william p. pierskalla, ph.d. distinguished professor and dean emeritus
DESCRIPTION
“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 - PowerPoint PPT PresentationTRANSCRIPT
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“Improving Our Health Care Delivery:
New Appeals and New Ideas”
Innovations in Health Care Delivery
2006 ConferenceSponsored 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 ManagementRonald A. Rosenfeld Professor Emeritus
The Wharton School, University of Pennsylvaniaemail: [email protected]
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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?
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The current state of our health care system
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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.
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2006
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Why do I believe this?Because they will again become a
major political agenda item
• Costs• Quality • Technology• Access• Aging of Baby Boomers - 2011• Social Security/Medicare Financial
Crises
DRIVEN BY:
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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 pseudo-economically. 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 hands-on work at the institutional level of care delivery
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Where are we?
First: the crises areas:
• Costs• Quality • Technology• Access• Aging of Baby Boomers• Social Security/Medicare Financial Crises
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COSTS
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Each of them is named after one of my medications
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• 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
YEAR 2004
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TOTAL U. S. HEALTH CARE EXPENDITURES IN ACTUAL DOLLARS 1960-2004
y = 1214.7x2 - 19178x + 104759
R2 = 0.9924
0200000400000600000800000
1000000
12000001400000160000018000002000000
YEARS 1960-2004
EXPE
ND
ITU
RES
(in
mill
ions
)
1,877,600
Expenditures
Polynomial where x = 1,…,45 corresponding to 1960,…,2004
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Percent Change in Health Care Expenditures 1961-2004
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43Years
Perc
ent C
hang
e
Percent Change Year to Year
Average = 7.98% for 1985-2002
Average = 10.2% for 1961-2002
1960 2002
?
?
?
20101985
Introduction Introduction and implement. and implement. of ProsPaySys.of ProsPaySys.
Hey-Day years of Managed Care
Source: OECD Health Data 2004, 2nd Edition
8.2%
2004
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The Causes of Health Cost
Increases• Demographics• Income Level Increases• Insurance• Price Inflation / non Wages• Administrative Expenses• Factor Rents• Technologies
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Table 2: Accounting for the Increase in Health Costs 1940-1990
Factor Increase Due To Share of Total
Demographics 14 2 Income 37 5 Spread of Insurance 100 13 Relative Price Change 147 19 Administrative Expense 101 13 Factor Rents 0 0
Total Static Factors 399% 51%Technology 391% 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.
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Quality
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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.
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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”.
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Study Committee
• W. Dale Compton, PhD, Cochair, Purdue Univ.
• Jerome Grossman, MD, Cochair, Harvard
• Rebecca Bergman, Medtronic
• John Birge, PhD, Univ. of Chicago
• Denis Cortese, MD, Mayo Clinic
• Robert Dittus, PhD, Vanderbilt Univ.
• G. Scott Gazelle, MD, MGH
• Carol Haraden, PhD, IHI
• Richard Migliori, MD, United Resource Networks
• Woodrow Myers, MD, WellPoint
• William Pierskalla, PhD, UCLA
• Stephen Shortell, PhD, UC Berkeley
• Kensall Wise, PhD, Univ. Michigan
• David Woods, PhD, Ohio State Univ.
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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
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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 providersStaff cuts/workforce shortages impact safety, timeliness, access, patient-centeredness
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ERRORS
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OVERUSE
I’M HAVING SLIGHT STOMACH PAINS
REGULAR OR JUMBO 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 ANAPPENDECTOMY
WITH THAT?
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MISUSEBIZARRO 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.
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INEFFICIENCY
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The Broader Political and Economic Environment
The IDS
The Organization
The Care Team
PATIENT
A Patient-Centered Model of the Health Care System
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NOT PATIENT CENTERED
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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
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A Systems Engineering Agenda for Health Care Delivery—Selected Findings
1. Systems-engineering and business tools have improved quality, efficiency, safety, customer-centeredness 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.
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A Systems Engineering Agenda for Health Care Delivery—Selected Findings
3. Strategic use of other and more information-intensive 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
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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
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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
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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
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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
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So What Should OR/MS Be Doing?
• A great deal but far from what could and will hopefully be done in the future.
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Much More Research
• Better Data Mining in
Genomics/Proteinomics/
Drugs development
• More Powerful
Optimum- seeking
Nonlinear Algorithms
• Better Decision Analytic
Tools – Stochastic
Branching Processes
• Better Outcomes
Measures
• Integrated Models of the Patient-Centered Supply and Delivery Chains
– In the Home
– In the Outpatient Setting
– In the Hospital
– In Long-term Care
• Best Adaptive Processes to Determine Best Practices for Patient-Centered Care?
• Individual and Organizational Change
Some Examples
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Much More Applications
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DECISION SUPPORT SYSTEM USE & ISSUES
DECISION SUPPORT SYSTEM SYSTEMS WIDE-SPREAD USE
ISSUES
Operations Management Strategy Yes Medium Don’t know the questions to ask
Demand Forecasting Yes Low Limited Availability—don’t always like the answer
Capacity Planning Yes Low CostLocation Decisions Yes Low Lack of management understanding
Process and Layout Design Yes Consulting Acceptable systems and dataScheduling and Staffing Yes Medium High use by consultantsProductivity Yes Medium Future will require these types of
decisions (therefore systems)
Quality Control Data and Methods No Low-Med Large organizations support these systems
Health Status and Severity Assessment Yes Medium
Quality Assurance Yes HighTotal Quality Management Limited Low-MedPurchaser’s Perspective on Quality Market
ResearchLow Growing through e-health companies
Inventory and Maintenance Yes HighRegional Planning Yes High Government focus
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Clinical Decision Support System Use & Issues
Clinical Decision Support System
Systems Widespread Use
Issues
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
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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.
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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.