10 tactics for physician-led total cost evaluation
April 23, 2012
About the White Paper
See how one medical center quickly created a transparent market for cardiovascular supplies, realizing 12% in savings across 30 categories and satisfying physicians’ clinical preferences.
Mayhew Medical Center (pseudonym), an 800-bed academic medical center, used our service to manage sourcing for 1,300 supply items, representing $16 million in annual spend, for their award-winning cardiovascular service line.
Items sourced spanned 30 categories and included cardiac rhythm supplies, coronary stents, interventional radiology supplies, and vascular surgery supplies. Mayhew was already a top performer on supply costs—benchmarked in the top decile for cost for this selection of supplies—but initial work with Strategic Sourcing Management uncovered significant opportunity.
Physician engagement leads to rapid savings
Mayhew’s physicians, like many, held strong preferences for incumbent suppliers. By working with Strategic Sourcing Management, Mayhew was able to engage its physicians throughout the event, understand the drivers of their clinical preferences, and uncover opportunities to improve pricing on preferred items or shift market share where acceptable.
Strategic Sourcing Management staff created competition anew, even in this mature market, and secured savings of 8% on already-low-priced incumbent-supplied items. Physicians, able to weigh the total cost of clinical supplies, agreed to select market share shifts on some items, securing 42% savings on non-incumbent awards.
Mayhew’s final awards achieved savings of $1.85 million—or 11.7% of annual spend—and satisfied their physicians’ clinical preferences.
What is Strategic Sourcing Management?
Strategic Sourcing Management is a new fully managed Advisory Board service offering game-changing technology and wrap-around expert support. We gather items from many categories into a single sourcing event and help suppliers bring their best offer by supporting complex bid strategies with rapid feedback.
Our team works closely with physicians to evaluate the total cost of offers, weighing their preferences along with price. Vendors gain insight about true value drivers, enabling creative (and aggressive) offers previously undiscovered with traditional sourcing strategies.
For more information, please contact Jana Petersen at PeterseJ@advisory.com or 202-266-6242. Please note, a valid hospital email address is required to access the research.
What managers can learn from Steve Jobs
Jobs biographer outlines 14 leadership lessons of the former Apple CEO
March 23, 2012
Writing in the Harvard Business Review, Steve Jobs biographer Walter Isaacson outlines the Apple visionary's employee engagement strategies and tackles questions about his rough management style.
Although Jobs has been criticized for his tendency to be rude to people on both a personal and professional level, Isaacson writes that the CEO's "petulance and impatience were part and parcel of his perfectionism" and "integral to his way of doing business."
Isaacson notes that Jobs could not have built a company with one of the most hardworking management teams in the country had he been too difficult to work with. Instead, he pushed his workers to do the "unimaginable."
In the article, Isaacson offers 14 tips on how to be a good manager and inspire employees as Jobs did, including simplifying products and putting them before profits, assuming responsibility from end to end, tolerating only "A" players, focusing on a few quality products, and bending reality.
For example, when Jobs and a small team designed the original Macintosh in the 1980s, he never spoke of profits or cost trade-offs, saying he only wanted to make the computer "insanely great."
Jobs later said, "[T]he products, not the profits, were the motivation," adding, "It's a subtle difference, but it ends up meaning everything—the people you hire, who gets promoted, what you discuss in meetings."
In addition, Isaacson writes that Jobs used his "Reality Distortion Field" to motivate employees to achieve seemingly unattainable goals. For instance, Jobs once pushed an engineer to accelerate a Macintosh's boot-up time, even after the employee explained why it would be impossible. In response, Jobs asked, "If it would save a person's life, could you find a way to shave 10 seconds off?" and calculated the overall time spent waiting for Macs to start up around the world every year. Within a few weeks, the engineer reduced the boot-up time by 28 seconds.
Although Jobs found success in a rough management style, Isaacson warns managers not to adopt rude or aggressive behavior to emulate him. "It's important to appreciate that Jobs's rudeness and roughness were accompanied by an ability to be inspirational," Isaacson writes, noting that the Apple executive team was more loyal to the company than staff at rival firms.
"I've learned over the years that when you have really good people, you don't have to baby them," Jobs told Isaacson. "By expecting them to do great things, you can get them to do great things" (Isaacson, Harvard Business Review, April 2012; Bilton, "Bits," New York Times, 3/20).
