Hospital

Who should be able to answer these business questions?

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Now that spring is in full bloom, I’ve been doing a little gardening. My dogs are the anti-gardeners. No sooner do I turn my back after planting something, there they are, happily digging away and ceremoniously digging it up. I don’t know if that’s because they don’t like the particular plant, or just happen to disagree with where I planted it.

Today I discovered the youngest dog uprooted a plant and replaced it with a Reece’s Peanut Butter Cup. Perhaps she wanted to grow a candy tree.

One thing that always confuses me about gardening is this: When I plant a one-gallon shrub, I dig a two-gallon hole. I place the gallon shrub in the two-gallon hole and proceed to fill the remaining one gallon hole with the two gallons of dirt lying next to it. Without fail, there is never enough dirt to fill the hole. Perhaps you can tell me what I am doing wrong.

Here is another area of confusion for me: When you walk or are wheeled into a hospital, neither you nor anyone else knows the answer to anything.

That is astonishing. Nobody can tell you:

* With whom you will interact.
* How long you will stay.
* What will happen to you.
* How it will happen to you.
* When it will happen to you.
* Who will be doing the happening.
* Exactly when it will happen.
* Whether it will need to happen again.
* What it will cost.
* What you will be charged.
* What will be covered.
* How much you will owe.

I am stupefied. How can anyone run a business like this? My daughter knows what her lemonade stand costs per cup. Wendy’s knows the cost of a bag of fries and a large Frosty. Porsche knows the cost of a Cabriolet, the cost of the shift knob, when the wheels will arrive at the factory, when they will be placed on the car, who will build it, who will inspect it, and who will sell it. They can tell you exactly who will touch the car, when they will touch it, and what those people will do to it.

The only thing anyone at a hospital may be able to tell you is whether HBO is billed separately. If I wanted to fly into space with the Russians, I would know the answer to each of those questions. The cost, for example: $50 million.

Why can’t a hospital do this? Because it doesn’t know the answers. It is not because anyone is keeping this information a secret–it’s because they really don’t know. The truly strange thing is that they seem to be okay with not knowing.

Recently, I reconnected with a good friend whom I haven’t seen in years. He is the vice president of finance for a large hospital. He used to be an accountant–a very detailed and precise profession, unless you’re one of the guys who used to do Enron’s books. (The only thing I remember about accounting is that debits are by the window and credits are by the door–if I’m in the wrong room, I’m at a total loss.) This business must drive him nuts!

And so I’ve been wondering; would hospitals be more profitable if:

* They had a P&L by patient?
* They had a P&L per procedure?
* The steps for the same procedure, say a hip replacement, were identical each time?
* They had answers to any of the questions you read above?

Of course they would!

Some areas of healthcare already discovered this tautology–Lasik, endoscopy, the Minute Clinic. Assembly-line medicine. Some people say those words with an expression on their face as though they’d just found a hair in their pasta. The office of my Lasik surgeon looked more impressive than the lobby of my Hyde Park hotel. It may leave a bad taste in the mouth of some, but for others, they are laughing all the way to the bank.

How many Sigmas does it take to change a hospital?

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I wrote this in response to some comments I received on my piece in HospitalImpact.org.

I do not advocate assembly line medicine, especially at a hospital. I go out of my way to stay out of the healthcare business–the clinical side of healthcare–an area in which I have no background other than having been a patient.  There seems to be an inability to answer basic business questions relating to how the business of healthcare is run.

On the care side there is a need for the independence and the je ne sais quoi nature of care. However, the business of healthcare and the healthcare business can coexist in a more business-like manner. There are hospitals which get it right, and those which get it much less right.

Some of the ineffectiveness of running a hospital like a business has to do with costs, some with waste–wasted time, wasted opportunity, some with inefficiency, and some with poor planning. If one hospital can do procedure X for thirty percent less than another, it is worth exploring what accounts for the delta. If another hospital can perform twenty percent more procedures with the same level of resources, that is worth investigating. There is no point keeping metrics unless one is willing to improve them.

