Transcript Slide 1

“Improving Our Health Care Delivery:
New Appeals and New Ideas”
Innovations in Health Care Delivery
2006 Conference
Sponsored by:
College of Business, University of Cincinnati
Cincinnati Children’s Hospital Medical Center
William P. Pierskalla, Ph.D.
Distinguished Professor and Dean Emeritus
UCLA Anderson Graduate School Management
Ronald A. Rosenfeld Professor Emeritus
The Wharton School, University of Pennsylvania
email: [email protected]
Outline of Lecture
• A brief review of the current state of our
health care system?
• Second: What the NAE/IOM Report is
asking us to do
• Third: What is our job?
The current state of our
health care system
We will continue to move to new crises
in Health Care Delivery in the United
States (as well as in most or all other
developed countries)
• they will begin to surface strongly in
the years 2007-2010 (probably in 2007
or 2008) and then they will continue to
gain momentum unless war, terrorism
or other major events continue to
dominate the news.
Why do I believe this?
Because they will again become a
major political agenda item
DRIVEN BY:
• Costs
•
•
•
•
•
Quality
Technology
Access
Aging of Baby Boomers - 2011
Social Security/Medicare Financial
Crises
Should we be Optimistic or
Pessimistic about this?
• More Optimistic: Because OR/MS has answers to many of
these problems and the research capabilities to resolve many
others.
THIS CONFERENCE IS A PRIME EXAMPLE !
A Second Example Is the Recent NAE/IOM REPORT !
• But Somewhat Pessimistic: Because OR/MS might not be at
the national table when the crises demand solution and the crises
will be attempted to be resolved only politically and/or pseudoeconomically. And because there are no present forces evaluating
the fantastic growth in medical research and technology.
• HOWEVER, OR/MS will be in the thick of the handson work at the institutional level of care delivery
Where are we?
First: the crises areas:
• Costs
•
•
•
•
•
Quality
Technology
Access
Aging of Baby Boomers
Social Security/Medicare Financial Crises
COSTS
Each of them is named after one of my medications
YEAR 2004
• Health Care spending per person in USA
increased by 8.2% (total $1.9 trillion or
16% of GDP)
• Who paid: Employees and the Elderly!
(Employers?- essentially
no)
–
–
–
–
Disposable wages
Co-payments and deductibles
Insurance premiums
Medicare premiums and deductibles
2000000
1800000
1600000
1400000
1200000
1000000
800000
600000
400000
200000
0
1,877,600
y = 1214.7x2 - 19178x + 104759
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
19
70
19
68
19
66
19
64
R2 = 0.9924
19
62
19
60
EXPENDITURES (in
millions)
TOTAL U. S. HEALTH CARE EXPENDITURES IN
ACTUAL DOLLARS 1960-2004
YEARS 1960-2004
Expenditures
Polynomial where x =
1,…,45 corresponding
to 1960,…,2004
Percent Change in Health Care Expenditures 19612004
18.0%
Average = 10.2% for 1961-2002
Percent Change
16.0%
14.0%
12.0%
?
10.0%
8.2%
?
8.0%
6.0%
4.0%
?
Percent Change Year to Year
2.0%
0.0%
2004
1
1960
3
5
7
9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43
1985
2002
Years
Average = 7.98% for 1985-2002
Source: OECD Health Data 2004, 2nd Edition
Introduction
and implement.
of ProsPaySys.
Hey-Day years of
Managed Care
2010
The Causes of Health Cost
Increases
•
•
•
•
•
•
•
Demographics
Income Level Increases
Insurance
Price Inflation / non Wages
Administrative Expenses
Factor Rents
Technologies
Table 2: Accounting for the Increase
in Health Costs 1940-1990
Factor
Demographics
Income
Spread of Insurance
Relative Price Change
Administrative Expense
Factor Rents
Increase Due To
14
37
100
147
101
0
Share of Total
2
5
13
19
13
0
Total Static Factors
Technology
399%
391%
51%
49%
Total Increase
790%
100%
Source: David M. Cutler, “Technology, Health Costs and NIH,” Harvard University and
NBER paper presented at the NIH Economics Roundtable on Biomedical Research,
October, 1995.
Quality
Five of IOM/NAE Quality Reports
•
November 1999 (IOM): “To Err Is Human”
– Found that 44,000 to 98,000 Americans die each year as a result of medical
errors.
•
March 2001 (IOM): “Crossing the Quality Chasm: A New Health System
for the 21st Century”
– Found that the healthcare system is “plagued by a serious quality gap” and called
for eliminating handwritten clinical information by 2010 and refocusing the
healthcare system on treating chronic illnesses.
•
October 2002 (IOM): “Leadership by Example: Coordinating
Government Roles in Improving Health Care Quality”
–
•
Argued that the federal government should lead the development of clinical standards for measuring care and
proposed financial incentives for organizations that improve quality.
November 2003 (IOM): “Keeping Patients Safe: Transforming the Work
Environment of Nurses”
– Identifies solutions to problems in hospital, nursing home, and other health care
organization work environments that threaten patient safety through their effect on
nursing care.