Does scripting patient care go too far? Some nurses say yes
Hospitals say standard communication outlines provide foundation for interactions
March 23, 2012
In an effort to boost satisfaction scores, hospitals increasingly are asking nurses to use scripts in their interactions with patients, but some nurses say the strategy goes too far.
Hospitals take cues from entertainment industry
To prepare for value-based purchasing, hospitals have adopted various satisfaction strategies and customer relations models from other industries, including the entertainment and restaurant sectors.
For example, Lawrence General Hospital in Massachusetts requires nurses to wear laminated cards that hang around their necks that suggest phrases each nurse should use at the end of a patient visit. Meanwhile, at Baystate Franklin Medical Center in Greenfield, Mass., nurses are asked to use a patient's name at least three times during each shift.
Hospital executives say using "key words at key times" can help patients feel more comfortable and less anxious, which supports healing. In addition, consultants say research indicates that patients are more satisfied with care when they feel that nurses made time for them.
Nurses express concern over standardized interactions
Some nurses argue that providing communication outlines for patient care goes too far, the Boston Globe reports. For example, medical-surgical nurse Ann Lewin said scripts make her feel like a "Stepford nurse," noting that patients could notice that nurses use the same phrases.
However, Lawrence General CNO Elizabeth Hale said their communication tips are intended to provide "a foundation" for nurse-patient interactions. She noted that it is "important to provide standard language as a way to ensure that introducing oneself, for example, becomes hardwired into our communication" (Kowalczyk, Globe, 3/21).
Next challenge for IBM’s Watson: Cancer care
N.Y. hospital to train supercomputer
March 23, 2012
IBM's Watson will continue its medical training with a residency at New York's Memorial Sloan-Kettering Cancer Center, which will update the supercomputer's vast database with the latest oncology research.
To strengthen Watson's capabilities as a medical resource, researchers will feed it information from textbooks, medical journals, and individual electronic health records (EHRs), with patient permission.
The EHRs provided to Watson will come from Sloan-Kettering patients and contain physicians' plain-language notations. Sloan-Kettering staff and IBM also prepared a video of how the collaboration will work.
Larry Norton, deputy chief for breast cancer programs at Sloan-Kettering, said the notations will add "wisdom" to the computer's grasp of scientific literature. He said, "Because of our size and experience, we have super-specialized physicians in every field of cancer. And all of what they actually do is capturable in the language of our electronic medical records."
After inputting the oncology data, researchers will test Watson's knowledge using complex cancer care scenarios. The supercomputer also will be assessed by an advisory board.
Using Watson for cancer care
Martin Kohn, chief medical scientist at IBM, said Watson's oncology training process is expected to be lengthy. He noted that cancer patients might not benefit from Watson's oncology training until the end of 2013.
After the completion of the oncology training, Watson should be able to quickly recommend cancer diagnoses and provide treatment options, Kohn said (AP/Washington Post, 3/22; Jinks, Bloomberg, 3/22).
What health care has lost—and gained—since the 1960s
From 'Mad Men' to women MDs
March 22, 2012
Dan Diamond, Managing Editor
Imagine a time before Medicare.
- When surgeons threw instruments with impunity—though you'd never see it on TV, because the American Medical Association approved all scripts.
- When nearly half of adult Americans smoked, but just one in nine were obese.
- When doctors might admit patients to a hospital as a personal favor to a family.
Essentially, you're imagining the early 1960s.
"And you have to understand—it was a simpler time," says E'Louise Ondash, who began her nursing career in 1964.
A look back
In many ways, health care's improved since those days. We've made dramatic strides in treating disease; the workforce has grown steadily more diverse; some bad personal habits, like smoking, have been drastically curtailed.
But Ondash and other older providers also lament what's been lost since the 1960s: Blissful ignorance of health costs. A sense of connection with patients.
In line with the award-winning TV drama "Mad Men"—which is set in the 1960s and returns on Sunday night—the Daily Briefing is offering a special two-day look, through interviews and data, on how health care's changed across the past five decades.
Click to expand the poster. (And then click the upper-right corner button to make it full-screen).
The shadow of the Vietnam War
One major difference between then and now: Young physicians in the 1960s had to contend with the possibility of military service, which changed the course of many careers.
In order to staff up the armed services' medical branch, the government had introduced a doctors' draft, better known as the "Berry Plan." The plan offered physicians flexibility as they finished their internships: proactively join the service of their choice and get full residency training in a specialty of their choice, too, or take their chances with the selective service draft.