I am not big on efficiency. In most cases, efficiency implies speed. It is possible to perform poor processes at a speed which will make your head spin. Lots of hospitals are toying with Lean. Lean works best with a valid set of processes. Without a valid set of processes–best processes–there are not enough Sigmas to justify the expense.  To those lauding how many Six-Sigma professionals they have employed, what have they done for you?  Are you better off than those hospitals who only have Five-Sigma specialists?  Would you be better served if you cranked it up a notch or two to Seven or Eight-Sigma gurus?

Then there are the cost cutting advocates. Cost cutting alone is a dead end strategy.  Every manager can cut costs–less than one in a hundred can increase revenues. What do you do when there are no more costs to cut? Are you more effective, or net-net did you simply replace the brewed coffee with Folgers? Want to cut costs? Lock the doors. But that does not solve anything.

If none of these questions can be answered today, what happens in five years? New entrants will have gobbled up many profitable services and will be able to do so because they do not have “Big Box” overhead. Reform will have forced another business model on large providers. Payors and pharma will continue to battle for their share of each healthcare dollar.

I think hospitals can grab an even larger portion of that dollar, but I do not think they can do it without changing how they approach the business of healthcare.

The Patient as Customer

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The headline for a recently published McKinsey survey stated “Ninety percent of hospital CEOs ranked Patient Experience Management (PEM) as their first or second priority over the next three years.

Buried deep within the article was a throw away statement that little will be done regarding PEM because nobody knows who owns the patient.

Any journalism student worth their salt would tell you the real headline for the survey should read something like “Ninety percent of hospital CEOs and COOs do not know who owns the patient at their hospital.”

From a business perspective, in the conversation about patients and PEM one thing is always overlooked.  These people, the patients, also have a business avatar.  They are also customers.  PEM from a business perspective focuses on all the non-clinical aspects of the patients as a customer.

There are dozens of non-clinical processes that affect each customer (patient)—admissions, discharge, billing, scheduling, disputes, claims…

Many of these processes are ineffective and inefficient.  Many are redundant and duplicative.  Many add more cost than value.

If you want to improve the patient experience, look first at these.  You will be surprised by how much better your organization will be perceived.

Why is the large provider business model obsolescing?

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Margaret Thatcher said, “Anyone who finds themselves on public transport after the age of 26 must consider themselves a failure.” There’s probably some sort of corollary for anyone twice that age that spends part of every day writing to imaginary people on the web.

When I write I like to pick a side and stand by it instead of standing in the middle of the road where you can get run over by the traffic from both sides. Likewise, I don’t look for consensus around an idea. Consensus is the process of everyone abandoning their beliefs and principles and meeting in the middle. When was it decided that meeting in the middle is beneficial? So, achieving consensus about a problem is nothing more than that state of lukewarm affection one feels when one neither believes in nor objects to a proposition.

Having this approach to solving business problems tends to yield a high number of critics. I don’t mind critics; those are the same people who after seeing me walk across a swimming pool would say that my walking only proves that I can’t swim. I rather enjoy it when someone offers a decidedly personal attack on something I wrote if only because it means they can’t find a legitimate business principle on which to base their argument. I love the debate, and I don’t expect anyone to agree with me just because I say it is so.

In trying to promote a different way of looking at the large provider business model, I’ve learned that it’s not possible to lead from within the crowd. The “as-is” hospital business model (how the hospital is run) was created over time, by followers. I may be wrong, but the most innovative alteration I have seen to the hospital business model in the last decade has been the addition of mini Starbucks, and the revamping of their lobbies to make hospitals look more like hotels.  The future will be created by someone who believes the strategy of how hospitals run can be done better. I believe firmly in the notion that improving the business model by building off the current one is like trying to cure a cold with leeches.

