When healthcare resembles cheesecake

It seems that Obamacare has people talking in the mainstream media about healthcare innovation--this is GOOD. Discussions about funding and about service delivery can be found in the daily news. The question of “if healthcare delivery will change” is no longer seriously on the table.

Payors and providers are already doing business differently. This post will look at healthcare reform and the objections to the Affordable Care Act through the lens of Dr Atul Gawande and The Cheesecake Factory. His article, BigMed, was published in the New Yorker.

People do not seem to be talking as much about medical education, managing change for providers, or about the effects of accountability.

In the current fee-for-service model the goal is to deliver as many billable services as possible. In the emerging per-member/per-month (pmpm) model the goal is to use less money than is available. PMPM shifts the risk of over-spending from the payor to the provider. The initial goal is to deliver as many low-cost services as possible; the old model focuses on the delivery of expensive services to promote increased billing. The new model encourages outreach, screening, prevention, and care coordination for the most complex cases.

One of the new realities of healthcare finance is that profits will come from savings in service delivery. Not from delivering more services. A floor is established for patient care through the use of outcomes. Meet the outcomes under budget and pocket the difference.

Steve Denning, author of RADICAL MANAGEMENT: Rethinking leadership and innovation, wrote a rebuttal in How Not To Fix US Health Care: Copy The Cheesecake Factory. Denning opposes a view of healthcare as routine and reducible to discrete functions; many of us would agree. However, reality is that most care is routine and can be flow-charted.

This rebuttal is built on the assumption that competition will enforce efficiency. While this may be true in larger markets, it is less true in smaller markets where there is much less competition, and even functional monopoly. It also supposes that there is current accurate information about the competition available to inform consumers of their choices.

Denning gives us the following model to organize the healthcare umbrella:

"As Clayton Christensen and Jason Hwang pointed out in their book, The Innovator’s Prescription (2009), the first step in making some sense of the US health care system is to get clear on “what is the job to be done?” They distinguish three very different “jobs to be done” in health care organizations:

Solution shops, which are organizations structured to diagnose and solve unstructured problems. These require skilled experts who deploy expertise, intuition and analysis to diagnose and find solutions to complex problems. An example would be Gawande’s elderly woman who fainted and fell: the first task is to figure out what is her problem.

Value-adding processes: organizations which take things that are broken and turn them into higher value things. Both the problem and the solution are largely known. The challenge is to deliver the solution efficiently and effectively. Knee-replacement surgery would be an example where a value-adding process is appropriate: the problem and the solution are largely known.

Facilitated networks are arrangements in which people exchange things with each other. Chronic care of diseases like diabetes are best handled through community-based networks. It is known what needs to be done: it’s mainly about getting patients to do it."

One place where the factory model is being used in healthcare is in the use of hospitalists. “Back in the day...” primary care doctors admitted patients to the hospital and then managed care for their own patients; this on top of their outpatient duties. In order for physicians to have more control over their work schedules the position of hospitalist was created. Hospitalists admit patients for inpatient care and manage routine care, coordinating with specialists as necessary. Inpatient care is an example of Christensen and Hwang's value-added process.

This new system offers benefits for physicians. Greater flexibility in scheduling for all physicians in a community becomes possible when inpatient care is carved out. A career ladder is built as new physicians work off loans, gain experience, and consider where they want to practice.

While there are benefits for physicians, patients may have different experiences. Hospitalists are often early career professionals with little experience independently managing patient care. This can lead to uneven care, and mistakes do happen. Continuity between hospitalists may also suffer as each doctor continues to think of themselves as an independent practitioner, rather than part of a team. Adding a supervisor and a coordinator—a team leader—to the mix could add quality control and reduce patient dissatisfaction (I have a couple horror stories that would illustrate a lack of quality).

Dr Gawande introduces a career ladder. Everyone he talks with has worked themselves up the responsibility food chain, with presumably greater rewards of autonomy and pay. Too often new employees expect to start at the top. But even experienced workers entering new work sites or new careers start at the bottom. Even professionals, like physicians and mental health providers, land in this trap.

To support a career ladder mentoring and supervision are required. This equates to the quality control function of team leaders as described by Dr. Gawande.

Popular perception of professional education is out of step, often setting up unrealistic expectations by students and early career professionals. Graduate and professional schools might consider increasing transparency in how career progressions happen.

It seems to me that folks are dug-in around the issue of not changing the current system. Yet, I've heard few people, providers, patients, or payors, express satisfaction with what we have. With an eye to tweaking the hospitalist model in routine inpatient care by adding a seasoned physician as team ladder increasing quality of care, reducing costs, and promoting positive patient outcomes looks easy to achieve. Bring on the ideas from people who think about the systems they work with; this is where we can get to the outcomes of the Affordable Care Act without selling our soul to the bean-counters.