The Value Proposition 1: Don’t Call Them “Customers”?

November 26, 2012

Last week, millions of people rushed to stores on “Black Friday,” in search of “value.”  In that context, value simply means how much do I get, for how much money?  Sometimes the calculation is straightforward: a video game for $75 is a better value than the exact same game for $100.  Then there might be a simple trade-off.  A mixer with 10 attachments for $200 vs. one with 7 attachments for $180.  Hmm, the per-attachment cost is certainly lower with the 10 attachments, so the extra $20 is probably worth it.  Unless I’m never going to use the additional 3.  So it’s a better value for some people, but not others.  Going one level deeper in complexity: I know I want the 10 attachment version, and I can get it for $180 if I go to the store at their “early bird” opening at 6 am.  Is it worth it for me to get up early to save the $20.  Not if I’ve been working 12 hour shifts all week and this is my one day to sleep in, but it might be if I have to be up anyway.  And so on.

The point of all of this is that value can be a deceptively simple concept.  We’ve all started talking about it, and many people can blithely define it as quality÷cost, as we see on some of the ID lanyards on campus.  But when we start to dig it becomes more complex.  We’ll explore this all in future posts.

But for now, I want to ask – did my discussion of buying video games and blenders cause an instinctive “what can this possibly have to do with health care response”?  Be honest – I’m sure it did for many.  Yes, we’ve started to talk about value in health care, but it’s been a rather hollow, rote discussion, almost as if we hope that by saying the words we won’t have to embrace the concept, much less deliver on it.  We’ve been mostly talk, little action.

We physicians and other providers take care of patients, with all of the professional obligations that entails under the Hippocratic Oath and various laws and customs.  But we also deliver a service, health care, to customers.  There, I said it.  Many of us have an almost visceral reaction to that word, or the equally obnoxious “client.”  Now, I want to be clear – I do not mean to suggest that there is nothing different between being a consumer of health care and any other product or service.   There are absolutely many unique things about being a patient (and for that matter, between being a health care provider and being a chef or a financial planner or any other kind of service provider).  I do suggest that there are also commonalities, and if we do not start to acknowledge those commonalities – the fact that we serve both patients and customers – our ability to serve our patients will be significantly diminished, because we will lose them.

Here are a few brief illustrations.  Until a few years ago, a not uncommon cause of complaints in the ER was from parents saying we did not perform a test or provide a treatment they thought was necessary – why didn’t they do a CT on my child with abdominal pain, for example.  I NEVER saw one complaint that we had done too much.  Yet in the past few years, those complaints have become common – if a CT is done to rule out appendicitis and it turns out to be negative, the parent complains that it was “unnecessary.”  What has changed?  Mainly co-pays.  Families are now beginning to ask if what they are paying is worth it: what is the value?  We also hear from primary care providers within our own system that families ask to be referred to outside providers, because they receive much higher cost sharing from our hospital-based clinic structure.  It’s not that they don’t think many of our specialists are outstanding, they just aren’t sure they are getting anything more, or enough more to be worth the extra cost.  Similarly, the family of the child getting the CT is undoubtedly thrilled that their son or daughter does not have appendicitis, and they may be very grateful for the care received, but wonder if it could have been done some other way at lower cost.

We also need to keep in mind that our customers may not be our patients.  Increasingly, choices to families are being limited by narrow network plans and other types of arrangements.  It’s the one buying the service who is the customer.  Having great quality doesn’t help anyone if they can’t access it because an employer decides our services do not provide enough value, and they steer their employees to other systems.

(Perhaps we just need to get over our linguistic sensitivities.  Patient comes from the Latin patientem, “one who suffers.”  That describes some of the people we care for, but not necessarily all of them.  Children seeking well or preventive care are probably not suffering.  Moreover, if a child comes in with a condition and we treat it, I hope they’ve stopped suffering even if they remain our patient.   Customer has an interesting etymology, from the Latin consuetudinem, meaning “usual, or ordinary.”  In English, the word customer was first used to describe someone who collected “customs”, which referred to a usual, or routine, fee on goods.  It later came to be broadened to mean anyone with whom one had dealings.  But the Latin root itself is derived from com- (“with”) and  sui, meaning “self”.  That doesn’t seem too threatening to the special relationship between health care providers and those they care for.  And client comes from the Latin clinare, “to incline or bend” – one who leans on another for protection.  In the Latin it referred to someone under the protection of another.  That seems suitable, too.

