by Tony Chen
April 11, 2007 at 6:33 am
· Filed under Hospital and Health System CEOs, Policy Makers, Pay-for-Performance, Prevention and Health Promotion
Looks like Scott beat me to the punch on P4P. Scott aptly says that we have to define “pay” and “performance.” A small performance (i.e. adhering to a good process) deserves a small payment. A big performance (i.e. achieving real outcomes) deserves big payment. The problem is this: even if we decided that we should measure outcomes, which ones really make sense? If you read Matthew Holt’s P4P Roundtable summary last year, there are smart people all over the map on this. Yes, the trials and demonstration projects will continue to grow, and one day CMS may even make physician P4P mandatory. We will continue to get news from reputable journals that we should utilize P4P compensation approach. But my guess is it will still be such a small % of all of healthcare; we will still be talking about P4P as an emerging trend in 2012.
While we’re on the topic of incentives, I have a question for everyone. All of the energy/enthusiasm I hear around potential new hospital-related business ventures and extensions are related to prevention, wellness, and retail-based medicine. These new wave of ideas are all about how hospitals can engage and touch patients before they’re patients.
No hospital would admit this. I’m not admitting it either (I just heard this from a *friend*). How in the world are hospitals supposed to do this without losing a lot of downstream revenue? If hospitals are successful at preventing illness and complications and surgeries, we’ve essentially worked ourselves out of a job, right? I know that’s overstated, but somehow hospitals need to think about our purpose/identity in a different way.
VCR companies eventually have to sell DVD players. Cassette player companies eventually have to sell iPODs. Hospitals need to sell health as well as healthcare.
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Tony,
I spent 15 years working with & for hospitals, so I’m empathetic with your dilemma.
The choices are not easy. The situation has a lot of anologies to the number of competitors that hospitals have already been experiencing in ambulatory care. This is especially challenging when the competition is your medical staff.
You can:
* Ignore the market opportunities, hope it goes away, and deal with the disruption later on
* Look at the market opportunities as a new/separate line of business for you. Christensen argues in the Innovator’s Dilemma that this is virtually impossible to do from within the existing organization — that you need to set up a separate structure to pursue market opportunities that potentially threaten the mother ship. My experience is that this is correct, although I sense from reading your blog that your are far more innovative than the “average” hospital.
* Look for JV opportunities with partners
Vince
Just to on a side note, to your conversation a recent survey in Health Affairs of internist reports,
“although a large majority of respondents supported financial incentives for quality, a large majority opposed public reporting, especially reporting of individual physicians’ performance.” See www.ajfortin.com for more info.
A great blog.
Fred
tony wrote @ April 11th, 2007 at 7:56 pm
My pipe dream looks like this (don’t laugh):
have all hospitals within a community or city operate as a system/team. Imagine if all the hospitals in Chicago got together and figured out how to make Chicago the healthiest city in the nation. Yes, there would be trade-offs. But this becomes a huge point of differentiation for the city of Chicago in attracting new employers and businesses.
Tony, Interesting thought. Actually, Pittsburgh has almost done this. Problem was, it wasn’t planned by the City. What is emerging is a near monopoly with what appears to be overwhelming growth as it’s primary target. The system comprises a network of about 20 hospitals, 50 rehabilitation centers, about 350 doctors’ offices and outpatient clinics, nearly 40,000 employees and more than 4,000 physicians. It also provides behavioral, home health, and long-term care services, and offers commercial and government health plans. The quarterly gross earnings seem average about $1.5 B, but I’m not sure that Greater Pittsburgh qualifies as the heathiest city in the nation. Hopefully, when Chicago goes in this direction, it will be with YOU at the helm. By the way, you’ll like the CEO salary.
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