Health Care Insider: American Health Care Going ForwardJul 21, 2014
How will the Affordable Care Act, Medicare and Medicaid affect the progress of health care? Steven Lipstein is President and Chief Executive Officer of BJC HealthCare, one of the largest health care organizations in the nation. He discuses the challenges and opportunities health care providers and organizations face and the future of medicine and patient care. He also provides a thought-provoking comparison of health care resources, procedures and outcomes in different cities around the United States. Listen in as a leader in health care weighs in on the state of the system.
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Interviewer: We're talking with Steven Lipstein, President and CEO of BJC Healthcare, one of the nations largest Healthcare organizations. Steve, thanks for joining us. One of the things I want to ask you about, first off, is what are some of the big initiatives that BJC Healthcare that you guys are working on that you think are the most promising in terms of position your organization for the future?
Steven: I think right now, every organization in the United States that's in the healthcare space is working on three levels of different initiatives. One level would be what I call foundational or enabling initiatives. And those initiatives are where everybody is just trying to make medicine better for patients and families and make their organizations better, more effective in delivering those services. They may be working on more effective utilization of supplies or they may be working on improvements in labor productivity. Or they may be working in improving patient outcomes, improving patient safety. All of that is an attempt at making medicine better, and to make healthcare organizations more effective at what they do.
Then there are growth-oriented initiatives. And what we're seeing in the growth area is increasing hospital capacity, or renewing hospital capacity for a different kind of patient in the future. Which for those patients that are going to be in hospitals, they're going to be higher acuity services, more intense services. Retooling your facilities for a different kind of hospital capacity is one form of growth. Another form of growth is developing your physician and practitioner platform. Not only physicians but also other kinds of caregivers and organizing them into multi-disciplinary teams and thinking about they way they're going to provide services and take care of patients in the future.
And then I think the third kind of growth initiative is the new kind of facility, which really tends to be a multi-disciplinary outpatient either primary care of specialty care center. Where you can deliver specialty care services much more efficiently, in a much more patient centric way, away from the hospital environment. So those would be your growth-oriented initiatives.
Steven: Then when you think about your forward thinking initiatives, you're thinking mainly about how you're going to get paid in the future. So you're thinking about is your state expanding Medicaid, or are they not expanding Medicaid? You think about are you going to collaborate with other hospitals and other groups of physicians to achieve scale and a comprehensive offering or are you going to develop those services on your own? And so you're thinking about the future and you're thinking about the way that American healthcare is going to get financed and paid for, and how do you position your organization for long-term success.
But all of that activity really relates to how do you achieve superior outcomes for your patients and their families. And how do you do that by balanced investing in your human assets, which are your most valuable assets, your people? How do you do that with your investments with physical assets and how do you do that with the money that you deploy, in terms of producing superior outcomes and creating an environment in which healthcare can be more affordable for more people?
Interviewer: You're in Salt Lake City as part of the University of Utah Healthcare's Transformation meeting, kind of an internal meeting. One of the things you mentioned is you talked about the hospital in 20 years. Maybe talk about some of the things you talked about in what you see in 20 years?
Steven: I don't have a crystal ball that looks out 20 years, but when I think about 10 years from now, or even five years from now there are dramatic changes affecting healthcare. And they tend to be embedded in the new laws that effect American healthcare. The law that says we're all going to be meaningful users of health technology or electronic medical records, the Affordable Care Act, which creates new forms of coverage expansion, and ways for people to buy health insurance in ways they didn't buy health insurance in the past. The law that basically reduces Medicare spending, two times-once through the Budget Control Act, or the sequester, and another time through the American Taxpayer Relief Act or the Remedy to the Fiscal Cliff.
And so all health systems are going to be operating within constrained revenue envelopes and so essentially they have to reinvent themselves. And the journey that we are on for the next 10 years is what does that reinvention look like? It can be a very exciting time for American healthcare, unless you're afraid of change. And if you're afraid of change it'll be a very scary time in American healthcare. Change is not an easy or short term thing when the changes that you're introducing effect 800 thousand physicians in America, millions and millions of nurses, and 320 million people who live in our country, all of whom are going to be effected by the changes we're making in the American healthcare system.