Enough digression.  My point is this: we take care of patients and serve clients or customers at the same time.  In the actual provision of care, I will always be thinking about the patient in front of me and his or her medical needs.  But I also recognize that they are not just looking for quality care, they are looking for value.  If our care is going to cost more, the difference in quality has to be worth it to them, or those people will go somewhere else.  We will have lost both a customer and a patient.  And I think in that case, both they and we will suffer.

Obamacare and You

November 15, 2012


As you can tell from the fact that ads for Menard’s and Peter Francis Geraci have replaced those for Romney and Obama, the 2012 election is over.  Pundits will continue to debate the effect on the political landscape and the so-called “fiscal cliff,” but one thing seems pretty clear: the Patient Protection and Affordable Care Act – PPACA, aka “Obamacare” (a term now embraced by supporters as well as opponents) – will continue to be enacted essentially as planned.  It seems like a good time to recall what effect the law will have on pediatrics, and particularly pediatric specialty care.

Coverage:  The law already prohibits exclusion of children under 19 years of age for pre-existing conditions (this prohibition will expand to include all people in 2014).  Additionally, children up to 26 may be included on their parents’ family policy, even if they are married and otherwise independent.

Also beginning in 2014, all people must have health insurance or pay a penalty (this is the hotly contested mandate that was upheld by the Supreme Court this summer).  Achieving this expanded coverage occurs through 3 primary mechanisms.  First, all employers with more than 50 employees must offer insurance, with subsidies for those for whom their share of the cost would exceed a certain percentage of their income.  Second, each state will have a health insurance exchange – essentially an on-line insurance market – where individuals not otherwise provided with insurance can purchase it.  The idea is that individuals, by working through the exchange, will be able to have access to the lower costs usually associated with group purchasing.  Moreover, there are subsidies for individual purchasers who earn up to 400% of the poverty level.  Finally, there is a provision to expand Medicaid to cover all individuals up to 133% of the poverty level, with the federal government paying the full cost of expansion (at least initially).  There are also provisions to continue the CHIP program and streamline Medicaid enrollment.

Exactly what the impact will be for children here in Wisconsin is unclear.  We already have the second lowest rate of uninsured children (after Massachusetts, which as you know already has a state-level version of this law).  While Gov. Walker has not yet made a decision about whether Wisconsin will participate in the Medicaid expansion, children up to 133% of poverty level are already covered by WI Medicaid.  There is some speculation that some people may lose their employer-provided coverage (since some employers may find it preferable and less expensive to pay the penalty than to provide the coverage); this could lead to at least some of those children shifting to Medicaid, but given the already broad Medicaid coverage here, the magnitude seems likely to be small.  Similarly, Wisconsin has not announced whether it will create its own exchange or allow the federal government to do it; the deadline for a decision is Friday.  One way or another, though, we will have an exchange, and the benefit levels are likely to be similar regardless, so I doubt it will matter a whole lot to us providers.

Benefits:  Annual and lifetime caps on “essential health benefits” have already been removed.  This has been helpful to the practice, as patients with high cost conditions (e.g., cardiac surgery, medically-complex special needs) who previously had move onto Medicaid when they exhausted their benefits can now remain on commercial insurance.

PPACA also calls for preventive care, including periodic health maintenance visits and vaccines, to be covered with zero cost-sharing.

Payments:  The direct impact of PPACA on payments to providers is modestly positive.  There is a 2 year provision for Medicaid payments (including those made through Medicaid managed care) for certain primary care services to be covered at a rate at least 100% of the Medicare rate.  Among the services are Evaluation and Management CPT codes 99201-99499, which includes not only outpatient but inpatient and emergency E&M codes.  Interestingly, pediatric subspecialists are among those classified a primary care providers for this purpose.  However, the states are not necessarily required to increase capitation payments to HMOs to cover this, leading to the possibility that an increase in the payment rate for some codes may lead to pressure to reduce the rates for others.  Also, in many cases our payment rates are already at 100% of Medicare.

