uft-a - The Business Case for Quality: A Unified Field Theory Applied to Health Care Alice G. Gosfield P.C. line_2px.gif (105 bytes) The Reinertsen Group

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Latest Issues

We have added this guide to Latest Issues to enhance its utility. We now list developments as they arise, but group them by topic area. We then link to the relevant place in the Latest Issues discussion. Topics include (1) P4P, Payment and the Business Case for Quality (72 issues); (2) Transitioning to A Higher Value System (33 issues) (3) Outcomes and Report Cards (9 issues); (4) CPGs and EBM and Measures (22 issues); (5) Pilots and Demonstrations (22 issues); (6) Legal Issues (33 issues); (7) Quality Generally (36 issues); (8) Medical Staff Issues (21 issues); and (9) PROMETHEUS Payment® Model (14 issues). Some entries appear under multiple headings because they have multiple implications. Items still appear in reverse chronological order with the most recent at the top. You can simply scroll through and browse.

  1. P4P, Payment and the Business Case for Quality
  1. Transitioning to A Higher Value System
  1. Outcomes and Report Cards
  1. CPGs and EBM and Measures
  1. Pilots and Demonstrations
  1. Legal Issues
  1. Quality Generally
  1. Medical Staff Issues
  1. PROMETHEUS Payment® Model

The drumbeat for insurers to move to value-based payments cannot be ignored. However, both experience and expertise at the health plans which are touting their programs are widely variable. A recent survey reports that 82% of health plans consider the development of new payment models a major priority. They are, however, all over the ballpark in what they are doing. Many of the national plans now claim to have many ACO projects in the works, although these vary widely as well. Almost all of the new value payment propositions that are not mere pay-for-performance turn on some concepts of bundling budgets or bundling payments. Typically, providers are paid in the ordinary course, with a gainsharing bonus available based upon reconciliation at some pre-determined point in time. The contracts that create these arrangements are the most critical foundation of potential success. As Medicare moved into this arena with the Bundled Payment for Care Initiative (BPCI) they engaged consultants to provide contracting advice. Mitre and Brookings acknowledge in the Foreword to their material their extensive reliance on Alice's input and reviewpdf image of their document. The Manual is oriented around the Medicare program, but essentially only highlights what is necessary to make one of these bundled payment contracts work.


In May 2012, Bailit and Burns found only 19 non-federal bundled payment programs anywhere in the countrypdf image and nine of those were PROMETHEUS Payment® pilots. Much of the potential in bundled payment is just that--potential. There is very little experience with it. In their update one year later, Bailit and Burns found five of the original pilots had abandoned ship, two were still doing observational studies, and three were still developing bundled payment programs. The new report focuses on two separate Blue Cross programs as well as the Remedy Partners' role as conveners of Medicare BPCI pilots. Key success factors for the non-federal bundled payment programs were (1) commitment from top leaders both in the plans and among the providers, (2) adequate resources for program design, administration, and provider contracting, and (3) an open mind to new ideas. The latter also includes open communication and a collaborative spirit. "Take it or leave it" contracting will not lead to success.


The rapid rise in the employment of physicians by health systems has been repeatedly noted. A recent survey by yet another recruitment company found that 70% of health care leaders say physicians are approaching them for employment. Yet, the data has also consistently shown that this is a money losing proposition for the hospitals in many ways, in part because once employed, the hospitals do not facilitate the physicians' clinical integration or undertake any effort to actually improve value. (See "Informed Consent to the Ties That Bindpdf image") In "Four Top Complaints of Employed Doctors", newly employed physicians complain about (1) being "bossed around by less educated administrators;" (2) not being able to make decisions about staff and personnel; (3) having less authority over billing and charge coding; and (4) being forced to use new equipment and technology. In addition to the efficiencies of many of the organizations now employing physicians, the consolidation in the industry is raising other concerns with respect to provider power and negotiating with plans. It is not hard to imagine that many of the employment strategies will unravel. We think a hard drive toward clinical integration might save some of these transactions.


If improved value is a primary goal of the widespread changes in health care, it would seem self-evident that best practices as described in evidence-based clinical practice guidelines should consider costs. This has been a controversial issue going all the way back to the 1992 publication by the Institute of Medicine on "Guidelines for Clinical Practice," where Alice participated as a committee member. There were fierce debates then as to whether costs should be taken into account. The ultimate published desirable attributes of clinical practice guidelines and medical review criteria did not include cost. In 2011, the IOM published new standards for developing trustworthy guidelines, but those are predominantly about the development process with very little about content except for the quality of the evidence relied on. Recent studies show that only half of medical societies take cost into account when they create clinical guidelines to which they expect their members and others to look in delivering care. One of the fundamental principles of UFT-A is to create payment models that reflect what science calls for to treat patients for their specific conditions. Still further, the recent publication by Catalyst for Payment Reformpdf image and the Health Care Incentives Improvement Institute, Inc. (HCI3) calling out the extent to which provider charges remain secret, and state laws do not support transparency, illuminates the extent to which the health care system has "ostrichized" itself regarding provider charges, let alone costs. It is remarkable that when the PROMETHEUS Payment® Design Team wanted to model budgets based on the cost to deliver care in accordance with good clinical practice guidelines, no provider, health plan, specialty society, or researcher could produce such information. If we are serious about producing valuable health care at reasonable cost, how can guidelines remain agnostic to cost?


We have long taken the position that returning "time and touch" to physician-patient interactions will improve quality and efficiency. Interestingly, a new study demonstrates that physicians are losing 45 minutes a day as a result of inefficient communication systems while hospitals are losing $8.3 billion annually due to the use of pagers and outdated communication technologies. Outmoded technologies steal time in other ways. They were also found to contribute significantly to increased patient discharge times, which averaged about 101 minutes. Challenges cited by those surveyed included, in addition to the inefficiency of pagers, lack of wi-fi availability, inadequacy of email, and the inability to use text messaging. Overall, the clinicians surveyed said they spent 45% of their time with patients while more than half of their time was spent communicating and collaborating with other clinicians or using technologies. Finding "time and touch" is a fundamental challenge, the resolution of which can only improve quality and the patient experience of care.


In a recent posting on the Health Affairs blog, Francis J. Crosson, MD and Larry Casalino, MD made the argument that physician practice satisfaction is an important component for change in the health care system. Much as we have been saying since we launched this website, physician engagement will be the key to substantial change and that engagement is not possible if physicians are spending their time battling barriers to "time and touch." In the last analysis, though, as Alice commented on the Health Affairs blog, until payment models which do not perpetuate the hamster wheel of fee for service are predominant in health care, optimal physician satisfaction will lag.

We have long touted the value in using all the members of the health care delivery team at their highest and best use. Recent data demonstrates that effective teamwork in high-performing primary care practices improves professional satisfaction. With appropriate changes, outcomes improve and so does the work environment. At Spectrum Health, a multi-specialty setting, the commitment to multi-disciplinary teams has become fundamental to their culture. At Spectrum, if you do not implement the team concept, you will be asked to leave the group. This approach is part of what we have taken into account in our Clinical Integration Self-Assessment Toolpdf image where true clinical integration expects teamwork and drives culture in which physician satisfaction and the value of care can thrive.


As many providers struggle with transition to new ways to deliver care, they are often skeptical that the five UFT-A principles can reap real results, whether we are spreading the word or others are in different ways. But, increasingly there are positive reports from the field about results achieved by practices that really are doing things differently. In a recent report in Health Affairs, a physician practice in Miami, ChenMed, tales full risk capitation from Medicare Advantage for the vast majority of their patients who are in turn high risk, complex low to moderate income patients. They have produced remarkable outcomes for this very demanding and difficult population with significantly decreased expenses. Their hospital days per 1,000 at 1,059 for 2011 were fully 654 days below the national average of 1,712. They have blood sugar control in 76% of their diabetic patients, 73% rate of eye exams for those patients and more. How have they done it? They spend more time with their patients, for one. Their primary care physicians have panels of between 350-400 patients, far less than most concierge practices. Their physicians see 18 patients a day as compared to the 30 patient average for most primary care physicians. They survey 30% of their patients every day for satisfaction. They have combined a range of physician, dental, ultrasound and acupuncture services in their 6,500-10,000 square foot offices, offering convenience and access. Top tier satisfaction scores for most industries are in the 75-85 range. They routinely score 92. They also have a highly engaged physician culture, explicitly promoting collaboration, transparency and accountability. From the physical organization of the space in which they work, to their three times a week review of hospitalized patients as a group, to their deployment of EHRs, they have implemented many of the things we have been writing about for so long. They are not a giant corporation but they are financially successful. They are an eight office physician practice which actually involves a number of physicians who are part of the same family.


The health reform legislation called on the Secretary of HHS to develop a pilot program under Medicare to evaluate bundled payment. The Bundled Payment for Care Improvement (BPCI) initiative has launched. The law says the pilot will last five years, must be budget neutral, and if the Secretary finds it to be beneficial to do so, can be extended in time and scope. In other words, bundled payment could become mandatory for Medicare for categories of conditions, after 2017! More than 450 organizations have signed on. Commercial payors are also experimenting with bundled payment, but with relatively tepid results. In "Bundled Payment: Avoiding Surprise Packagespdf image", Alice explores what we know about bundled payment, bringing to bear her experience with the PROMETHEUS Payment® model which is the most sophisticated of these programs. She describes Medicare's previous experience with bundled payment and presents some of the methodological problems with the way the new program is unfolding. Following on her previous work on contractual and governance issues in bundled paymentpdf image, she addresses those and also issues in payor-provider contracts. There are ways to avoid trouble in these transactions; and bundles for the sake of bundles alone are not worth experimenting with if the bundles are not designed properly. Caveat emptor!


