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Saturday, March 26, 2011

The many faces of team building entities

This week I attended two distinctly different activities which on the surface had little in common, but upon further reflection had much in common. Earlier this week I attended the IHI conference on Ambulatory care in Dallas. I am particularly interested in data collection approaches which can facilitate improvement of care in the ambulatory setting, something which has lagged similar efforts in the inpatient environment.

I go to a variety of professional meetings and there is generally some degree of uniformity of focus and status of attendees. Basically most are physicians or PhD researchers.  This meeting was very different in that attendees represented a huge spectrum encompassing the entire spectrum of professions involved in health care, including Doctors, PhDs in all types of disciplines, RNs, nurse practitioners, social workers, administrators, CEOs, CFOs, and representatives from professional groups.

The message which unified all of these participants was clear; we are all committed to improve patient care and that taking care of patients is a team activity. The keynote addresses took on an evangelical characteristic, While I did not hear any amens or praise the Lord from the audience, if I had it would not have appeared particularly out of place. The audience was filled with true believers. While they might not have shared common training or done similar jobs, the audience shared a common belief set and most worshiped at the altar of safety, quality, and patient centered care. This belief set is a powerful motivator of team based activities in the health care environment and it serves to create operating units over the entire country and the world.

This weekend I attended a bar mitzvah at an orthodox Jewish Synagogue. It was the bar mitzvah of the son of a close friend, whose family had been associated with this congregation for many generations. The sanctuary was filled with worshipers who shared a common vision of their history and beliefs, linked by age old rituals. They came together to celebrate the coming of age of one of their own, much as their parents had done previously, and their parents prior to them.  This congregation is a long standing cohesive entity, a team which creates and maintains structures which serve people in the present, supports those who have served diligently in the past, and prepares those to serve in the future.

Motivating people to behave in ways which creates and supports a better life for more people is all about working together in teams.There is no right answer as to how best to do this but there can be little doubt that as the world gets more complex, the need for tools which facilitate the development and sustaining of teams will become more and not less important. While financial resources allow for certain things to happen, they do not guarantee them. There are only certain things that can be purchased.

Teams function best when tasks they take on require contributions from more than one person to succeed, that those involved have access to the tools they need to succeed, and when those involved have common beliefs regarding what they are trying to accomplish. I found it remarkable that these elements were shared between the IHI attendees and the attendees of the bar mitzvah.

Sunday, March 20, 2011

Creative destruction and enduring institutions

One of my colleagues once stated "You cannot have change if everything remains the same". While obvious, it does underscore a truth which is not often explicitly recognized. Change means that someones cheese will be moved and perhaps someone's ox will be gored.

There are alterations in technology and process which result in incremental changes in what we do or how we do what we do. They may represent improvements (or not) but these are not really innovations. True innovation invariably means we change what we are doing in some fundamental way. Innovations are by definition disruptive of someone or something. They may make some process simpler, faster, or cheaper which is a good thing for the public at large, but these "improvements" are always disruptive to someone or something which has profited from the previous, more expensive or difficult approaches.

What are the characteristics of enduring and unchanging entities? They could be perfect and require no change. That is unlikely. They could be entities which benefit from consistent incremental improvements where not disruptive innovations are needed. Although not as unlikely as the perfect institutions, history does not seem to be marked by many of these entities. No, it appears that everything can be the target of disruption from innovation.

At the simplest level, innovation can come from outside an entity or come from within. When an entity such as a business looks to the future, they can have many different perspectives. A start up does not care if it disrupts the current business environment. They likely can best survive by causing a reshuffling of the deck.  However, a successful business is much more risk averse since it likely views that any innovation that disrupts its profitable product lines should be viewed as a threat. Threats also can come from either internal or external sources. The reality is no matter whether the source is internal or external, it will be viewed as a threat. What this means is that for the most part, innovations which disrupt present business practices will not come from current successful players.

What does this mean for medicine? It is simple. Disruptive innovations which will change the health care delivery business will not come from mainstream health care delivery systems. We simply perceive that we have too much immediately at stake to want to disrupt our current business models. However, the most enduring institutions are ones that realize that they need to reinvent themselves on a regular basis, embarking upon creative destruction, in order to survive in the long run. Can we get past our fear of change to become the drivers of innovation or will we follow the common pattern of being displaced by innovation and change?

The tail wagging the dog

Participating in the practice of medicine requires that one get used to disconnects, situations which simply make no sense. If you become too concerned about these situations, one becomes simply paralyzed. Thus, we create complex filters which allow us to champion strong views about certain values while being completely oblivious to the inconsistencies in our world view.