The approach that has been used to grow the business for the last fifty years is that the hospital is responsible for everything. And yet, who is responsible for the hospital? Who is accountable for the fact that the business model is obsolescing itself?  We have loads of new stuff—expensive stuff.  No other industry can tout new and improved services better than healthcare.  However, in those industries new and improved means faster, smaller, cheaper–it means adding services to reach significantly more customers, not fewer.

Each new and improved procedure with its more costly overhead has application to a smaller percentage of the health population, thereby allocating that overhead across fewer patients.  In turn, that makes the low-margin services unprofitable.  Those services will be cut lose, picked up by new entrants with lower overhead.  Those entrants will make a good business out of services discarded by hospitals.  The cycle will repeat, as it has for decades.  The profitable new entrants will move up-market.

Is it a question of scale versus scope, or scale and scope?  What happens if instead of continuing to repeat the cycle, large healthcare providers were to invert it?  What makes them more relevant, adding the capability to perform a procedure used once a month or one used once an hour?  Which is more important to the future model, inpatient care or outpatient care?  I suggest that “in” or “out” will become irrelevant.

Those phone booths in the photo used to be the way to make public calls, now you can’t even find a booth.  Maybe some day someone will take a photo of a group of hospitals stacked next to each other in a vacant lot.

Hospital Business Strategy–One size fits none

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One size fits none, or is it one.  The patient rarely buys what the hospital is selling.  The hospital sells a hip replacement—the patient is buying the ability to play golf for ten more years.

Clayton Christensen conducted a study which showed that seventy percent of today’s patients would have been in the ICU thirty years ago, and seventy percent of the patients in today’s ICUs would have died thirty years ago.  The question the study seemed to leave unaddressed is who is now caring for those patients who were not in the ICU and who didn’t die.  Wanna’ bet most have been outsourced to non-hospital care givers?

There was a successful business model in that group of patients when they were treated at the hospital thirty years ago.  There is an even larger business model today for that same set of patients; only it is no longer owned by the hospital.  Neither are the associated revenues.

Hospitals have more high-end capability—and cost—than the average patient will utilize—sort of an 80/20 rule on steroids.  Each successive clinical breakthrough enables the hospital to solve a problem for a mere handful of patients; one that will have no application to 99% of patients in their service area.

What if instead of continuing to expand the reach for the stars model ad nauseam, the hospital flipped the model on its side and catered to the ninety-nine percent?  What if the business model centered on serving mainstream customers?  But then who or what would handle the other one percent of the cases?  An autonomous business unit could be established to serve those cases, or they could be outsourced to a group which did.

EHR–the five stages of grief

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Being a blogger is not too dissimilar to being a failure’s biographer.  Unless you simply repeat the ideas of your contemporaries, good blogging requires a certain avidity to oppugn those who revel in the notion that theirs was the only good idea.  To me, their Sang-froid calmness has all the appeal of a cold omelet.  Good writing requires that you make intellectual enemies across a range of subjects, and that you have the tenacity to hold on to those enemies.  So let us step off Chekhov’s veranda and bid farewell to the sisters of Prozorova.

The Kübler-Ross model, commonly known as the five stages of grief, was first introduced by Elisabeth Kübler-Ross in her 1969 book, On Death and Dying.  I heard a story about this on NPR, and it made me think about other scenarios where these stages might apply.

My first powered form of transport was a green Suzuki 250cc motorcycle.  My girlfriend knitted me a green scarf to match the bike.  One afternoon my mother walked into the family room, saw me, and burst into tears.  When I asked her what was wrong, she told me that one her way home she saw a green motorcycle lying on the road surrounded by police cars and an ambulance—she thought I had crashed.  I asked her why, if she thought that was me lying on the road, she did not stop.

My girlfriend’s mother, didn’t like my motorcycle—nor did she like me.  Hence, my first car; a 1969 Corvair.  Three hundred and fifty dollars.  Bench seats, AM radio.  Maroon—ish.  It reminded me a lot of Fred Flintstone’s car in that in several places one could view the street through the floor.  Twenty miles per gallon of gas, fifty miles per quart of oil.