As the health care system confronts the need for significant change to produce more value, observers note the factors that drive up health care costs. One such commentator, Julie Appleby, writing in Kaiser Health News identified 7 factors driving up health care costs. Francois de Brantes, the Executive Director of the Health Care Incentives Improvement Institute, Inc. (www.hci3.org), the board of which Alice chairs, recharacterized these as the Seven Deadly Sins of Rising Health Care Costs. They merit our attention. They include (1) Greed -- paying for volume rather than value; (2) Gluttony -- an increasingly unhealthy population; (3) Envy -- desire for new technologies and drugs; (3) Sloth -- tax breaks on insurance premiums; (5) Pride -- lack of transparent information; (6) Lust -- provider consolidation; and (7) Wrath -- legal and regulatory barriers to change. Most have had some attention paid to them in the health reform legislation. But contrary to the views of some on the far right who believe the law represents a vast government take over of healthcare, it is, in fact, quite the opposite. From the provider's perspective it is 1,000 pilots blooming in terms of real payment change. The fraud and abuse authorities do represent increasing wrath with respect to unnecessary expenditures. But providers -- and most particularly physicians -- are going to have to embrace the idea of changing themselves or they will be forced to change by others. Many of the issues we work on with our clients represent those kind of forward looking efforts, but, we think many more physicians need to be more pro-active about their futures.


The move toward clinical practice redesign is taking many forms. We had John Sprandio, MD FACP speak with us a few years ago at the IHI program on "Achieving Clinical Integration with Highly Engaged Physicians." When he spoke, to our surprise, his opening comments were "I'm not sure why I'm here. I'm a kind of reluctant public speaker. All I did was follow what Alice and Jim said in their White Paper." As time went by, John continued to take his practice further and further in terms of clinical integration and performance. Two years ago, Consultants in Medical Oncology and Hematology became the first NCQA Level III Oncology Patient-Centered Medical Home®; and it required nothing but paperwork since they were already doing what NCQA required and more. Since his initial reluctance, he has told his story all around the country to many different organizations. Alice continues to represent him and the practice in their legal and strategic work. Interestingly, he has recently revisited our White Paper, and as you will see in his current Powerpoint -which demonstrates his practice’s remarkable results in terms of quality and efficiency - he acknowledges how much the five UFT-A principles have driven his efforts. He tells us that he believes they have been the touchstone for his work, and he returns to them as guiding principles as he refines his techniques.



Continuing our attention to the problems with EHRs as a barrier to change, which we previously addressed, Jim recently posted the following on his website:

"In mid-2012 I sat at a dinner table with a half-dozen practicing physicians who are also quality leaders in their organizations. I asked them if the EHR, as currently being implemented in their setting, was making their care (in their own personal practices) better, or worse. Every single one said “Worse.” When asked “Why?” their most poignant examples dealt with the loss of meaningful clinical narrative in the blither of cut-and-paste documentation, They also complained of the substitution of screen time with computers for “touch time” with patients. And they all had examples of medication and diagnostic errors that seem to have been caused, rather than prevented, by the EHR.

Which brings me to the most disturbing document I’ve read this year: Health IT and Patient Safety, the IOM report released in November 2012. In this report, the nation’s top health IT experts were asked the same question that I asked the practicing doctors: “Is the EHR making care more safe, or less safe?” The experts’ answer appears to be “Uh, we’re not sure, but we’re worried.” That’s not very reassuring, especially since safety has been a primary target of EHR implementations since their early development.

The IOM report describes tremendous variation from one institution to another in how the EHRs of the same vendor have actually been implemented, with dramatically different impacts on safety. Furthermore, in conversations with David Classen and other notable experts, I’ve also learned about some rather alarming results of field tests of whether EHRs would “catch” incorrect medication orders. No one’s EHR caught more than 80% of the test examples, and many caught only 20% of them. Furthermore, no one vendor was any better than any other, and the range of 20%-80% was seen across various institutions that were using the same vendor! And this sort of thing -drug/drug interactions, dose adjustments for patients with renal failure, drug allergies....was supposed to be the strength of the EHR!! I think all health care leaders should read the report, and then engage in a serious conversation with their nurses, doctors, pharmacists, vendors, and IT specialists to ask themselves whether their own EHR is making care better or worse. Far too much money is being spent hurtling toward “meaningful use” if it isn’t going to achieve meaningful improvements in safety."

The IOM Report has been followed by a separate study by the Pennsylvania Safety Authority which found that "EHR related errors soar, but few harm patientspdf image."In December 2012 the Office of the National Coordinator for Health Information Technology announced its proposed planpdf image to track and monitor health IT impacts on patient safety calling for public comments. The EHR industry has seen very little regulation and certainly has not publicly addressed the kinds of issues Jim raises, which have been corroborated in the Pennsylvania report. The ability to clinically integrate effectively and to realize the potential of true clinical collaboration ultimately rests on a secure health information platform which does no harm. We reiterate here, in relationship to UFT-A, Jim's call to arms. Until the health care industry holds the EHR industry to account, patients will be at risk, doctors will be frustrated, and system change will be stymied.


One of the foundational elements of our UFT-A principles is the need for physicians to regain "time and touch" with patients. We have long decried the hamster wheel of fee for service as impeding optimal care. There is now evidence that much of the misdiagnoses in primary care arise because of patient miscommunication of medical history, physician failure to review previous documentation, and problems in ordering diagnostic tests for further workup. All of these are exacerbated by loss of time in the visit. The lead author on the studies called out the loss of time as a critical factor in diagnostic errors. This validates our longstanding view that to improve care it is essential to rigorously, even ruthlessly, remove from the physician practice environment unnecessary "time stealers."


In the first Advisory Opinion from the FTC since the enactment of health reform, the agency has favorably reviewed the clinical integration of a PHO in Norman, OK. The opinion was issued nearly two years after it was requested, which antitrust lawyers say means there must have been a lot of give and take between the PHO and the FTC. More than ten years after the first favorable clinical integration opinion, the initiatives described for the Norman PHO make the proposal of the MedSouth IPA near Denver look quaint. Counter to popular belief that to be approved a network would have to have already done a fair amount of work (see more), this Oklahoma PHO had not yet done much at all of its reported plans. Both networks of otherwise competing physicians had similar goals, but it is striking how the emphasis on health information has changed the way clinical integration will unfold for the near term. Both networks reference the use of technology and guidelines. The Oklahomans, who had been using HEDIS (hardly anyone's idea of a guideline per se) are apparently drafting their own(!), while the Denverites deployed existing guidelines. In addition to requiring all their physicians to implement eClincal Works, the Oklahomans are going to use a full-fledged health information exchange (HIE), a concept which barely existed back in 2002 when the first opinion was issued. It is through provider HIEs that clinical information can be shared meaningfully and easily among otherwise independent providers. The Oklahomans emphasized their selectivity regarding physicians, meaning, much as we have counseled in "Informed Consent to The Ties That Bindpdf image",picking who will get to play is pretty important. Since this PHO is ten years old, and they initially let everyone in as most PHOs did, they told the FTC that they would require all the physicians to sign new participation agreements which require use of the EHR, HIE and their chosen guidelines. Failure to comply will lead to expulsion. Establishing an organizational structure as set forth in the request for the opinion, the PHO expects its activities to be data driven and says it will provide regular reports which they expect will include (a) individual physicians' compliance rates with applicable measures; (b) comparison of the physicians' compliance rate with their previous performance (i.e., individual baseline comparison); and (c) calculation of a cumulative compliance rate for each clinical measure for all physicians to whom the measure applies. Having asked for the opinion, if the PHO does not follow through on all their plans, they may have heightened risk. Still, keeping in mind that these are independent physicians including competitors, even in a community where most of the physicians will be in the PHO, the FTC found that the proposed bargaining for rates by the PHO would be ancillary to the clinical integration purposes of the network. This is good news for those clinicians who are not part of big systems and want to clinically collaborate.


The process of clinical integration is often not easy. To get to a desired new state not only requires attention to the 17 attributes we have identified in our Clinical Integration Self-Assessment Toolpdf image, but also hard work on other cultural issues. In particular where hospitals are now employing physicians who used to be competitors, building culture for clinical integration can be difficult. In “Convincing Rival Docs to Become Partners,” analogies are drawn to Lincoln’s cabinet rivals and the problems of Alex Rodriguez changing positions when he joined the Yankees because Derek Jeter would not move from his. Physicians can be at least as resistant as that. Clinical integration cannot proceed without open and frank communication about past issues with an expectation of finding common ground. In our "Degree of Difficulty Assessment,pdf image" we elucidate the historical tensions that can exist between physicians and hospitals in engagement around hospital quality initiatives. We would suggest at this point that many of the same issues may be lurking, but unexplored, in developing aggregations of formerly independent physicians within health system environments.


As the focus shifts to improved value, two critical areas which have proven elusive in terms of real standardization apparently also have been little studied. In “Physician Referral Patterns Ripe for Scrutiny,” researchers have noted the significant increase in referrals by primary care physicians to specialists, with some concerns as to how medically necessary these referrals are. We have identified this as an issue to be confronted for true clinical integration, as well. Diagnostic errors remain a significant issue in improving quality and controlling costs. Even the PROMETHEUS Payment® model triggers, as many case rates do, from diagnostic coding. If there are errors in diagnosis, the cascade effect can be considerable. A new study suggests that certain types of queries in electronic health records can help identify potential diagnostic errors in primary care. Interestingly, the criteria for potential diagnostic errors were an unplanned hospitalization within 14 days or an unscheduled visit within 14 days]. Eliminating waste is a significant aspect of controlling costs and improving value. Don Berwick and Andrew Hackbarth have identified at least six significant drivers of waste to be targeted, including (1) failures of care delivery; (2) failures of care coordination; (3) overtreatment; (4) administrative complexity; (5) pricing failures; and (6) fraud and abuse. Overtreatment, care coordination, and administrative complexity are all central components of the UFT-A principles as well as our attributes of clinical integration. We have long focused on fraud and abuse, and particularly with regard to quality, as wasteful. Failures of care delivery turn on a variety of factors but standardizing to the evidence-based in order to customcraft the art of medicine should contribute to improvement in that factor as well.