Interviewer: Kind of the end of the independent practitioner though?
Steven: I don't like to think of it as the end of the independent practitioner. I think of it as the reinvention of the physician/practitioner role. Historically it was a caregiver: one patient, one doctor, one exam room, and a very isolated experience. Now what physicians are going to be able to do, they're going to be leaders of teams of healthcare professionals working with larger groups of patients but perhaps no less intimate. It can still be one caregiver, one patient. In fact, teams of caregivers may be more attentive to their individual patients than one doctor can be.
And so you have an opportunity to reinvent the doctor/patient relationship and that doesn't necessarily mean an end to private practice so much as it's an exciting time, especially for younger physicians who are at the beginning of their careers, to define what this is going to look like as they go through their professional lives.
Interviewer: You had a great quote today; you talked about "change is fun, especially if you're in charge." It made me think of academic medicine and a lot of conversations to the AAMC through the different entities about academic medicine positioning itself for the future. Can academic medicine survive in its current state? Organizationally, what are the things we're going to have to transform in our world?
Steven: I wasn't the one who said change is fun if you're the person in charge, it was actually someone else in a meeting that I attended last week and I actually worried about the statement because if you're in charge for a short period of time-two years, four years, or even eight years associated with two presidential terms-change can be fun because your creating new a different, and you hope better ways of doing things.
But with change on the scale we are contemplating in American healthcare there will be what I call residual liability. Which means there will be unintended consequences. Somebody said if we get it right for 80% of the people and we don't get it right for 20% of the people that's directionally correct and that's a good thing. In some circumstances, you might come to that conclusion, 20% of 320 million people is 64 million people or two times the size of the population of the state of California. That's not okay. And if the unintended consequences disproportionally affect the disadvantages people in our community that's the kind of residual liability I would have expected this president's administration to want to avoid.
So what I said was, if you stay in charge for a long time-and I have now been the leader at BJC Healthcare for 15 years-if you stay in charge long enough then you do have to deal with and respond to the residual liabilities of the changes that you made. And sometimes that can be the hardest thing to do for any leader is to undo your own decisions.
What worries me about the leadership at the centers for Medicare and Medicaid services is nobody tends to stay in charge for more than two, four or six years and therefore you don't stick around long enough to see the unintended consequences of the changes that you introduced. So that was my concern. Tell me again what your second question was.
Interviewer: Transformation of academic medicine, just the organizational alignments, and at Utah, we've got a single person who's the dean, who's the CEO, who's the senor vice president, kind of a vertical alignment but that's not the case everywhere.
Steven: No, that's correct. I think academic medical centers have a high calling: their mission of educating the next generation of healthcare professionals, their mission of advancing medical science, technology and creating new knowledge. And they do care for the sickest of the sick, and in many communities the poorest of the poor. That's high calling. So what we want to think about is how do we preserve those activities, those missions in an environment where everything around us in American healthcare is viewed as increasingly unaffordable and not necessarily responsive to the agenda's of higher quality, greater access to medical care, and more affordability.
So academic medical centers will need to be the leaders of change. They will need to find new pathways to success. Now some academic health centers are organized under the auspices of a university, where the university owns both the professional schools and the delivery system for doctors and hospitals. I've never worked in one of those organizations, so when I worked at Massachusetts General Hospital in Boston it was a separate hospital from the Harvard Medical School and it was run separately with its own board and its own leadership team. When I went to John's Hopkins the same was true. John's Hopkins hospital was actually established seven years before John's Hopkins University. And so the hospital was organized and operated separately, and even under that structure the hospital and the medical school found a way to enjoy top rankings.
And then I went to the University of Chicago, where again the hospitals and the medical school were separate, so I think there is an opportunity for medical schools and teaching hospitals to excel under different organizational frameworks. The unified leadership structure where you have one individual can be very effective if that one individual makes really, really good decisions.
But sometimes when the teaching hospitals and the medical schools are in separate organizational frameworks you have better checks and balances. So you have two separate boards and two separate leaders working to make sure that you don't disproportionally invest in physical assets or human assets or even in financial assets and that you do position yourself for long term success.