Buyer’s remorse.  We’ve all had it.  There is a lot of buyer’s remorse going around with EHR, a lot of the five stages of grief.  I see it something like this:

  • Denial—the inability to grasp that you spent a hundred million dollars or more on EHR the wrong EHR, one that will never meet your needs
  • Anger—the EHR sales person received a six-figure bonus, and you got a commemorative coffee mug.  The vendor’s VP of Ruin MY life, took you off his speed dial, unfriended you in Facebook, and has blocked your Tweets. You phone calls to the vendor executive go unanswered, and are returned by a junior sales rep who thinks the issue may be that you need to purchase additional training.
  • Bargaining—when you have to answer to your boss, likely the same person who told you which system to purchase, as to why productivity is below what it was when the physicians charted in crayon.
  • Depression—you come in at least fifteen minutes late, and use the side door, taking the stairs so you won’t see anyone.  You just stare at your desk; but it looks like you are working. You do that for probably another hour after lunch, too. You estimate that in a given week you probably only do about fifteen minutes of real, actual, work. (Borrowed from the movie, Office Space.)
  • Acceptance—the EHR does not work, it will never work, you won’t be around to see it if it ever does.  Your hospital won’t see a nickel of the ARRA money.  You realize the lake house you were building will never be yours, but the mortgage will be.

The five stages of EHR grief.  Where are you in the grieving process?

True, there are a handful of EHR successes.  Not nearly as many as the vendors would have you believe.  More than half of hospital EHR implementations are considered to have failed.

If you are just starting the process, or are knee-deep in vendor apathy you have two options.  You can bring in the A-team, people who know how to run big ugly projects, or you prepare to grieve.

If it was me, I’d be checking Facebook to see if I was still on my vendor’s list of friends.

“Our Lady of Perpetual Implementations”

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“There is no use trying,” said Alice;
“one can’t believe impossible things.”
“I dare say you haven’t had much practice,” said the Queen.
“When I was your age, I always did it for half an hour a day.
Why, sometimes I’ve believed as many as
six impossible things before breakfast.”

There are a number of people who would have you believe impossible things.  I dare say some already have.  Such as?

“My EHR is certifiable.”

“They told me it will pass meaningful use.”

“We’re not responsible for Interoperability; that happens at the Rhio.”

“It doesn’t matter what comes out of the reform effort, this EHR will handle it.”

“We don’t have to worry about our workflow, this system has its own.”

Sometimes it’s best not to follow the crowd—scores of like-thinking individuals following the EHR direction they’ve been given by vendors and Washington.  Why did you select that package—because somebody at The Hospital of Perpetual Implementations did?

There is merit in asking, is your organization guilty of drinking the Kool Aid?  Please don’t mistake my purpose in writing.  There are many benefits available to those who implement an EHR.  My point is is that there will be many more benefits to those who select the right system, to those who know what business problems they expect to address, to those who eliminate redundant business functions, and those who implement proper change management controls.

Fitting Your Square Hospital into a Round ACO Hole

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(reposted from this week’s healthsystemcio.com)

I have spent time over the past few weeks speaking with healthcare executives to get their perspective on ACOs, also known as Attorneys and Consultants Opportunities. For the most part, people are in general agreement when it comes to describing the function of an ACO.

So much for the good news. Where the process breaks down is when those same executives were asked to describe what approach is required to enable an ACO to work in a generic hospital.

While there are many people claiming to know the in’s and out’s of ACOs, we all know there is not a lot of expertise regarding how to implement an ACO. There are not a lot of people who have “Been there, done that, got the T-shirt.”

When faced with finding a solution to a problem which I have no way to solve, I find it helpful to redefine the problem into one which I do know how to solve. If I take this approach with ACOs, it helps me to redefine it for what it is—a big, ugly program—a BUP. The good news is that I know what works and what does not work when it comes to dealing with BUPs.