Attention to potentially avoidable complications is a significant avenue for controlling waste. In the PROMETHEUS Payment® model, focus on “potentially avoidable complications” became a central feature of the changed payment model itself. Cutting complication rates in even small projects can have significant impact. In “What We Learned From Cutting Colon Surgery Infections,” five Partners Healthcare hospitals in Boston cut their complication rate by 23% in one year. Although they had negotiated a pay-for-performance contract that would pay an incentive if they reduced average complication rates by 1% a year, they were surprised by the effect.


The implementation of electronic health records has long been noted as a vehicle that will facilitate improved quality, standardization, and coordination of care. However, the EHR industry itself has been a barrier to the rosy version of interoperability, coordination of care, and meaningful data sharing in the real world. Three related articles elucidate some of the challenges in this context. In "The EHR Has No Clothes," the author expresses very common dissatisfactions with EHRs designed by engineers with no understanding of the clinical decision making. Similarly, the failure of both technological leadership and demand by customers for better products from health IT vendors is elucidated there in "Unraveling the IT Productivity Paradox - Lessons for Health Care,". Finally, the researchers here suggest that the absence of very clear data on the improved productivity of health IT design reflects in part mismeasurement. By the same token, however, they observe that some institutions have succeeded in developing widely used, homegrown IT systems, relying on user-centered design practices, which are quite different from the way the commercial vendors have created their programs. The implementation of electronic health records is one of our attributes of clinical integration, but it is clear that the EHR is a method and not an end unto itself. We encourage providers to demand much more of the vendor industry.


While bundled payment and bundled budgets are rising to the forefront of developing payment models, both in the Medicare Bundled Care for Payment Improvement initiative as well as, inevitably within ACOs, much attention has been paid to the payment methodology from the payor to the provider. However, to make bundled payment work, the governance of the collaborative provider enterprise and the contracts among the provider participants that support it are matters to which providers should be paying attention in the march towards realigned incentives. In "Avoiding Food Fights: The Value of Good Drafting to ACO Physician Participantspdf image,"Alice elucidates some of the issues which she also raised in her webinar for CMMI. The PHOs of the mid-90s foundered over arguments pertaining to who was entitled to what money. These issues need to be addressed before dollars start flowing.


Continuing her focus on compensating for quality within groups, Alice elucidates the issue focused predominantly around primary care in a recent Medical Economics piece. There is no question that this is an expanding trend, although one group which had paid this way for more than ten years did an about face and now pays only on wRVUs!


The government has made it abundantly clear that the emphasis on fraud and abuse is not only not waning, it is intensifying. Quotations such as "We used to hunt like an elephant, and now we hunt like a cheetah" from senior enforcers make clear the need for compliance programs. The OIG has recently announced its increasing attention to adverse events, including never events, adverse events and temporary harm events and has focused on reports demonstrating that one in four Medicare beneficiaries is harmed in hospitals. This focus on patient safety and quality is unprecedented. In "Compliance Programs: More Important Now Than Ever,"Alice and her associate, Daniel Shay, talk about how to buff up a compliance program. Here, we would reemphasize the need to put quality issues squarely in these documents, given the developing new world order.


As health reform unfolds for the public payment programs, and commercial payors get on the value bandwagon too, it is increasingly clear that the role of physicians in making change happen will be paramount. Although there is much that hospitals can do on their own to improve quality, patient safety and value, none of the promise of health reform will be met without the enthusiastic involvement of physicians. Why physicians deserve special attention and most importantly what they can do to help themselves, has been an increasing focus of Alice's writing and speaking. From a six minute YouTube excerpt of a presentation to the Pennsylvania Medical Society leadership to an hour YouTube clip of a presentation to the Texas Medical Association, she makes the point that the moment for physicians to step up and organize themselves for better performance and better results is now. Her editorials in Maryland Medicinepdf imageand Medical Economics exhort physicians to recognize their unique role and unique responsibilities.



From our earliest discussions of our unified field theory, we have made the argument that using clinical practice guidelines - the evidence base - to drive a plethora of choices in the delivery of care - from staffing, to budgeting, to capital budgets, to IT implementation and more - can produce better quality at higher value. We now have examples of how evidence-based staffing for care can produce no ventilator pneumonia deaths in four years; no urinary tract infections from catheters., a lower patient fall rate and much higher nurse satisfaction. In addition, this approach to care facilitates the implementation of far more patient-centered care.


As the health care delivery system is reconfiguring, many physicians have sought employment by hospitals as a life preserver in uncertain times. At the same time, traveling throughout the country, Alice has seen that there are a multitude of physicians who have no desire to be employed, but while remaining independent, also are coming to understand that they will have to clinically integrate with other like minded physicians, if they are to be successful in demonstrating real value in their care delivery. The Clinical Integration Self-Assessment Tool v 2.0 (CISAT) is oriented toward employed physicians, on one hand - whether in their own groups or by hospitals -or, on the other hand, in the more hospital-centric settings of the organized medical staff or a newly forming ACO-like entity. Now in CISAT v 2.1,pdf imagewe have a self-assessment tool for groups of otherwise independent physicians to use in coming together to meet the clinical integration demands of the new environment. Designed to help them envision what a desired end state, or at least a more evolved organization, might look like, as with v.2.0, it provides three scenarios for each of the 17 attributes of a clinically integrated entity from barely started, to making some headway, to more developed. We hope physicians find it helpful in repositioning themselves for new challenges.


If we are to truly change the value proposition in health care, the medical profession will have to step up and embrace the need to weed out the waste and abuse to which they contribute, primarily in the form of over-utilized services. Jim has been making this point for some time. This is part of the unique role accorded to physicians in our society, a role which comes with concomitant professional responsibility to lead change -- responsibly. This is the point of Alice's editorials which focus on physician 'exceptionalism' but challenge physicians to pick up this mantle of responsibility in a meaningful way. In 2010, the American College of Physicians did begin an effort to identify services which are too costly and useless. Now Nine Medical Specialty Societies Will Produce A List Of Unnecessary Procedures. This is a long overdue step in the right direction.


During the health reform debates, the group employment based, high performing/high value health systems were frequently called out as models for the future. As we have noted before, most of these are physician driven and physician led. Now there is research demonstrating that hospitals managed by physicians produce better quality results than those managed by professional managers. The researchers expressed surprise at the extent of the difference. They speculated on the reasons and said this does not mean physicians are better leaders. We are not surprised since we believe this is about culture. Manager led organizations can produce just as spectacular results, but it is more rare, because their cultures have not evolved the same way. The UFT-A principles and our Clinical Integration Self Assessment Toolspdf imagespeak to how a quality, value driven, patient centered culture can emerge from specific changes.


Bundled payment has been touted as the pathway to better alignment between hospitals and physicians for quality and value. In fact, other than in the most integrated settings, there is relatively little data about bundled payment and its effect on quality and value. Medicare has its ACE demonstration and long ago tried a CABG demonstration. One of the more recent real world exercises in this arena has been the implementation of PROMETHEUS Payment® pilots. The RAND Corporation report of the initial pilots concluded that bundled payment is complicated. Of course it is. It took the PROMETHEUS Payment Design Team almost four years to develop (1) the infrastructure of Evidence-informed Case Rates®, (2) an engine that can allocate claims paid to the appropriate providers, and (3) a linked scoring methodology to calculate payment for performance. And PROMETHEUS can do this taking into account co-morbidities in real time, as well as not requiring the payment itself to be bundled - where one party gets the payment and parcels it out to everyone else - but by utilizing bundled budgets which permit providers to remain independent. In "That Was Then, This Is Now," Francois de Brantes describes the lessons learned and advances made since the pilots RAND studied, describing the ongoing implementations of the payment model which have resolved many of the problems in the earliest implementations even as the program continues to evolve and be refined based on real world experience.


Now that the interim final Medicare ACO regulations have been published, and the first Pioneer ACOs announced, much of the furor over who will move to be an ACO should begin to subside. The regulations, while an improvement over the proposed regulations still describe a complex, infrastructure-intense, highly detailed set of requirements, with much of the potential reward still speculative. We have long been skeptical of the ideas embedded in the legislation. In many ways a more interesting opportunity has been presented by the Center for Medicare and Medicaid Innovation (CMMI) in its call for proposals to be a bundled payment pilot. Here, CMMI has provided four models for providers and "conveners" to experiment with different types of bundled payment, with the proposers given the flexibility to define their own episodes of care around which payment would be bundled. The thirty day post discharge model is for physicians to prevent readmissions. There is a model for integrated systems. One for hospitals alone; and one which very much reflects the PROMETHEUS Payment approach. In "Here's how to participate in CMMI's bundled payment pilot" (Sept 2011) Alice describes some of the practical implications and legal issues associated with pursuing this opportunity. These projects will be worth watching. In "Bundled Payments Require New Approaches to Clinical Integration,"she makes the argument that physicians will have to make the greatest changes to succeed under bundled payment and that clinical integration among them is key.


In 2007, Alice conducted a unique survey of the extent to which physician groups compensated their employed physicians for quality. Then, as in her 2008 article, the context was the relatively tepid results from P4P programs. Today, as physicians consider deploying a range of strategies to enhance their performance, a new snapshot of the state of the art of compensating physicians seemed a worthwhile undertaking. Again, with the assistance of the American Medical Group Association (AMGA) Alice surveyed their membership. In "Compensating Physicians for Quality and Value: A Changing Landscape",pdf imageshe provides an initial report on the responses which came from three times as many organizations as four years earlier. In "Bolstering Change: Physician Compensation for Quality and Value,"pdf imageshe looks at the phenomenon of compensating physicians for quality performance and increasingly for value in delivering cost effective approaches to care. In addition to setting the issue of physician compensation in the current enhanced value context, Alice also looks at data on how hospitals are dealing with their employed physicians on this front, and concludes that much like her observations with Jim Reinertsen of those hospital employment/integration strategies without content, she finds that many hospitals are missing a real alignment opportunity by focusing solely on wRVUs in compensating their employed physicians. And, more and more, attention will have to be paid to the cost effectiveness of physician behavior which drives the group's or hospital's revenues.


