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Health Care Reform: View from the Top

With health care reform under way, employers and consumers are increasingly concerned about the value their health care provider is delivering.

With that in mind, the San Diego Business Journal asked top executives of major health care organizations three questions about the changing health care industry. Their answers are listed in alphabetical order by the name of their organization.

1. From your perspective, how is the business of running a hospital different today than it was a decade ago?

Mary Ann Barnes, senior vice president and executive director, Kaiser Permanente San Diego:

From aging baby boomers to skyrocketing premiums and prescription costs, the health care industry has faced its share of challenges in the past ten years. Two areas that really stand out: the move toward integration, and the advancement of the automated medical record. Fortunately, Kaiser Permanente is – and always has been – a truly integrated health care delivery system. We are not just a health insurer, not just a hospital system, and not just a physician group. Kaiser Permanente is all three. Through integration of all vital health care functions, health care organizations are able to achieve remarkable strengths, and synergies that set them apart in terms of quality and efficiency from the fragmented, fee-for-service, non-systematic world of the majority of health care organizations today. Second, automated medical records have become an essential part of providing the highest quality care possible. Our investment in Kaiser Permanente HealthConnect has significantly improved the way our physicians deliver – and our members receive – care. KP HealthConnect is one of the most advanced electronic health records available today. It securely connects 8.8 million people to their health care teams, their personal information, and the latest medical knowledge, leveraging the integrated approaches to health care available. We believe connectivity in an integrated system is the game changer for maintaining wellness, and for improving care.

Michael Covert, president and CEO, Palomar Pomerado Health:

I believe that the significant change in our operations from 10 years ago revolves around our increased emphasis on patient safety and patient centric care.

We have developed a heightened awareness and in turn a very aggressive approach to creating an environment and processes that improve the well-being of our patients. Whether that be in regard to the systems we put into place; the equipment we use; the communications and information provided for staff in management of care and the active “laying on of hands.” Further, we have focused on our transparency of the results of the efforts so that we learn from errors that occur and enhance our teaching of staff and are more focused and accountable for our actions.

We have developed a heightened concentration of the importance of what the patient needs versus what staff need both in the clinical arena as well as in the customer service/business side of our operations.

Expectations are much greater on the part of patients and their families and we recognize the importance of responding to and anticipating their requirements. They do have options on where they choose to seek care and we need to be able to meet their needs in the competitive environment.

Neerav Jadeja, hospital administrator, Paradise Valley Hospital, part of the Prime HealthCare System:

The business of running a hospital is more closely monitored than the past as it relates to financial impact. Reimbursement to hospitals has dramatically declined. Today, recovery audit contractors by the Centers for Medicare & Medicaid Services (CMS), core measures and Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) scores all impact reimbursement.

Each of these programs has different requirements and timelines for data collection, measurement, reporting and submission—which were challenges not faced by hospitals in the ‘90s.

The recession also has had a tremendous impact on hospitals in the last few years—with less access to capital being one of the more significant.

Kathleen Sellick, president and CEO, Rady Children’s Hospital-San Diego:

Years ago, we had a bit more stability when it came to funding sources and reimbursement. The system certainly was not perfect, but it was more predictable. Today, hospitals are faced with financial challenges on two fronts: reimbursement cuts and new payment models resulting from the advent of healthcare reform. As we prepare for reform, we continue to focus on quality and cost-effective care, while ensuring that we are nimble enough to respond to new challenges.

Chris Van Gorder, president and CEO, Scripps Health:

I think going forward things are going to be very different. The new reality is that there will be larger, more integrated systems instead of stand-alone small and medium hospitals. That push for integration will extend to engaging physicians more as partners than in the past. At Scripps, we’re aligning with our doctors through physician co-management and physician leadership in medical management. There will be a shift from an acute-care focus to non-acute and to managing patients’ care beyond the hospital setting. Hospitals will go from a largely fee for service payment model to a whole variety of other payment models. Government reimbursements are threatened. Industry-wide, pricing will be pushed downward.