In today's New York Times, there is a story by Emily Ramshaw about the state of Texas and the realization that they might be having a problem with over use of neonatal ICU (NICU) beds. Ms. Ramshaw reported that Dr. Frank Mazza, vice president and chief safety officer of Seton Family Hospitals, detailed how Seton Hospitals prohibited elective C-sections before 39 weeks in 2005. This move resulted in a dramatic drop in NICU admissions accompanied by a 96% drop in revenue from the NICU. Considering that the NICU is a major profit center for many hospitals, I doubt this type of move would be welcomed as a matter of course elsewhere. While we would hope that our health care institutions would always take a financial haircut when faced with this situation, it is more likely that the more likely course would be business as usual and continued assessment until the problem dropped off the radar.

While this particular episode can be viewed as a small win, there is a bigger picture which is not so uplifting. NICU growth throughout the country is not likely driven by patient need but by margin exploitation. This is not an isolated phenomena and limited to NICUs. It touches every specialty and permeates through both inpatient and out patient medicine. The provision of medical services is not driven by what the public wants or needs but by whatever margins happen to be favorably set by an artificial and arbitrary pricing structure.

I live in a medical world which exists mostly in the outpatient setting. Our services are in great demand and our operation cannot even come close to addressing all of the calls we get for appointments. Any reasonable business would collect data on who is calling and what type of service they are seeking, presumably to adjust their provider base to accommodate particular problems  where there is great public demand. In health care, we do not do this and I suspect there are at least two reasons. First, demand has been so high that we have had not reason to do "market research". Second, and perhaps more importantly, we are not particularly interested in what the public wants from us. We are more interested in filling our appointments with people who will be billed for high margin services.

In my clinic I have asked that simple question; Who is calling us and why? We do not know. I suspect if we knew, we might have to expand our ability to provide low or negative margin services for those who want appointments. The fact that we don't know protects us to some degree from being pressured into expanding into services which might erode our bottom line. Ignorance is bliss...sort of.

In true market based economies, providers of services are rewarded for knowing what the public wants and identifying where shortages exist. First to exploit such opportunities can charge premiums which provides an impetus for others to enter these markets. Overpriced services stimulate entry of other players which ultimately drives prices down, making services more affordable to everyone. Demand and supply are coordinated by price, but in order to do so, price needs to be able to move to send appropriate signals to both providers and consumers.

In health care, price is basically fixed. If the price is fixed too high, it prompts providers to pile into these markets, create demand where it might not exist, and deploy technology and services where the real beneficiaries are the health system and not the patient. Where prices are set too low, services become scarce but because information collection is so poor, it is difficult to impossible to know what is actually scarce. Thus you end up with health systems marketing high end services which may be of little or no value to patients while simultaneously being unable to meet the bulk of the demand for services that patients actually want and need.

What it boils down to is the only mechanism which has been demonstrated to allow for a reasonable match between consumer needs and supply is the price coordinated market economy. Schemes based upon administrative pricing always fail because they send incorrect information to producers and consumers. The incorrect prices will ultimately be discovered but only after they have caused much harm to the public by those chasing high margins or fleeing low margins.

Before there is a hue and cry about the money grubbing physicians and hospitals and their margin seeking behavior, realize that ultimately this is not about a choice, it is about survival. Principled institutions which stick to money losing approaches ultimately cease to exist. That does no one any good. This is not about good and bad people or good and bad institutions. It is about bad rules which prompt people and institutions to do activities which do not serve the public.

Sunday, March 13, 2011

Familiar vs. unfamiliar random events

I ventured out this morning and the day was glorious. The sun was out, the temperature was in the mid 60's before noon, and the flowers were blooming. I could not help to reflect at how my circumstances could not be any more different from those in Northern Japan. No place could be more suited to be prepared from this disaster. The Japanese have likely engineered their country to withstand earthquakes better than any county in the world. Their country cultivates team and non-self focused activities perhaps to a greater degree than any other place in the developed world. Yet, the devastation is amazing. We can't help but be taken aback.

How can I experience such a glorious day while at the same time there is such devastation of my friends across the globe? It is just so random!

Randomness like this grabs our attention, but we in the medical profession see this type of random bad luck every day. When a patient is referred to me for devastating illness of no fault of their own, they generally ask me why this has happened to them. While sometimes it is the product of bad decisions on their part, more often than not it is just the fact they won the wrong lottery.