As the drumbeat to move away from fee for service payment models gets louder, it is important to note that in the 'time stealers' that have been the bane of most physicians practices, administrative time and expense dealing with claims payment has been high on the list of major challenges. We made that point regarding the study by Casalino and colleagues in 2009. Things are not much better. The AMA has tracked the accuracy of major insurers claims payment since 2008. While some improvements have been made, it is surprising how high the inaccuracy levels are. In their most recent report on the subject, the AMA found increasing inaccuracy in claims payment. Almost 20% of claims are not paid properly. This is in addition to timeliness issues. While we focus our attention on the provider side of the street and the need for significant improvement in quality performance, this story speaks to the responsibility of health plans as major stakeholders in the results of health care delivery to spend some time cleaning their own houses, while they are busy molding, through their payment models, the behavior of their participating providers.


We believe that the hospital value-based purchasing regulationspdf image which are mandatory as of October, 2012, make clear the need for hospitals to focus on making their care accountable, regardless of the architecture of the program to whom they are accounting. Unfortunately, less obvious is the fact that physicians under the Medicare Physician Fee Schedule are also subject to a value-based purchasing modifier, for which neither proposed nor final regulations have yet been issued. However, that program is to be coordinated with the hospital program. Therefore, physicians should become familiar with the conditions on which hospitals will be measured, since this is the precursor to what physicians will be measured on. We think that moving aggressively now to improve the value in care delivery, namely, that care should be of higher quality, rendered in a safer environment, with measurably controlled costs and efficiencies, will be the key to future success. As we have stated, we believe that true clinical integration is a sine qua non for any of these initiatives.


When he won the John Eisenberg Award for 2011, Jim was interviewed by Penny Carver of IHI and Marcia Delk, MD of Wellspan in the Joint Commission Journal on Quality and Patient Safetypdf image. Jim talks about his observations in traveling the world working with hospital leaders and boards to improve patient safety and quality. In essence, they have asked him how he is able to coach hospitals to significant improvement in quality and patient safety and where those leverage points are. The interview offers interesting insights into the real work of improving quality and patient safety.


We have taken the position that true clinical integration as we have defined it will have to be at the heart of virtually every initiative to meet the mandates of health reform as well as to meet increasing market demands. Fundamentally, without improving the value of care, hospitals and physicians will struggle in an environment of decreasing reimbursement and increasing numbers of patients. To facilitate the work of confronting this fundamental clinical integration challenge, we have developed a Clinical Integration Self Assessment Toolpdf image which is already in version 2.0. Having used it in the field to stimulate conversation and focus attention from multiple stakeholders on potential aspects of care delivery that should be altered, we have identified 17 attributes of clinically integrated organizations. We believe that physician groups, physicians employed by hospitals, organized medical staffs, and coalescing combinations of providers in any configurations, coming together to improve care and be more efficient, will have to confront the challenges of real clinical integration. We have analyzed what those 17 attributes might look like in either a single medical practice or where physicians are employed by hospitals, as contrasted with the organized medical staff of independent physicians or a group of otherwise independent physicians coming together into an ACO-like structure, regardless of its sponsorship. We further illuminate the way in which various stages of this kind of undertaking might unfold -- from the frame of reference for those who have barely begun this work, to early players, to those who are truly committed and capable. We are encouraging leaders in the field to use and refine the document and report back to us. We already have one revision from an academic centerpdf image, which happens to be in Canada.


Many physicians and hospitals believe that the concepts of clinical integration and accountability are really only oriented around chronic care delivery. In fact, the concepts are relevant to all physicians. In a brief discussion for nuclear cardiologists, Alice explains the connection between clinical integration and value based purchasingpdf image, reemphasizing the idea that whether physicians are employed by hospitals or within their own practice groups, the attributes of clinical integration will have to be confronted to succeed in the new environment.


The Healthcare Incentives Improvement Institute, Inc. is the merger of Bridges to Excellence and PROMETHEUS Payment, Inc. While Alice has been the Chairman of the Board, Francois de Brantes, the Executive Director, manages the programs. Since January, 2011, every Friday he has been publishing an "Updates from the Field" with provocative observations about the changing incentives in the system. His observations always conclude with "What does it mean to you?" One of his most interesting comments was on April 29, 2011, lamenting the insistence of many to reinvent the wheel when we already know a lot about incentives. We recommend your joining the mailing list at www.hci3.org to receive these interesting, provocative views about the business case for quality and the drive towards improved value.


The health reform legislation provides an unprecedented emphasis on quality measurement, quality improvement, efficiency and value. Value is improved quality at lower cost. For providers, changing their clinical processes to meet these new demands will be essential. Both hospitals and physicians will be facing Medicare value-based modifiers beginning in 2012. Hospitals will further face reductions in payment for avoidable readmissions as well as for hospital-acquired conditions. Because the two payment modifiers for hospitals and physicians, although separate, will be coordinated, this generates an extraordinary motivation for hospitals and physicians to work together. In The New Value on Provider ‘Value’pdf imageAlice elucidates the many aspects of health reform that reflect these new mandates. She looks at the restrictions Congress has placed on the ability to use cost in comparative effectiveness analysis as an example of a failure of public policy.


The new environment makes it abundantly clear that physician engagement with hospitals will be essential to their ability to produce value. At the same time, physicians themselves will have to find new ways to clinically integrate within their own groups. Hospitals which have now moved significantly into the physician employment arena will have to figure out what to do with their physicians. In their new paper, Achieving Clinical Integration with Highly Engaged Physicians,pdf imageAlice Gosfield and Jim Reinertsen elucidate the new basis for common cause, contrast the current environment with past clinical integration efforts, and offer a new definition of clinical integration

“Physicians working together, systematically, with or without other organizations and professionals, to improve their collective ability to deliver high quality, safe, and valued care to their patients and communities.”

We offer four vibrant examples of very different programs where self-motivated physicians have clinically integrated. We reflect on the ways in which the organized medical staff can actually support and bolster clinical integration; and we introduce a new framework - the Four Fs - to help structure organized thinking about re-visioning the mission of the healthcare enterprise. This paper is a significant resource to our new program of the same title for the Institute for Healthcare Improvement, “Achieving Clinical Integration with Highly Engaged Physicians”. In the last analysis, this is an optimal moment for physicians to step up and take a leadership stance to improve care.


The requirements of the Joint Commission Medical Staff Standard 01.01.01 created quite a furor in some corners. The standards focus on communication and adequate representation by the Medical Executive Committee of the voting members of the medical staff. By giving medical staff members the ability to propose amendments to the bylaws directly to the Board of Directors, the Joint Commission has taken a stand with respect to those unfortunate circumstances where Medical Executive Committees and the members of the medical staff which they represent, find themselves in conflict. Although many lawyers have overblown reactions to these changes, many hospitals and medical staffs are taking this moment of transition to think more explicitly about the role the organized medical staff can play in the new world order of measurement, transparency, value-based payment and clinical integration. Because the medical staff has no reason to exist other than in its support to the Board by advising it on ensuring the quality of care in the hospital, the standards, the culture, and the processes by which this will be accomplished have new momentum. The role of physicians in defining the quality culture of a hospital cannot be overstated. We are working with medical staffs around the country to revitalize their bylaws and their view of themselves. Physicians can not be engaged with each other unless they meet with each other, so some organizations are changing their meeting requirements to a more traditional expectation that physicians appear at meetings. Of course, since time is the scarcest resource physicians have available, to get them to spend time working with the hospital, the work must be meaningful to them. We have long taken the position that the best approach to engagement is to engage in the physicians’ quality agenda.pdf imageWe think that the moment to revitalize the medical staff is even stronger than it has been. We do not share the views of those who see the organized medical staff as obsolete.


Among the very significant fraud and abuse changes in the health reform legislation, Congress made it clear that they expect the regulators to keep bad actors out of Medicare. One of the techniques they will use to do this is the revamped and bolstered Medicare enrollment process. In his new consideration of these issues, “‘Halt! Who Goes There?’: Coping with the Continuing Crackdown on Medicare Enrollment,pdf image" Daniel Shay elucidates the new rules, explains their practical implications, and then reviews 18 months worth of Administrative Law Judge opinions dealing with appeals of enrollment denials. However, the challenge is not merely getting in the front door, but maintaining enrollment, and the administrative burdens have grown exponentially. This is a burgeoning area that all providers need to pay attention to.


In September 2009, when it looked like health reform was imminent, the Commonwealth Fund, Academy Health and Bassett Healthcare convened a meeting, in which Alice participated, of thought leaders and leaders of high performance (high quality, high value) health systems. The purpose was to try to elucidate those characteristics of the Group Employed Medical Staff (GEMS) model organizations-- like Marshfield Clinic, the Billings Clinic, Gundersen Lutheran and more-- which might be replicable in a non-employed environment. Interestingly, to a person, at the meeting, each organization reported that the most significant differentiator of their organizations is that they are physician-driven. They do not say “we employ the physicians”. They say “We are the physicians.” This does not mean that they do not have a C-suite, nor that they do not care about finances. They do. The statement is one about culture. It is physician and clinical values which drive the culture of these organizations and put the patient at the center of their care delivery. The meeting is now reported by the Commonwealth Fund. Link here. It offers some lessons for physicians and health systems alike.


The PROMETHEUS Payment® model has been evaluated by RAND researchers in the New England Journal of Medicine to be the only new payment reform approach with the potential to bend the cost curve while it improves quality. Many have wondered what the contracting model would look like for the relationship between plans and providers to make PROMETHEUS Payment® possible. Now, Alice has created a contract template which is described in a PowerPoint and recording she did for PROMETHEUS Payment® pilot sites which makes it clear that it is not necessary to re-contract the network. Simple amendments can accomplish the task. That said, there are elements of ordinary managed care contracts which would have to be suspended for the PROMETHEUS Payment® model to work.


As the concepts of Accountable Care Organizations and moving to "The Clinic Model" have captured the fancies of small and large hospital systems around the country, we have explored the real questions that should be asked and answered before health systems and physicians leap into these often ill-defined strategies. In our piece "Informed Consent to the Ties That Bind" , we describe specific points of evaluation, and offer good and bad answers to the tough questions. We raise issues that few of the consultants pushing these strategies are willing to address.