These are challenging times, but I’m actually very bullish on the future of health care. The changes taking place will lead to a better overall health care value for our patients.

Mike Murphy, president and CEO, Sharp HealthCare:

Compared to a decade ago, the level of uncertainty and the challenges of planning for the long term are significantly more difficult today when it comes to running a hospital or health system.  Some of the more significant challenges currently include:  health care reform and its evolution between now and 2016; significant budget issues at the state and federal levels; unknown impact of the forthcoming Debt Ceiling Commission proposals; and sustained negative economic performance and resulting pressures on businesses and investments, including access to capital, all of which affect businesses across the spectrum, not just health care organizations.

Sharp, as an integrated health care system, is comprised of not only hospitals, but also affiliated physicians and medical groups, outpatient care centers, skilled nursing, home health and hospice services, and our own commercial insurance company. We have operated under this model since the mid-1980s, which puts us in a better position to manage the continuing evolution of our nation’s health care system, which appears to be moving toward more integration among all key players.  Health systems are becoming more focused on enhancing integration with physicians across the entire continuum of care, improving coordination of care and engaging patients more in their health care, especially those with chronic conditions such as congestive heart failure, pulmonary disease, diabetes, behavioral health and obesity to name a few, to reduce costs while improving quality of care.

Thomas E. Jackiewicz, CEO, UC San Diego Health System:

I think there’s a consensus that there’s a lot more uncertainty in the marketplace today due to new laws and shifting political grounds. Fortunately, what’s different now, and almost immune to these conditions, is that we have access to groundbreaking technologies — everything from cloud computing to telemedicine and nanotechnology — that are going to transform how we deliver care and conduct research. Combine this with the fact that the nation is getting older and will need more access to essential health services, often for chronic diseases such as diabetes and Alzheimer’s.

Hospitals today need to figure out how to manage and care for these patients at the same time that the needed resources appear to be shrinking. For providers at UC San Diego Health System, efficiency will be critical. We need to be cost-effective and still produce the highest quality care. We’ll do what we need to do to meet that goal. It’s a challenging environment, but one that sparks innovation at UCSD.

2. “Improve quality and lower costs” is the buzz phrase in health care today. How is it possible to accomplish both at the same time?

Mary Ann Barnes, Kaiser Permanente San Diego:

Improving outcomes and lowering costs is possible with an integrated, team-based model of care delivery – supported by the right technology. Kaiser Permanente’s approach is fueled by a unique high-performance partnership between our physicians, health plan, and hospitals. It is supported though our automated medical record, Kaiser Permanente HealthConnect. Our common goal is to provide the best possible care for the patient, affordably. Our systems and people are all aligned in that way – with the patient’s well-being and care as the center of focus.

Michael Covert, Palomar Pomerado Health:

I have always believed that if an organization’s quality of care and service is excellent, then the “bucks” will follow. The key is our ability to develop effective, efficient and consistent processes and practices; and follow-through in measuring outcomes of delivery of care whether this be in the inpatient or outpatient setting. Too often, we don’t build in that infrastructure so we know what our costs are and whether we are doing a good job of using our resources to maximize care.

We have many efforts in place at PPH and look at our use of staff, supplies, equipment, facilities, etc. so that we are not taking 10 steps for every two we need to take; that we are not duplicating efforts or staff time wasting use of such; that we are getting the best values for the supplies, equipment used, etc. We have, as a result, achieved significant savings that we can put back into our people who are the most important resource we have.

It is important for us to have good data and information so that we can anticipate risks in the delivery of care in order to minimize them and in turn reduce the high cost of care that result from such and that don’t improve patient outcome.