• In 2005 (NAE and IOM): “Building a Better Delivery
System: A New Engineering/Health Care Partnership”
– “Purpose is to forge a new partnership between Systems Engineering,
Operations Research, Management Science and Medicine” to manage
quality, costs and access challenges.
Building a Better Delivery System:
A New Engineering/Health Care
Partnership*
A National Academy of Engineering/Institute of
Medicine Report
Supported by grants from:
National Science Foundation, Robert Wood Johnson Foundation, and
the National Institutes of Health
*Wherever it says “engineering”, it also implies “business
information and operations management”.
Study Committee
• W. Dale Compton, PhD,
Cochair, Purdue Univ.
• Carol Haraden, PhD, IHI
• Jerome Grossman, MD,
Cochair, Harvard
• Richard Migliori, MD,
United Resource
Networks
• Rebecca Bergman,
Medtronic
• Woodrow Myers, MD,
WellPoint
• John Birge, PhD, Univ. of
Chicago
• William Pierskalla, PhD,
UCLA
• Denis Cortese, MD, Mayo
Clinic
• Stephen Shortell, PhD,
UC Berkeley
• Robert Dittus, PhD,
Vanderbilt Univ.
• Kensall Wise, PhD, Univ.
Michigan
• G. Scott Gazelle, MD, MGH
• David Woods, PhD, Ohio
State Univ.
Project Goals
• Accelerate introduction of engineering ideas
and principles to health care delivery
• Identify engineering applications
(technologies, tools, and research) that could
help significantly improve health care system
performance
• Identify factors that facilitate or inhibit the use
and diffusion of these applications
• Identify research and education priorities for a
new engineering-medicine partnership
Converging Crises—Safety,
Quality, Cost, Access
•
Safety failures
– 1 million injuries; 98,000+ deaths annually in U.S. from
process/system failures (progress from IHI's 100,000 Lives Campaign)
•
Knowledge—Practice Gap
– patients receive “best practice” treatment only half of the time
• Waste, Inefficiency, Spiraling Costs
– 30 to 40 cents of every health care dollar covers costs of
“overuse, underuse, misuse, duplication, system failures, poor
communications and inefficiency” 30% of $1.6 trillion = $480
billion/yr
– Health care costs rising at or close to double digit rates since
late 1990s, 3X rate of inflation
•
Growing uninsured population ~ estimated 45 million in 2006
•
Revenue squeeze on care providersStaff cuts/workforce shortages
impact safety, timeliness, access, patient-centeredness
ERRORS
OVERUSE
I’M HAVING SLIGHT
STOMACH PAINS
REGULAR.
THAT’LL BE AN UPPER GI
AND TWO PEPTO BISMOLS.
PULL UP TO THE NEXT
WINDOW, PLEASE
PERHAPS IT’S TIME TO
RE-EVALUATE
HEALTH CARE.
YOU WANT AN
APPENDECTOMY
WITH THAT?
MISUSE
BIZARRO
BY DAN PIRARO
IT’S A “WIN-WIN” SITUATION! THERE WAS NOTHING WRONG WITH
YOUR HUSBAND AFTER ALL SO HE CAN GO HOME IN A WEEK OR
SO…..AND I CAN NOW AFFORD TO GO TO EUROPE THIS SUMMER.
INEFFICIENCY
A Patient-Centered Model of the
Health Care System
PATIENT
The Care Team
The Organization
The IDS
The Broader Political and
Economic Environment
NOT PATIENT CENTERED
Focus for a New Engineering/Health Care Partnership
A Systems Approach to Health Care Delivery
•
Use System design, analysis, and control tools &
associated research to advance understanding of processes
and system interactions and to improve/optimize dimensions of
system performance in face of constraints
•
Use Information and information/communication
technologies and associated research to advance
connectivity, information flow, coordination
A Systems Engineering Agenda for Health Care
Delivery—Selected Findings
1.
Systems-engineering and business tools have
improved quality, efficiency, safety, customercenteredness of processes, products, and
services in a wide range of manufacturing,
services and high risk industries, including
“islands” of health care.
2.
Some tools can or have been adapted for
limited tactical/localized application to improve
performance of discrete health care
processes, units, and departments—e.g.
concurrent engineering, SPC, queuing theory, modeling/
simulation, human factors, Failure Mode And Effects
Analysis (FMEA), Toyota PS, Six Sigma.
A Systems Engineering Agenda for Health Care
Delivery—Selected Findings
3.
Strategic use of other and more informationintensive tools* in HC has been limited—*i.e., tools
from enterprise & supply chain management, financial
engineering & risk analysis, and knowledge discovery in
databases.
4.