I have been fortunate in my professional life to work at organizations that were very highly regarded in the space of academic medicine, and I'm proud of what we were able to do at each of those institutions. I don't necessarily believe that one organizational structure or one leadership model works. I really do believe it's highly dependent on the people who fill those leadership roles.
Interviewer: Slightly different direction, at Utah we talk about the value equation and we describe that as quality plus service over cost. Do you have a similar value equation over at BJC or do you do that?
Steven: I know the quality plus service over cost value function, and clearly I believe in both the numerator and denominator. I'll tell you though where the ratio, I think, comes up short, and that is it sometimes costs more to produce the same patient outcome for someone who lives under disadvantaged life circumstances than it does to produce that same outcome for someone who lives in affluent communities. And that equation has never adjusted for socio-demographic status, and so I actually believe that it costs more for hospitals who serve disadvantaged populations to keep their readmission rates at the same level those hospitals that care for more affluent patient populations.
But what the federal government would say is that because it costs more to produce the same outcome, it's of lower value. And so therefore, for our own federal government to be saying that it's of lower value to serve disadvantaged patient populations and it's easier, we're going to make it easier with less financial penalties and more reward under a value based purchasing power paradigm. For people to want to work in places where it's easier to succeed, you will find not so much today's capital investment, but tomorrow's capital investment, tomorrow's human capital, and tomorrow's financial capital. It will go to those communities where the government says, "We're creating incentives for you to be successful here."
And there's no question, at least in my mind, that you can produce better health outcomes if you have among the nations leading physicians, and among the wealthiest patients, and the most education patients in your community. And there are communities that meet that characterization. So I think we need to be careful that the value equation of outcome and service divided by cost, that we don't inadvertently create a ratio of measurement that increases disparities in access to medical care because we don't recognize that it simply is more expensive to care for people who don't have life circumstances at home in which they can convalesce, manage their own pain, do their own self care, because they live in communities that don' have grocery stores, that don't have pharmacies, that don't have taxi cabs, or bus stops. They live in communities where you don't have neighbors because the housing vacancy rate is so high. And right now, because our federal government just will not adjust health outcomes or service levels for socio-demographic status, it makes it look like anybody who serves those patient populations is providing care of lower value. And I think that's wrong.
Interviewer: On a related note, so you were Vice Chair of the Board of the Patient Centered Outcomes Research Institute . . .
Steven: I still am.
Interviewer: Still are. Okay. So talk about it a little bit . . . You look at a hospital that might be in Scottsdale, Arizona verse a hospital in Detroit and even the way the patient perceives their care is going to be very different, I assume.
Steven: One of the great experiences I've had with the Board of Governors at the Patient Centered Outcomes Research Institute is for the first two years we held our meeting all over the county. And you got to see how really different healthcare circumstances are in New Orleans versus Seattle versus Los Angeles versus Manhattan versus St. Louis. We didn't come to Salt Lake, but we should have.
And you realize that different communities have different needs and so that a poor person living in New Orleans, who makes $10,000 a year in income, is very different from a $10,000 a year individual who lives in Denver, CO. What I like about Patient Centered Outcomes Research is that it really engages individual patients in the research paradigm. So individuals help us decide what are the important research questions to ask, how do we recruit patients into those studies-either clinical trials or their observational studies-how do we recruit people to participate in research? How do we get them to help us evaluate the intermediate findings, the interim findings? What do they mean? How should we refine our survey tools?
And then once we have this new evidence, how do we communicate it, how do we disseminate it so that there's a lot of uptake in both the clinician community and the patient community? Because in the end, what patient centered outcomes research is all about is improving health outcomes.
Interviewer: Right. When I think of patient centered outcomes . . . let's look at those two markets. Scottsdale versus Detroit. If I'm a patient and I have a knee replacement, my measure of success is, "Can I get back on the golf course?" Where if I'm in Detroit it's, "Can I get to the bus stop to get back into downtown?" Am I looking at it the right way?
