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Friday, December 24, 2010

The value of words - What is Value?

I was in a meeting where we discussed the principles of physician compensation. I am actually very proud of my institution in that it is making a concerted effort to get beyond the focus on financial metrics. However, I again was reminded of the difficulty of getting beyond flaws which reside outside of your individual institution, particularly when they are flaws in how people and organizations are financially rewarded for the work they do. No matter how much we want to rise above financial considerations, we are dependent upon money to fuel the engines that drive health care. While money may not be the sole consideration, when it is in short supply, it becomes the major consideration. And it appears to always be in short supply.

As a surrogate for actual billings and collections, we are moving to the use of RVUs, relative value units. They come across with at least the patina of legitimacy. My problem with RVUs is they have been described as the worst of Boston disguised as the best of Chicago. They use the word value but it begs the question as value to whom? RVUs are calculated based upon the objective theory of value, assuming that the value of any good or service can be determined by measuring the inputs required to produce it. This is a fundamentally flawed assumption. No matter how complex the service delivered to any given patient, if the service does not provide something of value to the patient, it is by definition of no value. It might be argued that RVUs are a useful however rough approximation which may be on average correct. I suspect that a closer approximation to reality is that the value assigned to a given activity is almost never aligned with the value actually garnered by actual recipients.

RVUs may be a useful accounting tools when trying to calculate the value of given activity to a practice or health care organization. However, this is where the term value becomes confusing. When various medical pundits throw out the term "value" in medicine, the implication is they are talking about value to patients. Michael Porter summarizes the challenges well in a recent NEJM piece:

The current organizational structure and information systems of health care delivery make it challenging to measure (and deliver) value. Thus, most providers fail to do so. Providers tend to measure only what they directly control in a particular intervention and what is easily measured, rather than what matters for outcomes. For example, current measures cover a single department (too narrow to be relevant to patients) or outcomes for a whole hospital, such as infection rates (too broad to be relevant to patients). Or they measure what is billed, even though current reimbursement practices are misaligned with value. Similarly, costs are measured for departments or billing units rather than for the full care cycle over which value is determined. Faulty organizational structure also helps explain why physicians fail to accept joint responsibility for outcomes, blaming lack of control over “outside” actors involved in care (even those in the same hospital) and patients' compliance.
http://www.nejm.org/doi/full/10.1056/NEJMp1011024

The other term which has ambiguous meaning is the word productivity. Within large integrated healthcare systems, productivity is measured by RVUs billed or collections per FTE. Obviously this is a reasonably good measure of value to the healthcare system in our current environment where providers are "paid per click". This idea of productivity may provide almost no information regarding actual value to patients. I suspect that Dr. Mark Midei was viewed as one of his hospital productivity "stars" right up until the day that he was indicted for Medicare fraud for placing stents in patients who did not need them. Productivity is defined as outpoint (outcomes) per worker per unit of time. From the hospitals perspective, the most readily measured output is the money coming in. More money coming in tracks with greater productivity from their perspective. It is hard to fathom that if money is coming in, there is little or no value being generated. That is why behaviors which appear to be outrageous in retrospect go on for so long. Who is going to pull the emergency stop cable on activities which which the only obvious elements is they are ridiculously lucrative? That they are wasteful and not productive is all a matter of perspective and the most readily measurable elements make them look very productive in real time.

So we are left with ambiguous language and a world where we are waiting for the financial phase shift in health care where we will rapidly go from productivity being viewed as doing as much activity as possible to doing as little as possible and remaining effective. How do you plan for such a transition? As one of my colleagues says, it is like planning to rewire the house with the electricity still live. Maybe it will be easier to simply build a new house or at least create a new wing with a separate fusebox?

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