Information/communications (IC) systems are
critical for taking advantage of the potential of
existing and emerging systems-design, -analysis,
and -control tools to transform HC; in turn,
systems tools will be critical to effective design,
deployment and management of IC systems for HC
Systems Engineering Agenda—
Recommendations
Actions to promote development,
adaptation, and use of systems
engineering tools
• 3rd party payers to incentivize tool use
• Expand/coordinate outreach &
support
• Educational materials/NLM website
• Increase public/private support for
R,D&D
Information/Communications Technology
Agenda— Recommendations
1. Design and build NHII/NHIN* for the future—
actions to insure an evolving network
capable of incorporating WIMS (Wireless
Integrated Microsystems) and other next-generation
functionality/technologies.
2. Action to advance standards,
interoperability, reduce barriers to
implementation
*National Health Information Infrastructure/National Health
Information Network
Information/Communications Technology Agenda—
Recommendations
3. Actions to Promote Research, Development
& Demonstration Priorities
– Controlled Medical
Vocabulary
– Master Patient Index
– Electronic Health
(Patient) Record
– Speech/handwriting/
natural language
recognition
– Computerized Physician
Order Entry
– Centralized Patient
Scheduling in Care
Delivery Networks
– Enterprise Decision
Support Systems
– Connectivity / Networks
– Integration of Disparate
Legacy and New Systems
– HIPAA Improvements
Accelerating Change
The federal government, in partnership with the private sector,
universities, federal laboratories and state governments,
should establish multidisciplinary centers at
institutions of higher learning throughout the
country to:
•
Conduct basic and applied research on systems challenges to
healthcare delivery and development/use of:
•
•
•
Systems engineering tools
Information/communications technologies
Knowledge from other fields
•
Demonstrate and diffuse the use of these tools, technologies and
knowledge throughout the healthcare delivery system
•
Educate and train current/future healthcare, engineering and
management professionals and researchers in the science, practices
and challenges of systems engineering for healthcare delivery
So What Should OR/MS Be Doing?
• A great deal but far from what could
and will hopefully be done in the future.
Much More Research
Some Examples
• Better Data Mining in
Genomics/Proteinomics/
Drugs development
• More Powerful
Optimum- seeking
Nonlinear Algorithms
• Integrated Models of the
Patient-Centered Supply
and Delivery Chains
– In the Home
– In the Outpatient Setting
– In the Hospital
– In Long-term Care
• Better Decision Analytic
Tools – Stochastic
Branching Processes
• Best Adaptive Processes to
Determine Best Practices
for Patient-Centered Care?
• Better Outcomes
Measures
• Individual and
Organizational Change
Much More Applications
DECISION SUPPORT SYSTEM USE & ISSUES
DECISION SUPPORT SYSTEM
SYSTEMS
WIDE-SPREAD
USE
Operations Management Strategy
Yes
Medium
Demand Forecasting
Yes
Low
Capacity Planning
Location Decisions
Yes
Yes
Low
Low
Process and Layout Design
Scheduling and Staffing
Productivity
Yes
Yes
Yes
Quality Control Data and Methods
No
Low-Med
Health Status and Severity Assessment
Yes
Medium
Yes
Limited
Market
Research
Yes
Yes
High
Low-Med
Low
Quality Assurance
Total Quality Management
Purchaser’s Perspective on Quality
Inventory and Maintenance
Regional Planning
ISSUES
Don’t know the questions to ask
Limited Availability—don’t always like
the answer
Cost
Lack of management understanding
Consulting Acceptable systems and data
Medium High use by consultants
Medium Future will require these types of
decisions (therefore systems)
High
High
Large organizations support these
systems
Growing through e-health companies
Government focus
Clinical Decision Support System Use & Issues
Clinical Decision Support
System
Systems Widespread Issues
Use
CPOE
yes
No, but
growing
Only in a few advanced
health care systems
Diagnostic
A few
No
Still in research mode
Therapeutic
A few
No
Still in research mode
Preventive
A few
No
Still in research mode
Disease management
A few
No
Only in a few large
managed care org.s and
only a few chronic
diseases-also still in
research mode
Progressive care
None
No
Not yet even in research
Our Job
Is to bring this “heaven” to the health care
delivery system in the United States
This conference will be exploring how to do
this task and provide some exciting answers.
Low Hanging Fruit
• It's not uncommon that a patient scheduled for surgery
accidentally receives dinner the night before from Dietary,
resulting in a delay for surgery, and at least an additional day of
stay for the encounter.
• At about 5:00 PM, the attending MD decided that the patient
could be transferred to a telemetry bed outside of the ICU
(pressure from the backed-up ED, no doubt), but would require
additional nursing supervision not normally available on that
unit. Of course, by this time, it was so late in the day that
arrangements could not be made for an additional nurse's aid,
so the physician reversed the transfer order - he spent at least
1/2 hour to an hour on phone calls in this entire process and so
did many others.
• Although CMS provides fairly clear guidance for physician billing
for ED visits, the guidelines for facility billing are somewhat
ambiguous. Given concerns about OIG audits and penalties for
fraud & abuse, you find, almost without exception, that the
facility bills for a much lower level of visit than the physicians
(indicating a lower acuity level), for the very same patient
population, resulting in about $50-$100 in foregone revenues
(after adjusting for collections write-offs) per visit.