April 29, 2013

The American Hospital Association (AHA) has just released a report that describes the strategies that will help its nearly 5,000 member hospitals succeed in the value-based healthcare environment.  This report, Metrics for the Second Curve of Health Care, will be of interest to all anesthesiologists who want to understand and meet their hospitals’ needs—and that should include all anesthesiologists who work in a hospital.  Whether you have held the anesthesia franchise at your institution for decades with no competition, or whether you are seeking ways to improve or even launch a relationship with a hospital, you will benefit from knowing administration’s goals.

The title of the new AHA report comes from futurist Ian Morrison’s “first curve,” the current volume-based healthcare payment environment, and “second curve,” the coming value-based market.  It is a sequel to the AHA’s 2011 synthesis of interviews with hospital and health system leaders entitled Hospitals and Care Systems of the Future.  The 2011 publication illustrated Morrison’s first and second curves in a graphic that is applicable not just to hospitals, but also to anesthesiologists:

American Hospital Association. 2011 Committee on Performance Improvement, Jeanette Clough, Chairperson. Hospitals and Care Systems of the Future. Chicago: American Hospital Association, September 2011, p. 10.

Physical-hospital “collaboration,” “partnerships” and “realigned incentives” encouraging “coordination” stand out on the chart above.  Those strategies are at the top of the AHA’s “Must-Do List,” a set of strategies that hospitals should pursue while “living in the gap” on the way to the second curve.  The first four of the ten must-do strategies were identified as major priorities:

• Aligning hospitals, physicians, and other providers across the continuum of care
• Utilizing evidenced-based practices to improve quality and patient safety
• Improving efficiency through productivity and financial management
• Developing integrated information systems
• Joining and growing integrated provider networks and care systems
• Educating and engaging employees and physicians to create leaders
• Strengthening finances to facilitate reinvestment and innovation
• Partnering with payers
• Advancing an organization through scenario-based strategic, financial, and operational planning
• Seeking population health improvement through pursuit of the “triple aim”

The follow-up report expands on the four top priorities and sets forth performance metrics that will allow hospitals to “identify clinical, financial, cultural and process improvements; incorporate appropriate incentives; and evaluate results” as they move toward the second curve.  (Metrics for the Second Curve of Health Care. Health Research & Educational Trust, Chicago: April 2013, p. 5. Accessed at www.hpoe.org.)

The metrics listed under the first strategy, Aligning hospitals, physicians, and other providers across the continuum of care, are organized under the following categories:

1. Percentage of aligned and engaged physicians;
2. Percentage of physician and other clinical provider contracts containing performance and efficiency incentives aligned with ACO-type incentives;
3. Availability of non-acute services;
4. Distribution of shared savings/performance bonuses/gains to aligned physicians and clinicians;
5. Number of covered lives accountable for population health (e.g., ACO/patient-centered medical homes), and
6. Percentage of clinicians in leadership.

Opportunities for anesthesiologists abound.  The entire anesthesia department can readily be aligned with the hospital in a structural relationship that encompasses strategic collaboration and even financial interdependence.  The anesthesiologists can be the first medical staff members to be parties to contracts containing performance and efficiency incentives.  Reducing surgical infections and other operative complications and increasing operating room utilization are already familiar measures.

Given access to hospital data in an integrated information system, most groups can command enough analytical ability to combine the institution’s data with their own and develop episode-of-care cost models that will lend themselves to bundled payments, ACO participation or other forms of shared savings.

The first metric under the fourth bullet item, “Distribution of shared savings," is “All clinicians’ performance is measured and they receive benchmark data on performance against peers.”  Many anesthesia groups engage in measurement and benchmarking exercises that they can share with the facility—or better yet, they can leverage their own experience and knowledge to help the facility measure and use benchmarking data across departments.

Under the final bullet item on the list above, Metrics for the Second Curve calls for “active clinical representation at the leadership or governance level (30 percent or above).”  ABC Alerts and Communique articles are but a small sample of the universe of articles exhorting anesthesiologists to serve as hospital leaders.  Anesthesiologists know their hospitals because they spend their working days in them.  Many have MBAs or medical management degrees and an ever-growing number hold ASA’s Certificate in Business Administration, and even more have experience as leaders of the OR.  The 30-percent target may give anesthesiologists additional entrée to leadership positions within the hospital.

Like the clinical representation metric noted in the preceding paragraph, the metrics in the category “Effective measurement and management of care transitions”  under the second major strategic imperative, Utilizing evidenced-based practices to improve quality and patient safety, offer potential benefits to anesthesiologists beyond the hospital’s goodwill.

To date, outcomes data in anesthesiology rarely cover time frames after discharge from the recovery unit.  Tracking of patients almost never extends past a phone call shortly after discharge from the hospital.  Working with the hospital on “use of multidisciplinary teams, case managers, health coaches and nurse care coordinators … for follow-up care after transitions” may provide a path toward better information on longer-term patient outcomes such as chronic post-operative pain.

The third of the highest-priority strategies is Improving efficiency through productivity and financial management.  Here again, the anesthesia group is a valuable partner in managing the OR schedule for optimum throughput, in developing data on the cost of episodes of care and in pursuing targeted cost reduction goals.  Continuous process improvement, clinical care standardization and reduction of variation in patient procedures all contribute to productivity improvement, and are all within the capabilities of most anesthesia departments.

The third strategy, as laid out in Metrics for the Second Curve, offers a good illustration of the differing expectations for “transitioning in the gap” and being at the second curve.  While in the transitional phase hospitals will have:

• Limited data collection or analytics or limited ability to accept risk-based payment;
• The ability to track episode costs in certain care settings or for certain episodes;
• Initial data for quality improvement interventions (Lean, Six Sigma, etc.), and

other intermediate preparations for a value-based environment, by the time they arrive at the second curve, the corresponding metrics will be:

• Measuring, managing, modeling and predicting risk using broad set of data across multiple data sources;
• Tracking episode of care costs across every care setting and a broad range of episodes; and
• Implementing process continuous quality improvement initiatives across the organization with demonstrated, measurable results.

Similarly, the evaluation metrics for the fourth of the ten strategies—Developing integrated information systems—call for “limited” data-mining and modeling capabilities during the transitional phase, and for “advanced” data capabilities to support clinical and business decisions across the population in the second curve. 

The anesthesiology groups in several institutions have proven themselves so adept at data collection and mining that they have been asked to work with the hospital information technology department to implement systems on a broader scale.  This sharing of expertise is potentially of enormous benefit to the institution:  “literacy, cultural, and work flow barriers were much more critical than the cost barrier to successful implementation,” the interviews conducted with AHA members who had installed IT systems revealed.  (Hospitals and Care Systems of the Future at 17.) This is another example of how anesthesiologists can create value for a hospital living in the gap.

Strategies five through ten suggest additional intersections of anesthesiologists’ resources and hospitals’ needs, and the AHA has announced that there will be more published reports forthcoming.  There are many more noteworthy ideas in the first two reports than we can cover in this Alert, and we recommend that readers’ whose interest has been ignited read the AHA reports in full.  We believe that aligning anesthesiology groups with their hospitals’ strategies for succeeding in the value-based environment is one of the most important topics in anesthesia practice management, and we promise to bring you further summaries of thought leadership on the issue.

With best wishes,

Tony Mira
President and CEO