Workforce:  There are several provisions that promote the “medical home,” which provides us with interesting opportunities to partner with primary care.  Also, the law creates a new loan repayment program, with $50 million in annual funding, providing up to $35,000 per year for 3 years for people going into pediatric medical, surgical,  and mental health subspecialties.

Research: PPACA created the Patient Centered Outcomes Research Institute (PCORI), which offers opportunity for funding of clinical effectiveness studies, an area of active interest here, and important in advancing the quality of care.  Not only does PCORI remain, but so does its funding, which comes from a per-enrollee fee paid by insurers into the PCORI Foundation.

Those are the highlights.  If you are interested in more details, a summary from the AAP, and another from Foley and Lardner, are good starting points.  Overall, the impact on our practice – and our patients – is likely to be positive.  But as is often the case, the legislation is only a starting point; regulations implementing the legislation will determine much of what actually happens.  Now that the fight over the law itself is over, the fight over the regulations can begin.

3…2…1…Blast Off

November 6, 2012

Saturday (aka D-Day, Epic go-live).  Biking in at 7 on a beautiful if chilly fall morning, it felt like the first day of school.  (Admittedly I was a bit of a nerd, and always looked forward to the start of school.)  And indeed, the mood was a lot like that: excitement mixed with anxiety, a high level of energy in part from having lots of people around that maybe you hadn’t seen in a while (ASCs seemed to be coming out of the woodwork) and in part from all the food lying about.  And of course, a new toy: Epic.

Overall I have to say, a fantastic day.  Personally, I saw that my modest investment in personalization and practicing in the playground paid off; it took me far less time to get up to speed than I had feared, and Epic wasn’t so scary after all.  Sure there were lots of small things, of varying impact ranging from minor annoyance to potential lost revenue, but some of these were fixed literally as I watched.  From the larger perspective, I couldn’t have been prouder to be a part of this.  A few observations:

  • An enormous number of dedicated people high on the mood elevator.  People were almost giddy about how well things seemed to be going.  Even those who came in for atypical weekend clinics and elective OR cases, willing volunteers to be in the first wave assault
  • Providers and staff remained focused on the thing that matters most – providing the best care and experience for patients and their families
  • Huge leadership shadow – Peggy and her direct reports in the hospital in the middle of the night, going around checking on everyone; Mike Naumann, Stephanie Lenzner, and their legions of people demonstrating calmness and optimism despite what must have been anxiety of the pants-wetting variety
  • An incredibly well-planned support system, one that has to be among the best practices anywhere
  • Families were patient and understanding about delays and hiccups.  Some shared with me that they had their own experience with an EHR at their providers and were excited to see Children’s embracing it. 

Monday.  Hmm, this was supposed to be stabilization, but it felt more like destabilization.  Everyone knows the story – unplanned downtime for 6 hours just when we had hoped to be ramping up and building on the great weekend experience, then persistent access and stability problems, all on top of the expected relatively minor but nonetheless troublesome glitches.  The mood elevator seemed destined to go into negative territory.  And yet….

  • Once again, there was an abundance of goodwill among all of the providers and staff – assuming good intent – despite the enormous strain of switching to paper, downtime recovery, lost work and set-backs, and the uncertainty of “is this going to happen again tomorrow?”  The ED handled a higher than average census, the OR dealt with a full load including a Berlin Heart case, Oncology clinic managed a number of sicker than usual patients – but everyone I saw as I went around said “We’re doing fine – we’re figuring it out.”
  • We had a few things to learn about how to handle system downtime and the best ways to communicate, but by and large that support system was perhaps even more effective than over the weekend.  A new support area for downtime was set up literally in minutes.  Communication up and down the chain was smooth and effective.  Work arounds were being developed and shared.
  • As always, we did what we always do – we put patients and families first.

Tuesday.  So far so good.  Perhaps we can just forget about yesterday and call a do-over.  But I hope not, because I want to remember the resilience and determination I saw, the fact that despite everything the mood elevator never went below “curious.”  Which is always the best place to start.

Please feel free to share your comments about how your experience has been so far.


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