Transforming Care Delivery to Focus on Patient Outcomes: Why Boards Matter

© 2012 Center for Healthcare Governance


The Business and Patient Imperative Improving health care quality and safety to create better outcomes and greater value for patients and communities can be a daunting challenge for leaders trying to transform our delivery system. In fact, the challenges are so large that it makes sense for key stakeholders of the health care system to work together to accelerate change. Many Blue Cross and Blue Shield (BCBS) health plans have partnered with hospital associations and hospitals to line up training, toolkits, data reporting and financial incentives to create a new health care delivery paradigm. Small, significant steps are moving us in the right direction under the guidance of hospital leaders and clinical champions.

The financial pressures are well documented in the popular press and annual reports of hospitals, insurance companies, government agencies and the checkbooks of the patients we serve. Annual spending on health care delivery is enormous and rising, representing $2.5 trillion that competes with many other social imperatives in our communities. Insurers, as well as hospital leaders, are alarmed by the constant upward trend in spending. And the question remains, is the money being well spent? One study estimates that at least 30% of every dollar actually spent on care is funding ineffective or redundant care (Institute of Medicine, 2005). A recent report indicates that 84,000 premature deaths could be prevented if the US performed as well as some other nations (The Commonwealth Fund, 2011). Care is not only expensive, but sometimes actually harms the patient. One study suggests that $17 billion a year is spent on medical errors (Classen, et al., 2011). Our current approach to paying for services focuses on the volume or the number of procedures done to a patient, rather than on a successful outcome.

According to a recent Office of the Inspector General study based on a review of hospital charts, more than 13% of Medicare patients are injured or die from adverse events in medical treatment each year. This translates to 1 in 7 Medicare patients experiencing harm or death from a potentially preventable event (Levinson, 2010 OIG report). There have been many campaigns and concerted efforts to improve quality and patient safety in individual hospitals, across states and nationally. Efforts to reduce central line associated bloodstream (CLABSI,) catheter-associated urinary tract infections (CAUTI) and other hospital-acquired conditions as well as use of quality and safety improvement tools, such as the surgical safety checklist, are beginning to have a significant and sustained impact in hospitals in several states, yet there is still work to be done.

The Blue Cross and Blue Shield Association was a major funder of the Institute for Healthcare Improvement (IHI) 5 Million Lives Campaign. Many organizations joined the campaign to learn and apply quality improvement techniques to every day practices. However, efforts are barely keeping up with the rising complexity of medical procedures and the acuity level of patients. 4 Insurance companies, purchasers and providers are concerned by quality and safety problems, and want to set goals for improvement. However, quantifying the problem currently is a complex undertaking. In fact, it is difficult even for hospital leaders to fully grasp the extent of quality problems within a hospital.

Much of the day-to-day activity to serve patients and the harm that sometimes results lies below the surface of the reports monitored by hospital leaders and trustees. A 2011 study compared various approaches to identifying and counting adverse events in hospitals using three tools on a comparable sample of patients. The study found that many tools underestimate the level of harm. Using only one method alone fails to detect most adverse events (Classen, et al., 2011). Many reports harking back to the 1999 Institute of Medicine (IOM) Report “To Err is Human” have noted that the health care payment system needs to change to align rewards with the quality of services provided. New payment models will lead to experimentation, such as the Alternative Quality Contracts introduced in Massachusetts. Smaller steps are also being taken to change payment, such as a payment bonus for meeting a certain quality threshold. These new arrangements will result in new work processes focused on patient outcomes and, in the short term, uncertainty of payment that will be difficult for some to navigate.

Nationally there is a movement to pay for performance, rather than for volume of services provided. Centers for Medicare and Medicaid Services (CMS) is implementing a value-based purchasing program (VBP) that puts 2% to 5% of Medicare reimbursement at risk, with the ability to earn the dollars at risk through metrics tied to clinical performance measures, mortality rates, implementation of safety processes, and patient experience data (Buckley, 2011). Private insurers are following suit. Payments are being tied to quality rather than quantity of services offered. Commercial insurers have also ‘frozen’ reimbursement rates, with any increases tied to performance. In 2011 WellPoint announced a new reimbursement system for about 1,500 hospitals across the country serving Blue Cross Blue Shield patients that focuses on 51 indicators of quality and safety.

Outcomes are being stressed, with indicators examining readmission rates, infection rates, and reported patient satisfaction (Bloomberg Businessweek, 2011; California Healthline, 2011). Health care of the future must include a delivery system that can provide safe, high-quality care; elimination of inefficient spending; and incentives for individuals to take action to improve their health. Leaders within the health care industry are and must continue to step forward if we are to make progress on goals to offer each American care that is safe, affordable, coordinated and based on scientific evidence. Many health plans have started to offer incentives for hospital trustees to obtain training and/or certification that will lead to thoughtful oversight of hospital vision, mission, strategic objectives and overall performance, including quality and safety

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