Neerav Jadeja, Paradise Valley Hospital, part of the Prime HealthCare System:

It is important to maintain a high-quality, cost-effective hospital. In order to do this, facilities need to focus on their core measures, patient safety goals and infection control practices. Improving the quality of care will actually lower costs because hospitals will perform more efficiently, and less resources equal reduced costs.

Kathleen Sellick, Rady Children’s Hospital-San Diego:

Often times, quality improvements will result in lower costs. Quality initiatives focus on removing waste, streamlining systems and reducing error. The challenge for the future will likely require that we expand our effort to focus on improvements across the continuum of care, and outpatient, hospital and home care.

Chris Van Gorder, Scripps Health:

It’s very possible – and we’re doing it now at Scripps by strategically eliminating non-value-added variation. We recently reorganized to a horizontal management structure that has us operating not as a collection of separate hospitals, but as an integrated health system – One Scripps, we call it. As such, we’ve been looking across the entire system to identify best practices and implement them system-wide. We’ve identified $150 million in cost-savings opportunities, and will be improving quality at the same time. One great example of this is pharmacy. We saved $8 million in fiscal year 2010 by creating new organizational structures to identify and cut variation among our hospital pharmacies and centralized purchasing to maximize discounts. Standardizing our processes has improved quality, and all five Scripps hospital pharmacies now rank in the top 13 percent in California in safety compliance. Ongoing investments in technology aim to further improve safety – and contribute a potential return on investment of $3 million annually.

Mike Murphy, Sharp HealthCare:

As noted above, it is a model that moves in the direction of closer integration among all care providers across the continuum of care, from birth, to ambulatory care, inpatient acute care, mental health and behavioral care, skilled nursing, home health, palliative and hospice care, etc. It is a model that significantly integrates the physicians across the continuum (primary care with all the specialties), enhances integration with hospitals and other points of entry in the system, significantly enhances the movement of patient and provider data across the full continuum for improved care management and engagement, resulting in a process that better engages patients in their health.

It is a system that will continue to evolve away from a fee-for-service model to a payment-for-outcomes model (improved health outcomes, better chronic care management, reduced complications and readmissions, etc.).

Thomas E. Jackiewicz, UC San Diego Health System:

A big key is information technology, which has really improved and expanded in recent years in health care. We’ve invested seriously in IT. Our hospitals are ranked the “most wireless” in the nation. We were recently honored by HIMSS Analytics, a nationwide system that tracks electronic medical records progress in hospitals and health systems, with the prestigious Stage 7 award. These things reflect our determination to share information fast and efficiently, and manage care in real time.

That has tangible benefits for patients. For example, in the UC San Diego Health System, patients can use a secure online service called MyChart to review their health histories, see test results quickly, send messages to doctors and schedule appointments.

More broadly, San Diego is one of only a handful of communities involved in the federally funded Beacon Communities program, which seeks to improve patient care, safety and efficiency by deepening communication among all health care providers in a region. We’re collaborating with partners throughout the county, breaking down silos so that doctors and institutions can more freely talk about how best to treat their patients. It’s all about improved health care everywhere.

3. How will the patient experience at hospitals change over the next several years as health care reforms take hold?

Mary Ann Barnes, Kaiser Permanente San Diego:

Consumers have the opportunity to become more involved in their health care choices. There will be more health care options than ever before, and more data to support decisions about health care. Knowledge is power. Patients will increasingly have the opportunity make choices based on both service and quality measures, as well as wellness and prevention measures. The patient experience will be one of engagement, dialog, and choice. Successful health care organizations have already realized that the traditional method of providing care – non-integrated, “sick care” – is not sufficient. As we move toward the implementation of health care reform, organizations that focus on wellness and prevention, that integrate services under one roof, that use innovative technology to support physicians and patients, and that provide data to demonstrate quality outcomes will ultimately succeed.

Michael Covert, Palomar Pomerado Health:

The patient’s experience in the hospital setting will markedly change in the future. First, we in the hospital setting will focus our efforts around the patient directly rather than the patient responding to the way our staff desires to practice. That will be a major shift in thinking for most hospitals.