While specialists are seeking employment by health systems, health systems are forming multi-specialty groups and the billiard balls are repositioning themselves throughout the country, the illusion that health system employment of physicians will solve alignment problems going forward is unfortunately far too simplistic for the current state of affairs. In her new HEALTH LAW HANDBOOK chapter, "Avoiding Marriage: Hospital and Physician Non-Acquisition Financial Strategies" Alice examines these issues in greater depth than was presented in her teleconference. She explores the phenomenon of enthusiasm for full merger business strategies and offers a range of other techniques by which physicians and hospitals may bond more tightly while physicians remain independent---all with particular emphasis on improving healthcare value and quality.


To meet new demands from health reform there will be clinical process redesign, organizational change, and contractual arrangements entered into by most hospitals and physicians. The much more intense fraud and abuse enforcement interest ought to focus provider attention on compliance with Stark, anti-kickback and false claims liabilities. Antitrust liability is also a major concern. All of these will require the involvement of lawyers ---- who often get in the way. We have, unfortunately, seen a number of law firms and consultants providing misinformation to clients with respect to these issues, as we perceive it, in an effort to make more money. Too many lawyers (and consultants) are running around claiming to have templates and model documents and all kinds of solutions to very complex problems. Some insist that they must be involved in the day-to-day unfolding of their clients’ transitions to new approaches. This is simply not true. How does a doctor or a CEO for that matter know that the advice her lawyer is giving her is right? What are you really buying from a lawyer when you ask for advice and guidance in making major strategic moves? In her article for hospital trustees, “How To Listen To Your Lawyer, Alice offers insight into this problem and offers practical suggestions regarding questions to ask to give comfort to those charged with making the decisions that will drive their organizations to higher performance.


The health reform legislation has created an entirely new basis on which hospitals and physicians can work together in common cause to improve health care. We think that the value-based modifier to be applied to Medicare payment for hospitals and physicians, along with the hospital future of reduced payment for high volume readmissions and for hospital acquired conditions provide a stimulus to implement UFT-A principles unlike any that has existed before. The bundled payment pilot will become mandatory in relatively short order. We see in the moment before implementation of new measures and transparency a limited window of time to change from business as usual. That is in part why we are surprised and somewhat skeptical about the mania for Accountable Care Organizations which is sweeping the world of conferences and consultancies. There are multiple collaboratives, including one offered by the very proponents of the legislation, more or less indicating that they aren’t sure how to create these organizations. Physician groups are touted the opportunity to be the ACO, which by law requires, sharing of Part A and Part B Medicare dollars. In order to be the ACO itself, unless CMS allows bundled budgets and not bundled payments, physicians will have to convince the hospital to let them take the money and disburse it. This explains why in the report of Vermont’s piloting of ACOs under that state’s health reform legislation most of the entities who are participating have formed PHOs, sadly a structure many of us have experienced in the past with little success. There are already integrated entities like those of the GEMs model who will have no trouble performing as ACOs because they already are doing what the law requires. On the other hand, responses from CMS in the form of FAQs raise considerable question about the viability of these entities. They will share no savings, after three years of work, unless they reduce expenditures below those for the beneficiaries assigned to them, who may not even know they are so assigned. The threshold for payment will be savings over what Medicare spent on those specific beneficiaries for the three years before they became assigned to the ACO. We do not even know yet what payment model will be used. We think it is better to spend more energy now on succeeding under the mandatory programs rather than struggling with restructuring, reorganization of governance and a lot of other problems based on a speculative model whose details remain unknown.


The Commonwealth Fund is supporting studies tracking high performance health care systems. In A Guide to High Performance in Multi-Hospital Systems there was no single factor common to all the systems studied which could be said to guarantee high performance. But, “a culture of performance excellence and accountability” marked by patient-centeredness, internal and external transparency on performance, driving towards dramatic improvement or perfection (see Jim’s blog on "Eliminate the Denominator"), rather than incremental change and a clear set of defined values and expectations were keys to success. Persistent focus on execution by leadership was also seen as important. For provider organizations seeking to move to higher value ground – whether physician organizations or hospitals --- the study offers interesting direction regarding how it will take much more than going through the motions or adopting principles to really change performance.


Some provider groups have heeded the call to change only to be met by foot dragging health plans. The Greater Rochester IPA, approved by the FTC for over three years as a clinically integrated IPA able to bargain for fees, has only two tiny contracts that aren’t even enough business to prove that their clinical integration model speaks to a good business case for both parties. They are in a market where two health plans dominate the scene. By contrast, Advocate Physician Partners, a much larger IPA in the Chicago area, which includes hospitals in its network, has about ten contracts. In Connecticut another 400 physician clinically integrated IPA which came together to improve quality has spent more than a year and a half trying to get an innovative primary care program launched, but their payor is impeded by legacy IT systems and an inability to figure out how to administer the program. Clinical integration to bargain for fees may not actually generate higher fees. On the other hand, when clinical integration appears to create dominant local provider systems that DO successfully negotiate higher fees, it is attracting the attention of policy makers and regulators in a way that suggests that this might be a short-lived strategy as described in recent reports on California’s experiences with this approach.We believe that clinical integration within physician groups, among and between hospitals and physicians and among otherwise competing physicians is only a good strategic move if it is truly driven by a desire to improve quality and enhance value even if no one pays differently or more. Clearly where the purchaser/employer does not yet see the value of pushing the point with the health plans, and where health plans have not been motivated to adapt their internal systems to the external provider changes, clinical integration is no guarantee of business. Local market forces can still determine how quickly providers will be able to make change happen and also be paid fairly for those changes.


As health systems and physicians jockey around in the developing marketplace to maximize their positions, some health system strategic initiatives have been met with considerable resistance. In recent years, two high profile CEOs were ushered out of the C-suite to unemployment because of dissatisfaction by the medical staff with the system’s move toward more physician employment. As we have noted previously, California is one of the most contentious medical staff organization states in the country. But one of the worst stories we have seen, which will take many years to recover from, is the battle at the City of Hope, a cancer hospital in Los Angeles. We were so struck by the level of tension in this story, that we felt compelled to use it to reiterate our points about principles of engagement with physicians, because it is hard to believe that matters had to come to this sorry pass. We don’t know the inside story here. It may be that sheer obdurate resistance to change is the sole reason for the extraordinary steps some of these physicians took. It may also be that the institution got well ahead of itself as it moved to implement its chosen strategy. The aggrieved physicians have filed suit with the support of the California Medical Association. But there also is another cautionary note here, which is whatever the outcome of this story, as the system changes, some folks will be left behind and left out of their comfortable longstanding settings, no matter how angry it makes them. We will watch the unfolding of this story with interest.


For the American health care system to change to deliver higher value and higher quality care, physicians themselves will have to step up and accept responsibility for their role in the move to ‘bend the cost curve.’ In an extraordinary demonstration of the burgeoning and heartening recognition of this need, the American College of Physicians has announced an initiative to advise doctors on what’s too costly and useless. We can only hope that this step will contribute substantively to diminishing the overuse of health care services which physicians themselves generate.


Engagement of physicians in quality initiatives and with each other will be essential to all organizations seeking to change their care delivery. It has now been demonstrated that physicians engaged in quality improvement initiatives have lower stress levels and they perceive their quality of life as better. Moreover, echoing our principles of engagement, the researchers concluded that quality improvement activities that seek physician involvement in the design and implementation are better received by physicians.


The improvement of health care quality throughout the United States continues to be a major part of the health care debates, along with better control of costs and waste. In that context, clinical integration has re-emerged as a mechanism to achieve these dual results. This is interesting since many believe that the goal of clinical integration is for providers to negotiate higher fees with payors. This is because the concept emerged as part of the antitrust safety zones published by the FTC and Department of Justice in 1996. There have been many settlements where the FTC said, “This might have been OK if you’d been clinically integrated.” The concept has been further clarified by its principal author but it has not been described frequently in the literature. In part this is because the utility of clinical integration to facilitate better, more efficient care has been barely explained by antitrust lawyers, who do not live in the world of quality improvement. Clinical Integration: It’s Not About Antitrust is Alice’s teleconference describing the advent of clinical integration, the context for it, what it means, and how to do it. ‘Clinical Integration: It’s Back’ is her article in The MGMA’s Connexion named as one of the top five articles of the year.While there is a role for antitrust lawyers where otherwise competing providers come together to negotiate for fees, the concept of clinical integration is very similar to the uft-a principles and is also applicable within physician practice groups. Moreover, it is probably essential for groups to look at the extent to which they have deployed these principles within their groups before they go looking to affiliate with others. Still, to come together around quality even if no one pays you differently is more and more critical as physician groups feel the pressure to improve their financial margins as well as their quality performance.


Health reform has made it clear that we need some significant innovation in the health care delivery system to achieve the kinds of results the American public wants, and that will move this country to more efficient, high quality healthcare. From clinical integration, to accountable care organizations, to significantly increased attention to fraud and abuse, there is a lot of volatility afoot. Yet, there are laws on the books including Stark and the antikickback statute, which have the ability to impede true change. At the same time, there are many who over interpret these laws and do not undertake initiatives that they could.

In June 2009, at a ninety minute session at the American Health Lawyers Association Annual Meeting, at the request of Lewis Morris, Chief Legal Counsel for the OIG, and Vicky Robinson, his deputy, Alice joined them in a discussion of innovation in healthcare in light of program integrity demands. This was their idea, and an effort to confront what Lew calls ‘the Goldilocks paradox” --- how to find the balance between enforcing the laws on the books to protect the public programs, but without stifling innovation and improvement. . We can now make this presentation available for free as an MP3 recording that you can access from Alice’s website www.gosfield.com. We do require that you register to listen to the discussion. They present their philosophy of enforcement and we discuss very specific, innovative techniques – like hospitals paying physicians for quality results, clinical integration, physician compensation for quality within groups and much more. Lew and Vicky deserve real credit for being so open and receptive in these discussions. Alice was honored that they asked her to be the voice of the industry with them. We had fun doing it.


