have a significant and positive effect on public health. The proof is in a new study that tracked the incidence of heart attacks, comparing rates in the city of Pueblo, Colorado, which has had a smoking ban in effect since 2003, and those in nearby counties that had no such bans.

The findings show that in the 18 months preceding Pueblo's ban, rates in the city and surrounding counties were identical. Three years after the ban went into effect, hospitalizations for heart attack had decreased 41 percent in Pueblo. No significant change was noted in the counties.