Second, we will involve our patients more in the actual care delivery process and the decisions made regarding their desires and needs.

Third, patients will be given greater access to information “real-time” in an era of transparency as to what we are trying to do on their behalf.

Fourth, customer service in the traditional sense that one might experience at any five star hotel will be the order of the day. Patients and their families will have greater choices on where to go for their care and they will experience that option to go elsewhere, if care and service is not excellent.

Neerav Jadeja, Paradise Valley Hospital, part of the Prime HealthCare System:

The positive patient experience will be more important than ever before. As an administrator, I round on patients daily to see how their experience has been at Paradise Valley Hospital. I solicit feedback on how we can continue to improve and provide a higher level of customer service. In the next several years, you will see more hospitals do the same, as well as adding patient care representatives to ensure the patients have an excellent experience in the hospitals.

Kathleen Sellick, Rady Children’s Hospital-San Diego:

Patients and families may experience changes that relate to the overarching goals of healthcare reform, which are to increase access, lower costs and increase the quality of patient care. With regard to access, when millions of uninsured Americans enter the market in 2014, patients and families may experience challenges getting health care services in a timely manner.

These changes could range from new ways to address emergency room overcrowding, intake procedures based on the severity of care needed and processes to more efficiently use hospital inpatient services. Lower costs will likely mean establishing hospital reimbursement based on achieving certain quality measures related to specific clinical conditions as well as efficiency metrics, readmission rates and measurement of patient satisfaction.

Chris Van Gorder, Scripps Health:

I believe it will get better as health systems become more patient-centric. There are elements of health care reform encouraging that approach, such as the focus on reduced readmissions. Traditionally, hospitals have viewed patient care as over when that patient leaves the hospital. At Scripps we’re implementing new approaches in care management that involve patient navigators assigned to a patient during their stay and for 30 days after their discharge. And it’s working. As an example, we recently cared for a high risk patient who last year had been readmitted 14 times. Through this new care approach, his patient navigator learned he wasn’t taking his medications once he left the hospital because he couldn’t afford them. We were then able to connect him with resources to help.

Another patient-centric program was our ED redesign. We recently changed our care processes and brought patient wait times down to 30 minutes or less. Our doctors, staff and, of course, our patients are pleased.

I think the future holds more positive changes like these for patients.

Mike Murphy, Sharp HealthCare:

This is certainly yet to be defined as health care reform unfolds. While aspects of care and coordination will change with the hospital, if this model is to be successful it cannot be silo-based around what hospitals will do, what physicians will do, what skilled nursing facilities will do, and what will patients do, but more about how we will all collectively change to eliminate the silos and actively manage care with significant improvement in prevention, wellness, and coordination of care along the entire continuum.

I believe the intention and desire is to have patients more actively engaged with their health care providers. That is, to have patients engaged with an organized group of providers who know them, have their health information and who are able to coordinate the care along the full continuum within a health system.  The system will need to be able to share patient information among the providers to ensure this enhanced coordination of care significantly improves the active engagement of patients with their health and, most significantly, engages those with chronic conditions in their care management.

Thomas E. Jackiewicz, UC San Diego Health System:

I think patient experience will be the big driver. The emphasis will be on providing the best service, quality and cost to not just the patient, but to his or her family. We will want everybody to go home healthy and happy, confident that they have received the best care possible.

That mission includes everybody, including hospital leaders here who conduct “Caring Rounds” each week in which they personally visit with patients to ask about their hospital experience.

One of the visions for the new 245-bed Jacobs Medical Center, which opens in 2016, is to equip every room with smart screens. The idea is to take telemedicine even further. In these “smart rooms,” a patient would have access not just to our top doctors, but to specialists anywhere, who could be called in to interact and consult virtually. The goal is to leverage the best medical expertise throughout the world for the benefit of San Diegans.

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