It has been a fundamental principal of UFT-A that to improve the working environment for physicians, to save them time is critical and the lowering of administrative burden essential. Against that background it is noteworthy that Casalino and colleagues have found that in the last fifteen years there has been no diminution in the administrative demands placed on physicians in terms of interacting with managed care plans. In addition, nursing and clerical staff spend even larger amounts of time which are now estimated to cost practices at least $23 billion to $31 billion each year. The loss of time with patients for their needs deserves far more policy attention. In Ohio, health plans and physicians groups did announce that health plans in the state were working together in an effort to streamline common data submissions for credentialing and the like, recognizing at least initially, the enormous burden their programs impose on physician offices. It is a long time coming, a step in the right direction, but decidedly not enough.


As the provider side of the delivery system is increasingly expected to produce value, with financial penalties for poor performance and enhanced payment for better performance, even the pharmaceutical industry is now getting involved. Recent reports of drug deals tie prices to how well patients do are beginning to demonstrate performance guarantees associated with the use of pharmaceuticals. Failure to produce claimed results could require manufacturers to repay to insurers monies received contribute financially to the medical care made necessary to treat the diminished outcome. This approach certainly speaks to the UFT-A principle of making payment clinically relevant throughout the system.


In support of the business case for quality, recent data has demonstrated that top performing cardiovascular programs involve the active engagement of physicians in operating them. Where more organizations are moving to a dyad structure which include physician leaders and business types focusing on their areas of expertise and combining forces, quality results have improved. In follow up to a study that demonstrated these results, further inquiry showed that where community physicians were involved, results were even better. Much of the work that we have been doing over the last five years has focused even more heavily on engaging physicians around quality issues. From health reform, to payment linked to performance, to more public quality reporting, finding ways to motivate and inspire physicians to engage with each other and with their hospital “significant others” will be essential for improved quality, demonstrated value, and a better working environment.


The physician need for time and touch with patients is one of the fundamental principles of UFT-A and a profound challenge for the health care system going forward. Still, in today’s environment chaotic working conditions wear down primary care physicians. A study published as recently as July 2009 found that they feel time pressure during office visits, their work pace is chaotic and they have little control over their lives. This problem will only intensify as more physicians leave primary care, placing increasing pressure on those who remain. Saving time is not just an administrative concern. Doctors under stress and with lowering satisfaction rates, do not practice top flight medicine. We have long called for health systems, physician practices and hospitals to ruthlessly cut out of their processes unnecessary burdens which steal time from the doctor-patient relationship. The need is increasingly critical.


It is not often that an organization like McKinsey, high-priced heavy duty business consultants, would look to the non-profit world as a model for business innovation. In “The ergonomics of innovation” two McKinsey consultants analyze what made the IHI 100,000 Lives Campaign so successful. The point is not that the campaign worked, but the techniques which made it work. To read their analysis offers a different way of thinking about innovation in any setting. Making the right thing to do the easy thing to do is key to having a real impact. Blending new ideas with old, limiting the burden of thought and action, specificity of goals, naming the problem, using a hard count, applying “affordances” are all highlighted as techniques that foster the spread of innovation. This is a really interesting look at how pure business consultants see what we talk about in terms of “using engaging methods” to engage with physicians. Highly recommended to stimulate thinking about how to proceed to implement the principles of UFT-A and more.


The costs associated with ‘never events’ will no longer be paid by Medicare and many other payors. What will the impact of no payment for never events actually look like? In a case study approach to the reality of these issues, and the clinical complexities they present, Caroline Blankenship, in a recent issue of the Health Lawyer, not only factualizes clinical circumstances, but calculates the financial impact on the hospital and offers practical suggestions to avoid trouble in the first place. Interesting reading. Please note the following with regard to the PDF: Copyright 2008 American Health Lawyers Association, Washington, D.C.Reprint permission granted.
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The organized medical staff has a unique role in assuring the quality of care in hospitals. Yet the volunteer medical staff members are under unprecedented pressures which inhibit their willingness to take on tasks they traditionally have performed for free – whether medical staff leadership, service on committees, or on-call and indigent care coverage. Now, there is some data showing that throughout the country, there is an emerging bifurcation into alternate models of medical staff-hospital relationships. (See, Casalino et al, “Hospital-Physician Relations: Two Tracks And The Decline of the Voluntary Medical Staff”, Health Affairs (Sept 2008). Where in the era of post-failed Clinton health reform, hospitals bought primary care practices and then had to unload them, more and more hospitals today are acquiring specialist practices and employing specialist physicians. Equally present are the settings in which members of the medical staff go into competition with the hospital and cease to attend there as much as they used to, while they own and develop ambulatory surgery centers, imaging facilities and even whole specialty hospitals. What is the significance of this for medical staff governance and quality surveillance? These changes in organizational arrangements really ought to have little meaning to the functioning of the organized medical staff in relationship to the hospital board and administration with regard to its principal responsibilities for quality. The medical staff members, whether employed or independent or more typically a mix, still have a unique role in the hospital.

Some commentators have taken the position that the organized medical staff is obsolete if not moribund. We believe they may be wrong; although it is becoming increasingly important to consider carefully just what the function of the medical staff ought to be in the highest quality environments. If 20% of the medical staff is responsible for 80% of the hospital admissions, then who should be considered Active Staff with governance authority to make the rules for the interrelationships among all physicians? Who should define the quality culture for physicians? If the hospital employs the physicians and mandates their participation in activities that fundamentally do not interest them, what will be the outcome for patients? If the medical executive committee is focused on internecine warfare, endovascular food-fights and not how many hearses leave the hospital and why, what will the hospital do without a medical staff on whom it can rely to create a high quality environment? We think these are essential questions which merit the attention of hospitals, their boards and medical staff members. We do not believe that employment of medical staff members ensures an engaged medical staff which will work well on quality issues. We think that the current moment in quality policy and demand for demonstrated hospital quality performance offers an unprecedented opportunity to reinvigorate the role of the medical staff around issues that really matter.


Since the inception of this website we have highlighted the inexorable movement of fraud enforcers to direct targeting of quality problems as fraud. (See, links to (5) #5, #8, #13, #27) When the AHLA and the OIG published joint guidance to hospital boards on their fiduciary responsibilities for quality it was clearly game on! We have highlighted the quality-compliance nexus in the past as well. The rules of the game have so intensified, however, that we now believe that it can be said that a major goal for all health care providers in the 21st century will be “Avoiding Quality Fraud”. Our article in Trustee magazine is directed to hospital boards, but has meaning to everyone in health care. The increasing volume of quality data reporting, implied statements about quality in claims filed, and flat out false claims liability lurk. It is significant that hospital quality data reporting has been targeted by the OIG in the 2009 Work Plan as a topic of attention. In her first participation in the teleconference series offered by The Reinertsen Group, Alice elucidates the varieties of these frauds and their pitfalls. In this 90 minute presentation she offers practical tips for avoiding quality fraud in a dialogue with Jim and Jamie Orlikoff. The teleconference is available for sale and download.


The search for a new payment model to propel and support better quality of care continues with even greater fervor, given the economic crisis and rising health care costs. Meredith Rosenthal, a member of the PROMETHEUS Payment® Design Team, but also one of the premier scholars on pay-for-performance, looks at efforts to move beyond P4P in her article “Beyond Pay for Performance – Emerging Models of Provider-Payment Reform.” NEJM 359:12 (September 18, 2008) 1197-1200. She offers a nice chart which compares the general approaches of incremental reform (no pay for “never events”), primary care payment reform (medical home), episode-based payment (PROMETHEUS and Geisinger) and shared savings models (Medicare Group Practice Demo). She concludes that there are fundamentally no “new” payment methods, and that economic theory (and she is an economist) holds that mixed payment models will work better than any one approach. This leaves the door open to new variants to emerge. It is fair, however, to observe, based on this review, that the PROMETHEUS Payment® Model offers the most robust new payment vehicle available, today.


The Medical Home, sometimes referred to as the “Patient-centered Medical Home”, despite sounding like a website or new kind of residential facility, is gaining traction as a route to reorganizing the delivery of care to certain populations. Finding its foundation 40 years ago in pediatrics, it is now touted as the answer for primary chronic care improvement as well as payment. A recent search for those who are very successful with these programs has led Arnold Milstein MD, to draw some interesting conclusions about what makes for a “Medical Home Run”. Unwavering commitment to keeping patients out of the hospital is key. By the same token, though, a recent issue of Health Affairs has looked at a variety of controversies and claims regarding the medical home, from differences in its definition and components, to whether those who might be most interested in offering the medical home model in fact have the infrastructure to do so. Rittenhouse, Casalino, et al, found that large medical groups were better prepared with elements of infrastructure alone (e.g., patient reminders, physician feedback, electronic records and more) to offer this approach to organizing care delivery, but even they were not routinely ready to do all that the medical home model promises.

In reviewing the claims for this model, it appears there are two movies currently playing in local theaters: Medical Home: The Clinical Movie --- which is about organizing care delivery to be sure patients can rely on a single practice to be accountable for and responsive to their needs across the continuum of care delivery; and then there is Medical Home: The Payment Movie. Here the story is yet another transitional approach to curing the dissymmetry between high quality, patient-centric clinical processes and current payment models. Medical Home: The Payment Movie seeks additional dollars to pay for the infrastructure which makes coordination of care possible. In fact, were additional payment to be made for intrastructure alone, there is no guarantee any change in quality would result. Still, it is indisputable that it costs money to implement infrastructure that makes a medical home possible --- to use non-physicians to help engage patients in their own care, maintain registries and other electronic data to foster clinically important interactions with patients and to keep tabs on the care they are getting.