But not all physicians chose the Berry Plan, or even had the option of taking it. Dr. Donald Trunkey had an extremely low draft number, which meant he faced a stark decision when finishing his internship at University of Oregon Medical School in 1964.
"I got a letter from the government offering two choices—join the army and become a captain, or get drafted and be a private," Trunkey told the Briefing. "It wasn't a hard choice!"
Trunkey ended up working in Germany, serving two years in a dispensary on army base. The relatively staid experience was a lesson for Trunkey: he didn't want to do primary care. Instead, Trunkey would go on to a long career in surgery at Oregon Health & Science University, where he remains today.
But military service did offer some immediate perks. Trunkey's salary jumped from $125 per month as an intern to $2,500 per month as a captain. When he mustered out, Trunkey still received $300 per month from the government, which supplemented his salary as a resident at University of California-San Francisco.
Start of nursing's evolution
Some elements of nursing in the 1960s would be familiar today. There was a widespread nursing shortage, forcing new tactics for recruitment and retention. Nurse leaders were also beginning to develop a new theoretical base for nursing practice, Maryann Fralic told the Briefing.
(Fralic, a longtime adviser to the Nursing Executive Center, is in Boston this week to receive a lifetime achievement award from the American Organization of Nurse Executives.)
But the RN-MD relationship was staggeringly different. In the early 1960s, "nurses were treated as handmaidens of physicians," Ondash told the Briefing. "The [doctors] gave orders and nurses carried them out," with no questions.
Or to be more specific: nurses that had questions tended to keep quiet. With no formal avenues to report a physician's behavior, nurses who spoke up often faced reprisal.
For example, Ondash once expressed her concerns that a doctor was ordering too many interventions for a patient who was suffering terminal kidney failure, before the advent of dialysis. As a result of her comments, "that doctor laid into me...[and] I got in trouble," she said.
And who could Ondash go to for support? Not a nursing union—because she wasn't even aware of unions' existence yet.
In tomorrow's issue: How care has changed since the 1960s, for better and worse.
IOM: Most U.S. health systems unprepared for catastrophe
Report outlines framework for disaster planning
March 23, 2012
The Institute of Medicine (IOM) this week released a report outlining how hospitals and other health providers can effectively deliver care during a major natural disaster.
The report—which is the second phase of a study to develop crisis standards after the H1N1 outbreak—suggests allocating resources and delivering care using a systems-based approach during catastrophes, like earthquakes and widespread disease outbreaks. The report offers a framework for action plans during such events and provides detailed standards for different organizational groups.
The report builds on an earlier IOM report that listed five crisis standards of care, including a strong ethical grounding, community and provider engagement, the ability to implement standards, clear triggers and responsibilities, and evidence-based clinical processes.
For example, the current report lists action triggers such as critical infrastructure disruption and failure of contingency surge capacity. Under the clinical process crisis standard, IOM in the new report lists resource management coordination, resource-sparing strategies, and consistent application of crisis standards.
Only a few U.S. communities are equipped to handle catastrophic disasters, the report said, noting that "even prepared communities can be overwhelmed."
"When a truly catastrophic event occurs, the nation's health system will be under enormous stress," said report committee chair Lawrence Gostin. "Health professionals can bring the best care to the most people by using a systems approach that involves thoughtful coordination among all stakeholders and good planning and coordination among all levels of government" (HealthDay, 3/21; Robeznieks, Modern Healthcare, 3/21 [subscription required]).
House votes to repeal IPAB
GOP strips Commerce Clause language from bill
March 23, 2012
The House on Thursday voted 223-181 to approve legislation (HR 5) that would repeal the Independent Payment Advisory Board (IPAB) created by the federal health reform law.
The bill—which seven Democrats supported and 10 Republicans opposed—also would impose caps on medical malpractice awards.
The bill is unlikely to be heard in the Democrat-controlled Senate, and President Obama has vowed to veto the legislation should it reach his desk. Senate Republicans said they will push for similar legislation, perhaps by attaching amendments to other bills, a move Senate Democrats have said they would block.
Several Democrats criticized the GOP for merging the medical malpractice legislation with the IPAB repeal. Rep. Tim Bishop (D-N.Y.) said the malpractice provision was "poorly crafted," while Rep. Bill Pascrell (D-N.J.) said that if the bills were not linked, more Democrats would have supported the legislation.
