CIO Forum: Economics dictates that times are a-changin in U.S. healthcare

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ORLANDO, Fla.--Since healthcare delivery is fragmented, chaotic and too expensive, taming the chaos will require a new breed of leaders at every level, as well as a more uniform, systematic approach to providing patient care, said Nate Kaufman, during his keynote address of the CIO Forum, hosted by the College of Healthcare Information Management Executives (CHIME), in conjunction with HIMSS11. However, accountable care organizations (ACOs), if they are to come to fruition, must start with clinical integration.

“Healthcare’s new leaders must organize doctors into teams; measure their performance not by how much they do but by how their patients fare; deftly apply financial and behavioral incentives; improve processes; and dismantle dysfunctional cultures," said Kaufman, managing director and founder of Kaufman Strategic Advisors.

He stressed that the only way a health system will produce better outcomes and improve profitability is through standardization. Also, for those providers that are choosing to maintain status quo, the economics of the U.S. healthcare system will require change in the near future, so it is better to be at the forefront than behave in a reactionary manner to newly enforced mandatory policies, he added.

“Now is the time to start changing,” Kaufman said.

The current fee-for-service model within the U.S. healthcare system could soon be replaced with ACOs, he suggested. “In the past, to play on the healthcare playing field, you just had to put on the uniform, and you got maximum points by just providing a service, but the ACO is signaling that in the future, to play and get maximum points, you will need to have a team,” Kaufman said. “In addition to the team, providers won’t be able to just provide a service, but they will need to prevent readmission, reduce hospital-acquired infections and in general, produce improved outcomes, patient selection and reduce costs.”

Placing the proper people in each of the leadership roles of an ACO is integral, he explained, because it will be a failed house of cards without the “right people, standard protocols and the appropriate IT infrastructure.” However, the team can’t stop at formulation, as a review process needs to continually assess performance.

Kaufman defined these types of competencies as “clinical integration.” However, he cautioned that “successful ACOs won’t exist by 2012, as we won’t even know the return on investment at that point.” He also questioned whether if it was better to implement the strategy incrementally, or doing it incorrectly or not doing it at all. Yet, in 2016, Medicare will start penalizing providers that are not part of an ACO, and demonstrating quality through 80 percent reimbursements, as opposed to 100 percent.

To begin development on a clinically accountable delivery system, Kaufman provided some guidelines for both employed and independent physicians, including:

  • Digital connectivity of EMR with point-of-care protocols (with portals for submitting all encounter data as a traditional step);
  • Monitor cost and quality;
  • Primary care capacity (medical homes);
  • Engaged physician champions;
  • Evidence-based inpatient and outpatient protocols;
  • Programmatic approaches to chronic diseases;
  • Dedicated infrastructure, especially IT;
  • Performance-based rewards/consequences for providers;
  • Pilot testing on hospital employees; and
  • Collective negotiating for managed care contracting.

Physician leadership is a necessity in changing the healthcare system. “It’s all about execution. If we don’t have the right players, and we don’t have the right game plan, then we’re going to fail,” Kaufman concluded.