The PROMETHEUS Payment® Model is highly consistent with the Clinical Movie script and is even better than the transitional, small-additions-to-current-payments storyboard of the Payment Movie. Also intriguing is the application of the medical home clinical approach to other types of care, like hematology-oncology. Those physicians are losing their business model based on drug payments and ought be paid for the care and coordination that are the core of what they do. Infectious disease physicians have similar issues, as do rheumatologists treating arthritics. The basic premise of the Clinical Movie is not only viable for primary care. It deserves consideration elsewhere. Elements of it are consistent with UFT-A principles as well.


Gainsharing ---- where hospitals give to cooperating physicians some of the savings from cost reduction steps --- has been cited as a potential quality enhancing technique which also can bond physicians with hospitals. Gainsharing was the basis for a fraud and abuse settlement with the Paracelsus Hospital Company back in 1983 when DRGs were first implemented. The OIG has now approved about a dozen of these programs, focused around procedurally based services. Labeled as efforts to standardize care, the approved programs have multiple bell-and-whistle safeguards against reducing services to patients, but all of approved programs are short-lived (one year in length). While gainsharing may serve some purposes in the short-run, it has limited applicability and is not at its essence about quality. By contrast, as part of the 2009 Medicare Fee Schedule, CMS has proposed regulations to govern both gainsharing (“shared savings”) programs and quality incentive payment programs under the Stark statute. Protection will be available only to programs between hospitals and physicians. You can read Alice’s comments to CMS on the proposed quality incentive payment regulations, in which she distinguishes the risks in these types of programs and calls for greater flexibility in the context of incentive payments.


The fundamental principle of UFT-A is that if all the members of the care team collaborate in accordance with the same iterations of the best science available, the whole system will work better. In an interesting survey of The Role of Nurses in Hospital Quality Improvement, the Center for Health System Change elucidates the tensions in the accreting volume of quality improvement work expected of hospitals, as well as the need for nurse engagement while care at the bedside is also a critical challenge in light of staffing shortages. The role of culture and leadership in supporting nurse involvement was cited, along with the results that came when nurses were supported in their engagement. As Jim says on his website, “If you really want it done right, regularly, get a nurse involved.” For UFT-A principles to work, the whole care team should be engaged at their highest and best uses, in accordance with the clinical guidelines that drive the enterprise.


Medicare’s ‘pay for quality reporting’ initiative really is “pay for whatever I did” because it is the completion of the form, not the quality of the care, which gets the payment bonus. CMS was met with a tepid enrollment of 17% of potential participants. And that program is not limited to physicians, but includes other non-physician practitioners as well. While these initiatives continue to be touted as ‘payment reform,’ on the other side of the ledger, both CMS and many health insurance programs are adopting no pay for no performance programs by denying payment for never events -- mishaps of such an egregious nature that they never should have occurred in the first place, in essence no pay for no performance. Hospital associations have stepped forward to say their members will not bill for such events including wrong site surgeries, retention of foreign objects after surgery, death or disability associated with wrong type blood transfusions. First promulgated by the National Quality Forum in 2002, the list of the initial 27 “never events” is not without controversy, since a range of the conditions cited include matters which may have been present on admission (decubitus ulcers). Medicare has proposed to add conditions to those it already requires to be reported and on which it will not pay for the care devoted to treatment of the event or complication. In the PROMETHEUS Payment® model, a readmission for something related to myocardial infarction within thirty days of discharge is considered a potentially avoidable complication for both the physician and hospital.


The challenge of engaging physicians in quality initiatives at the hospital often falls most heavily on the shoulders of the medical leadership in the C-suite, whether the chief medical officer or the VPMA or the chief of staff. In our article directed to these folks, “Finding Common Cause in Quality: Confronting The Physician Engagement Challenge”, we dispute the metaphor offered by Jeff Goldsmith of the hospital-physician engagement continuum as a coral reef of predators and prey. From our continuing work with IHI and medical staffs and hospitals around the country, we continue to hold the firm belief that enormous strides can be made for better patient care and more activated physicians, when physicians are seen as the hospital’s true partners and not mere customers.


With her study of the current identified effects of P4P, traditional compensation models within physician groups, survey of groups which do compensate on quality and consideration of the legal issues in doing so, Alice opened the door to focusing on this aspect of motivating quality improvement. In her article, “Compensation for Quality: The Next Inevitable Step”, she not only makes the point that quality will never reach optimal levels if physicians do not have consistent payment incentives within their groups, but she affirmatively calls for more information about organizations which do pay their physicians for quality. It is hard to believe that only 14 groups around the country, and most of them very large multi-specialty organizations, are experimenting with these efforts. Since the article was published she has received information from 5 more groups whose data tracks directly to her earlier findings. The phenomenon is increasing. But some have been toiling quietly at this work for longer than any published reports would reveal. If your physician group or system compensates your physicians in any measure for their quality performance or based on their quality performance, please contact us at info@uft-a.com with your story.


First convened in December 2004 as a disparate group of experts intending to design a new payment model, PROMETHEUS Payment® Inc., has now been awarded a $6.4 million grant from the Robert Wood Johnson Foundation, to develop a scorecard, refine the concepts and most importantly test the program in four pilot sites across the country. Having modeled its first Evidence-informed Case Rates® for actual implementation beginning in 2009, the results are quite stunning. In her plain language article, “Making PROMETHEUS Payment® Rates Real: Ya’Gotta’ Start Somewhere” Alice explains the methodology of constructing the rates. First, she elucidates how the Design Team took into account its clear understanding that physicians would be suspicious of rates built on claims data. There are five specific financial cushions built into the rates. The result is that the care for a controlled non-insulin dependent diabetic, whose care comes primarily from a physician office, would be paid based just on the claims data at $311 a year; but, under the PROMETHEUS system, the same patient’s care would be eligible for $2329 to the physician!!! At the same time, what is most remarkable is that this approach to the broad problem of delivering science based diabetes care would save the system represented in just the database we are using and this one condition, more than $340 million. This is a very powerful reason to move to the PROMETHEUS Payment® model. Similar results are emerging for the other conditions we will address initially as well. The more important hidden message in the article, though, is whether our specific program is implemented is not the issue. Throughout the American healthcare system, we are spending extraordinary amounts of money on potentially avoidable complications, while we are not paying providers enough to do what needs to be done to prevent those complications in the first place. Thinking about which services the PROMETHEUS model considers to be potentially avoidable, and then analyzing how to avoid them, is a good way to approach how to organize clinical service delivery for better results with greater efficiency. PROMETHEUS Payment® Inc. is looking for provider-plan combos who want to step up and try implementing some of the ECRs® without being a formal pilot site (which requires a three year commitment to use all the ECRs® and participate in evaluation. If you would like to explore that possibility, please contact us at PROMETHEUS@uft-a.com.


Be careful what you measure and reward is a longstanding truism in quality measurement, because the subjects of the reports will work to get good scores. As a result, the risk that other problems will be ignored increases. This phenomenon has recently produced potential over-diagnosis and consequent over-prescribing in response to CMS measures. When payment is linked to specific activities, those activities will be done to be assured of achieving the payment. That is the point of incentives. UFT-A takes a different approach. While one of the tenets is to fix accountability at the locus of control, linking specific accountable behaviors to specific additional payments or reductions, is like fee-for-service in drag – it simply motivates the measured behavior in isolation and nothing more, unless composite scores are used, UFT-A, and now the PROMETHEUS Payment® model, both stand for the proposition that paying the right amount for the right services at the right time, with no single behavior generating additional or reduced payment is a far better way to go.


For well more than thirty years, the literature has confirmed that the single most powerful risk management technique is a good doctor-patient relationship. Patients do not sue the doctors whom they love. In the current world of quality performance and measurement, patient satisfaction is an important metric, given the weight of patient-centeredness since Crossing The Quality Chasm. "Engage the patient" is one of the five tenets of UFT-A. In an interesting discussion of patient satisfaction, and specific steps to improve scores, Goodman and Ward have demonstrated that "Satisfied Patients Lower Risk and Improve the Bottom Line." Besides the very practical guidance they offer, though, their article speaks to the need to aggressively seek out patient complaints. This approach to patient-centeredness offers a potential bellwether for clinical quality problems. And the most advanced organizations are engaging patients and families much more pro-actively—as partners in the actual design and delivery of care—rather than asking patients to report on their experiences after the fact. This process, which has been labeled “Putting the patient in the room”, is exemplified by the work of Cincinnati Children’s (family are considered essential members of the ‘rounding team,’) Dana Farber (patients and family members are prominent members of virtually every committee and task force) and perhaps most aggressively at PeaceHealth St. Joseph’s, Bellingham WA (where a patient is a full member of the Medical Executive Committee!)


When we launched this website in 2003, we proposed a range of activities for which evidence-based medicine, clinical practice guidelines and standardized care could be brought to bear in far broader ways than simply with regard to a payment model. While PROMETHEUS Payment®, Inc., will now be given an opportunity to demonstrate its potential with the award of a more than $6,000,000 grant from the Robert Wood Johnson Foundation to test the model in four pilot sites, other attempts at payment reform are surfacing. The Geisinger Health System has launched its ProvenCare methodology which is not really a payment system but a warranty for the quality of the care they produce. Limited initially to CABG surgery, tested in their own health plan, for a single case rate payment the hospital and physicians agree to provide care for all complications. Obviously this creates an incentive to prevent those complications. In a similar vein to prevent errors, increasingly health plans are refusing to pay for, and in Massachusetts, Pennsylvania, Minnesota and Vermont, hospitals are agreeing not to seek payment for “never events.” While these new disincentives may improve patient safety, none qualifies as actual payment reform.

On a different note, the Blue Cross Blue Shield plan in Massachusetts has launched a program which appears to be a new form of capitation with a quality bonus added on top. The press reports they are using to launch their voluntary program tout the fact that the capitation rate will be severity adjusted on an unspecified basis. They expect a very slow roll out and acknowledge that most of the takers will be primary care physicians who might appreciate a 10% bonus on their capitation rates. This is pay-for-performance on a capitation platform and not true payment reform. In fact, besides the PROMETHEUS Payment®, model, there are essentially no other true provider payments reform models being proposed. Presumably the complexity in designing something comprehensive is daunting. In her article “Physician Compensation: Behind the Green Door,”Alice reviews the current major payment reform proposals, including the advanced medical home and some other ideas for primary care, and elucidates their limitations. Only the PROMETHEUS Payment®, Inc., model conforms with the fundamental UFT-A principle of defining the payment amount from a clinical evidence-informed base making it clinically relevant by removing actuarial risk from payment, but also aims at engaging patients through transparency and fixing provider accountability at the locus of control.