Meanwhile, the American Medical Association (AMA) applauded the bill's passage. AMA President-elect Jeremy Lazarus said that IPAB "would have too little accountability and the power to make indiscriminate cuts that adversely affect access to health care for patients."
Republicans strip language from bill
The House on Thursday approved an amendment to remove language from the bill that states the health care industry affects interstate commerce. The amendment came about because of GOP concerns that the language could undermine their argument that the overhaul violates the Constitution's commerce clause.
Supporters of the overhaul have argued that under the commerce clause, Congress is able to mandate that all U.S. residents purchase health insurance coverage. Meanwhile, opponents of the reform law have countered that the commerce clause does not apply, because Congress cannot regulate market inactivity (Kasperowicz, "Floor Action Blog," The Hill, 3/22; Pecquet, "Healthwatch," The Hill, 3/22; Lee, Modern Physician, 3/22 [subscription required]; Strong, Roll Call, 3/22; Pear, New York Times, 3/22; AP/USA Today, 3/22).
Health reform turns two, but White House won't throw a party
Administration officials step in to promote law
March 23, 2012
President Obama will not mark the two-year anniversary of the federal health reform law this Friday, Politico reports.
White House press secretary Jay Carney told reporters on Wednesday, "I don't anticipate a presidential marking of an anniversary that only those who toil inside the Beltway focus on." He added, "What this President is focused on and what his administration is focused on with regards to the [law] is the implementation."
Instead, Obama administration officials have been promoting the law around the country. HHS Secretary Kathleen Sebelius, Agriculture Secretary Tom Vilsack and Labor Secretary Hilda Solis are making local appearances in Florida and Missouri to promote the overhaul's most popular provisions, including coverage for young adults and pre-existing conditions. In addition, Surgeon General Regina Benjamin and White House adviser Valerie Jarrett recently advocated for health reform in op-eds in several publications.
House Democrats also have played a major role in marking the law's anniversary. Speaking on the House floor on Wednesday, House Minority Leader Nancy Pelosi (D-Calif.) said the overhaul allows U.S. residents the flexibility to pursue "life, liberty and the pursuit of happiness" (Allen/Nocera, Politico, 3/21; Kasperowicz, "Floor Action Blog," The Hill, 3/21; Slack, "Politico 44," Politico, 3/21; Gardner/Wilson, Washington Post, 3/21; Pecquet, "Healthwatch," The Hill, 3/21; Glenn, MedCity News, 3/23).
Our reads for the weekend
March 23, 2012
The Daily Briefing editorial team highlights several studies and articles that got us talking this week.
In New Hampshire, "early offer" legislation could help physicians expedite medical malpractice litigation. The Concord Monitor has the story. More.
Is antibiotic resistance the "end of modern medicine?” At a conference in Copenhagen this month, World Health Organization Director-General Margaret Chan warned that once-curable diseases are becoming harder to treat. More.
Bringing health care to you: Bloomberg/Businessweek explains how more VIPs are avoiding the waiting room through concierge medicine. More.
Barefoot running may be all the rage—but is it metabolically efficient? A study in Medicine & Science in Sports & Exercise weighs the metabolic impact of wearing shoes while running. More.
On March 30, 1981, Joseph Giordano was one of the physicians who helped save President Ronald Reagan's life after an assassination attempt. In the Washington Post this month, he looks back on his 18 years as the chair of the department of surgery at George Washington University Hospital and on his decision to retire. More.
There's a new item on the list of things to worry about during extra-terrestrial flight: Flattened eyeballs. The New York Times explains. More.
What will happen if the Supreme Court strikes down the federal health reform law's individual mandate? Reuters outlines the scenarios. More.
According to a recent PLoS ONE study, 15% of U.S. physicians studied medicine in lower-income countries. This is "beneficial for the United States both clinically and economically but may have negative impacts on the countries of origin that are losing their educational investment," Medical News Today reports. More.
Is the U.S. nursing shortage over? An NEJM report says yes—for now. More.
Five ways health care's changed since 'Mad Men'
How we've gotten smarter about our health habits
March 25, 2012
From the Daily Briefing editors
AMC's award-winning TV drama "Mad Men" returns on Sunday night, and as our Advisory Board infographic captures below, health care's dramatically changed since the 1960s depicted on the show. Mortality rates from many diseases are down, the percentage of women in the health workforce is up, but the most striking difference is around our personal health habits.