There are two ways to tackle a BUP. One way is to study your organization and figure out how to get the program to work within your hospital’s framework. The other way is to figure out what the program needs to deliver, and then determine what needs to happen to the framework to enable the program to work.

I liken the two approaches to fitting puzzle pieces together. Let us define Puzzle A as the hospital’s framework, and Puzzle B as the ACO program (not an IT program). Under the first approach, you remove pieces from Puzzle B until you get it to fit. The problem with this approach is that by the time you finally get it to fit Puzzle B, the ACO no longer resembles an ACO.

Using the other approach — figuring what pieces must be removed from Puzzle A in order for Puzzle B, the ACO, to remain whole — provides the best chance of creating a viable ACO. One may wish to argue against this approach by saying that to create the ACO requires dismantling part of the hospital’s framework.

Indeed it does, but maybe that is not as bad as it sounds.

Many EHRs were implemented in such a way as to dismantle a lot of their functionality in order to get the EHR to fit the hospital’s framework. This “lesser” EHR is now part of that disrupted framework and has made it even more disrupted.

Perhaps the time has come to think about reengineering the framework before sacrificing the functionality of yet another program.

When your ACO gives you lemons—make Lemonade

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This weekend the temperature warmed enough to cause the neighborhood children to set up the season’s first lemonade stand.  One of the moms suggested the stand be set up in the corner of the cul-de-sac.  By definition, a cul-de-sac is roundish, as in no corners.  When I laughingly questioned the mom as to which corner of the round cul-de-sac she had in mind, she failed to see my humor.

Each of the children brought different supplies; lemons, paper cups, a table, a hand-painted sign, water, and pre-mixed lemonade.

By closing time they had collected twenty-one dollars and seventeen cents.  They met at our house to divide the spoils of their venture, a task that sounded easier than it was.  The corner cul-de-sac child felt the money should be divided equally.  As her only contribution to the venture had been a tablecloth, her suggestion was met with a robust debate.

I suggested they look at using some of the money to pay back those children according to what their supplies cost—according to the children the supplies did not cost them anything because they took them from their homes.

By now you have figured out where this ACO conversation is going.  Without knowing ones’ costs, how can one really allocate profits against those costs?  The children knew what they charged, and they knew what they made, but they knew nothing of their costs.  The same concept applies when viewing the problem of performing a hip replacement instead of simply selling lemonade.

Perhaps providers should start with opening a lemonade stand to get a better understanding of the business requirements, and then work their way up to the ACO model.

Patient Experience Management: I hate to be a pest…

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…but I inadvertently just proved my own point, albeit to myself. I have been fooling around–with my old MP3 player, and I couldn’t get it to turn off or on–that’s why my wife hides the power tools.

I ducked into a nearby phone booth and put on my SSCC (self-service customer care shirt)–do you realize most kids under the age of ten have never seen a phone booth? Sorry.

Off to Google. I never even considered going to the manufacturer’s web site. I typed, “Remove battery from Creative Vision:M.” Up pop several YouTube videos, each done by one of Creative’s customers, showing step-by-step with voice instructions explaining how to correctly remove the battery. I place a lot more faith in what a customer tells me than I do in what they firm tells me.  Your customers (patients and doctors) do the same thing.

The user manual that came with the device never mentions how to remove the battery.

And this is my point. Your patients know what your other patients need, and in what form it will be most useful. And, they are providing it. Now, how difficult would it be for a hospital, say your hospital, to start thinking about your patients as though you were a patient? Not very.

Of the few hospitals which have a Patient Experience Management (PEM) strategy or social media (SM) strategy, not too many are effective.  I’ve only seen one which uses those to increase revenues.  Most hospitals use PEM and SM to manage spin, to try to counteract what their patients are saying about them.  One can only imagine the impact a hospital could have by starting the spin, starting conversations about itself using these tools.

You know what?  You don’t have to imagine it.  It is probably the easiest project you will undertake.

Here’s a link to a PowerPoint deck on the subject of PEM.

http://www.slideshare.net/paulroemer/good-CEM-deck