While the scale of visible destruction in Japan draws attention to the effects of random back luck, the aggregate effects of illness as a consequence of bad luck in health dwarfs these intermittent and dramatic events. Within our health care world, we tend to see these unfortunate events one at a time and we are quite capable of walling off their impact on us. In some sense that is a good thing but in other respects it has pernicious effects. Were we to be devastated by every encounter with a patient impacted by illness, we could not be effective in our role as a health care professional. However, the crisis environment does tend to bring people together in ways that non-crisis circumstances do not.  Internal motivations driving people to serve others tend to generate more durable bonds that those based upon mercenary relationships.  Perhaps that is why things may need to come unglued before people can effectively work together.

Facing tough decisions

There is a remarkable story in today's Sunday NYT detailing problems with the New York State program of homes run to house developmentally disabled persons. (
It is both shocking and yet not unexpected, given the long history of how these environments tend to attract those who prey upon the weak and helpless. There are a number of elements of this story which perhaps are instructional for many other environments.

One particular thrust of the story is the role of the public employees union in preventing particularly abusive employees from being held accountable for their egregious behavior. While these organizations may make it more difficult to hold state employees accountable, I think there is a more fundamental issue which is at play which operates in the presence or absence of institutions like unions which may shelter members from accountability.

My experience in various workplaces leads me to believe that most people want to have nothing to do with holding others accountable for their actions. Holding people accountable means having to stop what you are doing and investing a substantial amount of time and effort to an endeavor where you derive no immediate gain and perhaps no personal gain whatsoever. Even if your particular work environment has created tools to facilitate the process, the time and effort to document and respond to incompetence is substantial. Look at the events leading up to the Fort Hood shooter's killing spree. Dr. Hasan was recognized informally by his peers as being a incompetent and possibly a radicalized but no one put a stop to his rise through the ranks. To do so required a commitment which could not be justified by any single individual at any single moment of time. He kept getting passed on to the next level because the immediate cost associated with not doing so was sufficient to discourage those involved from responding.

For the most part, not holding people accountable does not lead to spectacularly bad outcomes. In the short term nothing much happens. It slowly undermines workplace morale and cohesiveness of operating units. No single episode of incompetence or or outrageous behavior generally takes down the enterprise and survival from any given episode tends to reinforce the avoidance behavior.  Taking on incompetence requires time, tools for assessment of performance, and a willingness to experience pain in the form of difficult personal encounters.  Those whose positions are impacted will fight very hard to protect their turf while few others are so vested in taking on such fights. Economists view these circumstances as non-Pareto equilibrium. They are not desirable but when no parties have an incentive to make dramatic change, change does not happen. Until there is some terrible event which thrusts responsible parties into the spotlight, organizations tend to limp along.  Then everyone asks how this could happen! Action tends to be prompted by back outcomes in the spotlight. It is too bad that transparency tends to require bad outcomes to operate.

Within the realm of health care, we are also facing difficult decisions.  Within the health care field, we have similar issues with holding ourselves accountable. Long standing dubious practices and a culture of financial gaming continue relatively uncriticized because the revenues are needed to make the expensive health care enterprise work. Who in their right mind would want to take this on except in the circumstances where some whistle-blower windfall was involved?   However, the health of any enterprise is ultimately dependent upon creation of an environment where leaders have incentives to take on these challenges. You have to ask, where will those leaders come from and what reasons will we give them to take on the tough challenges which require them to confront their peers?

Friday, March 11, 2011

Threading the needle

It is hard to actually assess the pace of change in health care. We tend to focus on issues such as technological change in the form of new drugs or devices. Some of these agents change the diagnostic or therapeutic paradigm for selected patient populations while many add little value to patients while driving costs higher. We also note that health care has become much like airline travel, both being increasingly just commodities.

However much we think health care has changed, I am convinced we have seen nothing compared to the transformation we are likely to see in the next decade. I am always leery about putting timetables to predictions, particularly to changes anticipated in the health care environment. I recall my mentors making dire predictions over 30 years ago regarding the economics of health care, many of which I believe were spot on, just in the wrong time frames.

Whether state driven health care reform is the primary driver or not, payment reform is going to change the business of health care in a fundamental way and I predict it will happen soon. How it plays out is where it will get very interesting because it will involve a more fundamental change in what health care providers are incentivized to do. At this point in time, most physicians (who do most of the provider billing) are paid for activity. Whether through their own small businesses or via corporate incentive programs, the mantra is do more and get paid more. At my own institution, we tally both dollars and RVUs and benchmark them against other similar practitioners. The biggest RVU pop is when we do procedural things to our patients and bill for these things. What is not counted is counselling, reflection, and prudent non-intervention. Such "worthless"  activities don't pay the bills.