Steven: I do think that given the might higher poverty rate in Detroit . . . the median household income in Scottsdale, Arizona is something like $72,000 a year. The median income in Detroit is something like $23,000 a year. I don't think there are a lot of Detroit residents who want to get back on the golf course. But I do think, when you look at hip replacement, do both populations have equal access to what I call pre-habilitation? Meaning you do a lot of strength conditioning in advance of your procedure so that your recovery period is optimal and you have a great outcome.
Do you have access to the physical therapy services that you need in Detroit? Do you have transportation to and from those physical therapy services? Do you have somebody at home who can do those exercises with you and keep you disciplined and on task? Do you have somebody who's going to help you scrub the surgical would site for five days with microbial soap so that you can decolonize the surgical site and avoid post-surgical infections? Do you have people who can help you buy groceries after your surgical procedure so that you don't have to risk dislocation by going to and from the grocery store, or to and from the laundry mat? Do you actually get enough time off work to convalesce?
I would argue that the circumstances for convalescence and recovery for the patient in Scottsdale are so much greater than that of the patient in a disadvantaged community whether it's Memphis, Detroit, East St. Louis, or East Baltimore. And so the idea that you would compare those outcomes even up and hold the providers equally accountable for the outcomes regardless of the patients' individual life circumstances, even if they are tremendously successful in producing that same outcome, they are likely to have to do it at higher costs, with more home care interventions, more health coaching, more trips to the physician, more payments for transportation.
And so because it's going to cost more it's still going to be judged of lower value. This is probably, in my mind, the most serious flaw in some of the programs that have come about as a result of the Affordable Care Act. CMS has the wherewithal to fix this. If they don't believe they have the wherewithal they should be in front of the legislature, the Congress, and the Senate, asking for change to the law.
Interviewer: So finally, a lot of our listeners are up and comers, trying to hit the thought leadership group, so when you speak to administrative fellows, or physicians who are looking to get into administration, what's your advice to the next generation of healthcare leaders?
Steven: I went to work at Emory University Hospital when I was a freshman in college. I was an evening ward secretary, ward clerk, on the 3-11 shift on Saturday and Sunday nights. And I loved it, I loved working in the hospital, I loved the patients that I met because I could help them. I couldn't take care of them, but if they needed a newspaper or they needed me to run down to the gift shop, I could do that.
The nurses were terrific. The nurses were these rational, calm, problem solvers. I mean, anything that went wrong the nurses were able to handle without the stress that I might have gone under at the time. So I'm working with the physicians on the floor, the nurses on the floor. You felt like you were making a difference in people's lives.
And so I went from college where I worked at Emory Hospital for three years to Graduate School of Health Services Administration at Duke and then I did a two-year fellowship at the Massachusetts General Hospital in Boston. Each experience was a learning opportunity for me. At least in the early part of my career, I would say I banked a whole lot more experience than money. And all I can say is it's worked out pretty well on the other end of my career.
But if you love what you do, and you do what you love, and in the beginning of your career you take opportunities that give you experience in managing people, in managing resources, and in solving problems, you'll have an opportunity to grow and develop. It's just a very exciting profession at a very exciting time. Not for the faint of heart, but again I think the young leaders in American medicine today will have a real opportunity to make a difference for good.
Interviewer: And you're optimistic about the future of medicine?
Steven: Always. If you think about it, the creation of new knowledge, if you think of advances in medicine, in 1965 when the Medicare program was enacted, at that time we couldn't replace your shoulders, your elbows, your hips, your knees. We couldn't rebuild your spine. At that time, we couldn't implant very much into your heart. We couldn't put in catheters, or pacemakers, or stints, or defibrillators. We hadn't discovered statins yet. If you had a stage three diagnosis of cancer in 1965, for many patients, it was almost immediate and certain death. We have been able to deal with so many of those issues in a short 50 years.
Steven: And so when you think about how far we've come to improve the quality of life and what that means for our fellow human beings, it's just very, very invigorating. Yes, every generation is faced with challenges. Ours is no exception, but the people who are leading American healthcare for the next 50 years, think about how much different this is going to look in 2054 than it looks now. I don't think I'll be here to see it, but it will be very, very different indeed.
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