We've plucked out four examples of characters on the show acting in unhealthy ways, as well as one egregious case of questionable medical ethics. For those who have watched the show, please browse and tell us what we missed.
(And as a last-ditch reminder: These examples all involve considerable spoilers. Consider yourself warned)
1. Smoking, drinking takes the edge off of pregnancy: Smoking is exceedingly commonplace in "Mad Men"; this video purports to chart every cigarette smoked in the first three seasons.
But there's no more striking moment than in Season 3, when viewers watch Betty Draper light up while pregnant with her third child. A visibly pregnant Betty also is seen quaffing cocktails, as parents in the 1960s were unaware of the risk of fetal-alcohol syndrome.
2. Roger Sterling won't let a few heart attacks keep him from a good steak: Ad man Sterling is smoking a cigarette when he suffers his second heart attack of Season 1. ("Not again," he grimaces in mid-puff.) But those back-to-back AMIs don't stop Sterling from eating, smoking, and drinking in subsequent episodes as though his cardiovascular health isn't an issue.
3. 'Exercise' is nonexistent: The biggest workout on "Mad Men"—outside of the energy spent chasing extramarital affairs—may be the effort to cover up those affairs. Unlike corporate TV dramas set in the present, no major character on "Mad Men" is ever depicted going for a jog or visiting the gym; the show's creator famously told the show's actresses to stop exercising in order to look more realistic for the period.
4. Doctor-patient confidentiality apparently doesn't apply to therapy: Don Draper regularly gets a rundown of his wife Betty's therapy sessions—from Betty's doctor. (She's emotionally immature, the doctor says at one point.)
5. Parents are concerned by children's antics—but not why you'd think: In an early episode, Betty scolds her daughter for running around, wearing a plastic bag. Is she worried about asphyxiation?
Hardly; Betty's worried that something's happened to her nice clothes.
Daily roundup: March 23, 2012
Bite-sized hospital and health industry news
March 23, 2012
California: Anthem Blue Cross has agreed to lower premium rate increases for about 600,000 policyholders from an average of 10.4% to 8.2%. State officials sought the lower rate hike after questioning Anthem's estimates for medical expenses (Terhune, Los Angeles Times, 3/22).
Colorado: The state Senate this week approved a bill that would require hospitals to inform uninsured patients about payment plan programs. Hospitals also would be required to offer a discount to patients who earn less than 250% of the federal poverty level. In addition, the bill—which now heads to the state House—would bar hospitals from charging low-income patients more than they bill insurance companies for the same procedure (Sealover, Denver Business Journal, 3/20).
Connecticut: Yale University researchers have developed a new type of MRI that can allow scientists to see inside solid objects like rocks and bones. However, the MRI—which targets phosphorus atoms instead of hydrogen atoms—cannot yet be used on living things because it generates too much heat. The researchers' findings were published this week in Proceedings of the National Academy of Sciences (Weir, Hartford Courant, 3/19).
Kentucky: Winchester-based Clark Regional Medical Center has opened a new $60 million, 79-bed replacement hospital. The facility is expected to be fully operational by March 31. Clark Regional also plans to open a medical office building in August that will house physician offices, as well as a women's health center and a rehab/physical therapy center (Kutscher, Modern Healthcare, 3/19 [subscription required]).
Instilling frontline accountability
March 23, 2012
Join former CNO Joan Meadows as she shares the three-part framework to help nursing leaders build frontline accountability in their organizations.
Unnecessary anesthesia increases health spending by $1B annually
Using general anesthesia unnecessarily for gastroenterological procedures costs the U.S. health care system as much as $1 billion annually, according to a study in JAMA.
According to the study, the ratio of individuals who received general anesthesia for colonoscopies and endoscopies increased from 14% in 2003 to 30% in 2009, with the majority of procedures involving low-risk patients with no breathing or heart problems. The study found that general anesthesia can raise the cost of such procedures by $500 under private insurance and by $150 under Medicare.
The study authors noted that as more individuals undergo gastroenterological procedures while receiving general anesthesia, "the overall cost of colonoscopy screening programs will be closely scrutinized by payers and policymakers" (Liu et al., JAMA, 3/21 [subscription required]; Shute, "Shots," NPR, 3/20; Tanner, AP/Chicago Tribune, 3/20).