There is a great deal of talk about how we will adapt to a world where we will be held accountable for efficiency, that being health outcomes per dollar spent. We are still in the talk stage. My incentive program for the coming year is still based upon keeping the click rate up. I realize if we are to stop exploding health care costs, this will need to change. Outside of the increasingly isolated MD community, there is a growing consensus that continued growth of health care costs is at odds with the financial health and stability of the country.

It is a challenge to even think about how we adapt to circumstances where our rainmakers become the source of our worst financial hemorrhaging. Much of health care is a capital intensive and low margin business. In this world, small changes in payments induce huge changes in the bottom line and big bets made at one time where the fundamentals looked good can quickly turn into really bad bets. The push now is to consolidate, grab market share, and optimize your position to build lean and focused shops. To survive in a not paid by the click world, those who will be employed by these entities will need to be salaried and their success will be measured by how well they husband resources, not by how much they do. I would hope that there will be some sort of patient outcome which can be measured as well.  I suspect that there will be a rapid transition from billing/collections as a measure to dollars spent. However, I simply cannot figure out how this transition happens?

Will we thread the needle and have a bumpy but bloodless transition, or will there be a blood bath? I suspect the latter. One option is to say no to the third party payment model.   For major players with substantial sunk costs in buildings and equipment, and business models based upon expensive interventions that few patients can pay, saying no to insurance will not be an option. They will simply have to cut costs and re-engineer how they do business or die, and many will die. Many physicians are fleeing to the safety of large health care networks and seeking employee status. This might give them brief refuge but the corporate world is not notable for safety and guaranteed employment. When big companies which cannot raise prices start to lose money, they lay off people, the most expensive ones first.

I also think that those who can practice in a low overhead environment independent or semi-independent of insurance will increasingly take the risk and derive payment from those who receive services. There are lots of models out there now such as SimpleCare ( or a variety of concierge care options. I think this is where the action will be. This will be where creative destruction will give rise to the future of health care, where entrepreneurial ambitions will play out. They will build a patient responsive industry because they will derive their resources directly from patients.

Many megahealth care entities will simply not make it. No one in the middle portion of the 20th century could imagine that the great industrial enterprises in Detroit, Cleveland, and Buffalo would be abandoned as rusted hulks by the end of the 20th century. Those industries who survived in the US became lean, focused, and efficient, and competed successfully by delivering value. It is a lesson well worth learning.

Thursday, March 10, 2011

1 in 250

An interesting post worth reading:

Marketing vs. Education

Do health care services really need to be marketed to the public? Patients might benefit from educational outreach efforts if they are not availing themselves of services which may enhance the length or quality of their lives. That is a given. However, when the message is self serving, what sort of disclaimers need to be made. Furthermore, whose domain should the educational efforts reside in and which parties should be the drivers and who should vet the materials? What is the difference between educational and marketing materials?

Are materials from "non-profit" entities more likely to be educational than materials from for profit entities such as pharmaceutical companies or for-profit hospitals?

Let's look at a few actual scenarios. I browsed the web, looking at the nature of patient educational materials.What do the "educational" materials say to patients about screening mammography? In my non-scientific but random discovery of Web based resources, I came upon the the the University of Colorado Imaging Services and their patient educational materials. ( There under the labeling of patient educational materials are the the following recommendations:
Talk to your caregiver about mammograms and when you should have them. The American Cancer Society suggests the following:
  • All women 40 years and older should have a mammogram each year.
  • Younger women who are at high risk for getting breast cancer should talk to a caregiver about mammograms.
The next two sites at UPMC and UCSF relayed the identical message.   (  and
Note there was no mention of the possible downside to undergoing the test, something that you might expect to find in educational materials. The exception to this is the University of Wisconsin which actually presents both sides of the story ( along with a Q&A( dated in 2009, albeit it is buried in the News section and unlinked to the patient education page. They briefly mention risks but discuss only the risks of radiation.

Contrast this to the NCI which includes additional information regarding things such as potential harms from mammography, presenting concepts such as false positives and false negative test. This site provides educational materials. The other sites present essentially marketing materials dressed up as educational materials. Kudos also to Wake Medicine which provided a nuanced and understandable patient educational materials.

The difference between the the UCol/UPMC/UCSF sites and the NCI site is that the former represent marketing tools, not educational tools. The former sites provide no reason for patient not to decide to commit to annual mammograms after age 40. Given how controversial the recent mammography data and discussions have been among experts, any balanced educational presentation should provide some recognition that it is reasonable for selected patients to elect less aggressive screening. An argument could be made that this sort of nuance is presented to patients face to face by their care providers. However, I doubt this happens on a consistent basis. It is just easier to keep feeding the machine.