The battles over physician views of quality rankings based on efficiency continues. In a measured analytical piece on “Comparing Physicians on Efficiency” Arnold Milstein, M.D. and Tom Lee, M.D., parse out nicely the differing perspectives of customers – both patients and subscribers, as well as employers and insurers – versus the views of physicians regarding efficiency measurement. To the extent that efficiency is “who is cheapest,” neither customers, nor physicians can take comfort in the quality of the care that is fostered in such an environment. Challenges to the way health plans manage these programs will continue among stakeholders until common values can be brought to bear in this arena. Milstein and Lee rightfully challenge physicians to step up and embrace the need for such measuring tools in the struggle for improved quality of care in a context of limited, that is, not infinite, resources.


As the spotlight is focusing more intensely on hospital quality performance, the roles of trustees are increasingly under government scrutiny. In addition to our suggestions regarding how trustees can more effectively facilitate improved physician engagement around quality, the new publication jointly authored by the American Health Lawyers Association and the OIG “Corporate Responsibility and Healthcare Quality: A Resource for Healthcare Boards of Directors” reinforces the intense interest of the government’s enforcers on the critical accountability of hospital boards for effective quality initiatives and sound quality performance. This unique monograph elucidates the Board’s fiduciary duty for quality and its accountability for the implementation of quality initiatives, but, most significantly, it also presents an explicit exposition of the government’s role in enforcing healthcare quality. The monograph suggests ten critical questions all boards should be asking to be sure that they are effectively fulfilling their obligations.


The ability to get proper on call coverage for the hospital emergency department is a growing challenge for community hospitals as documented by the Center for Health System Change. Specialist physicians have become increasingly fearful of serving on the on-call rotation given increased liability and larger numbers of indigent and uninsured patients. Medical staffs around the country have reduced the requirements for physicians on the medical staff to perform this function, which long was seen as the physician’s professional responsibility, which in earlier times they fulfilled without much complaint. To cope with this problem, hospitals have developed a range of strategies which the Center identifies in their report. Now, for the first time, the OIG has issued an advisory opinion explicitly approving an on-call and indigent coverage program to pay members of the medical staff for performing these services. Some have declaimed the safeguards this hospital established as unwieldy and impractical, but the good news is that the OIG has acknowledged this critical dilemma. They are still confused, in some ways, though, over the role of the medical staff in that most bylaws no longer require most categories of the staff to provide coverage. And, the EMTALA liabilities to make sure coverage is available are the hospital’s and not the medical staff members’ unless they are on the on call schedule. This is one of many ways in which hospitals can pay physicians to do work on their behalf to the ultimate benefit of their patients.


Clinical integration is a technique by which independent physicians and group practices can relate to one another for quality and still bargain collectively over price with managed care plans. Although cited by the FTC in virtually every settlement with IPAs and combinations that bargained collusively over fees, the indicia of proper clinical integration have not been well defined. Some settlements and one Advisory Opinion, now almost six years old, have staked out some of the turf, but most of what the behavior the government has reviewed, it has always seemed, were motivated more by price aspirations than quality improvement. The lack of clear guidance has led the American Hospital Association to call on the FTC and DOJ for greater specificity in describing what would qualify as good clinical integration. Now, in their advisory opinion to the Greater Rochester IPA, the FTC has described a program which seems far more to emanate from a quality impetus. Because GRIPA was well integrated clinically for the work it did in connection with HMO products, it had a relatively easier time orienting its activities to the PPO, fee for service, business where the antitrust risks are far greater. The opinion is a useful statement of one modern model of clinical integration.


The change in the JCAHO Medical Staff Standard MS.01.01.01 to require that the medical staff bylaws be an integrated document has created a firestorm of controversy that should be less than a tempest in a teapot. Prediction of expensive disasters in redrafting bylaws, and arguing over what is process versus what is procedure, is absurd and fomented by a cadre of law firms who have made significant income from advising medical staffs and hospitals that the bylaws should be divided up into five different sections so that they may be more easily amended. The Medical Staff Bylaws are the Constitution of the Medical Staff and should be amended about as easily as the US Constitution is amended. Alice has written and advised on medical staff bylaws for more than 100 medical staffs all around the country over the last 30 years, and this is not all she does, as it is for some law firms. She has never advised a medical staff to disaggregate their bylaws.

The other noteworthy change adopted by the JCAHO is that the medical staff should have the right to propose medical staff bylaws changes directly to the board. This should be non-threatening unless you have a renegade medical staff or a renegade medical executive committee where the representative function of the MEC has broken down. It would be the board’s responsibility to sort this out if the medical staff asked for changes, not recommended by the MEC, that were not in the best interests of the hospital. Everyone should calm down about these feared power struggles and focus on the real purpose of the medical staff, which is to be responsible for quality in the institution. When organizations do that effectively the medical staff can become more galvanized for a far better purpose than internal turf and power struggles.


For years, we have been working on techniques to help physicians and hospitals collaborate more effectively to improve quality. In our white paper for IHI, we describe a six step plan to accomplish improved engagement around quality. In “Sharing the Quality Agenda with Physicians”, we focus explicitly on the unique responsibility of lay trustees to create more effective physician engagement with hospitals. We explain how the board can ask the right questions and seek the right data to make engagement and quality strides effective and real. We emphasize the importance of meeting the varying needs of different segments of the medical staff and describe Stark compliant initiatives that should be considered.


Pay for performance programs show no signs of abating in popularity, yet their impact remains equivocal. Whether quality would be better if physicians within groups also paid themselves based on quality performance is unknown. If the incentives of P4P are to have impact, how are those monies distributed to the individual physicians once the group gets paid? There is virtually nothing in the literature on point. In “Physician Compensation for Quality: Behind The Group’s Green Door,” Alice looks at the data on P4P programs, the basics of traditional compensation within groups and then presents the findings from a unique survey which was sent out on her behalf by the AMGA producing responses from 14 groups around the country who are variably paying for quality as part of physician compensation. Some report significant improvement in quality performance, too. Alice then looks at the payment reform models on the horizon and concludes that traditional notions of productivity, on which most current group compensation models turn, will not reward what the new systems, and most particularly the PROMETHEUS Payment® model (www.prometheuspayment.org) is designed to generate. She examines whether the Stark rules on compensation will be a barrier to changed, creative approaches, concludes that it will not, and then looks at what employment contracts will have to accommodate to make physician compensation for quality within groups real and of value to both patients and physicians.


On December 5, 2006, Health Affairs published a web exclusive series of articles offering some fascinating perspectives on hospital-physician relationships which are particularly relevant to physician engagement with hospitals around quality. Berenson, Ginsburg and May observe that physicians have increasingly become competitors of the hospitals which were formerly their most valued "significant others". Fisher, et al. argue that hospital quality results should be measured to include the "extended hospital medical staff" which would take in physicians who refer to the facility but never set foot in it. Wilensky, Wolter, and Fischer present a new spin on gainsharing as a way to meet the ever elusive goal of "aligned incentives". Smithson and Baker contend that the medical staff organization itself is a moribund anomaly and not worth accommodating at all. Goldsmith offers a view of the medical staff as a Darwinian coral reef with predators and prey; while Cortese and Smoldt claim that legally integrated hospital-physician entities are the only hope for the future.

The provocative juxtaposition of these articles reflects the intensity of interest in the intersection of physicians’ economic behavior with the hospital’s status as an institution where most of the activities are driven by physician orders. All acknowledge that improved medical staff-hospital relationships are indispensable in today’s world.

We make no argument for a one-solution-fits-all approach. We have seen circumstances in which employed physicians are just as restive and disengaged as independent physicians and, by contrast hospitals where the independent medical staff has taken significant responsibility for enhancing quality of services rendered within institutions’ four walls. In our IHI white paper, and other work with clients, we take the position that most physicians have a profound interest in quality, particularly in terms of outcomes for their patients and efficiency in the use of their time. The holy grail of “aligned incentives” and structure-driven solutions can only offer short-lived hope unless these efforts recognize that physicians themselves are increasingly reported on for their quality results, risk fraud and abuse enforcement for quality failures, and have a strong cultural concern for excellence and professionalism. All combine to define their business case for quality which must be the fulcrum to better relationships with hospitals if they are to be sustainable.


Among the many strategies for closer alignment between hospitals and their physicians are the proliferating joint ventures and financially driven exercises, including gainsharing, that are intended to capture with more revenues the loyalty of the medical staff members who are involved. In her editorial in a recent issue of the Journal of Oncology, "Physician-Hospital Partnerships: What Really Counts?", Alice argues that unless the quality implications of hospital-physician ventures are their driving purpose, these transactions may generate short-term revenues, but they will not feed the core needs of their participants. Still, they may have an important role within the context of a well-thought out physician engagement strategy.


What qualifies as excellent care is the core of any quality discussion. When the issue is who are “the very best doctors”, there are new questions worth asking. Jim has raised these in an incisive PowerPoint presentation which supported a program he conducted for a large physician group. He articulates commonly cited attributes of good doctors – reputation, technical skill, pedigree and bedside manner--- and distinguishes them from uncommonly cited attributes of good doctors such as reliability and accessibility. What physicians have traditionally valued in their assessment of what makes the best physicians is more and more at variance with views of high quality expressed by regulators and payers, and is rarely based on data. How to marry both views and improve quality of care is a persistent challenge which we believe can be met through the kind of organized analysis which we present in our framework for physician engagement in the IHI white paper.


The increasing emphasis on quality as a basis for fraud and abuse enforcement is now clear. Yet many compliance officers are not integrated into the quality activities of the organizations they serve. In her viewpoint on “Doing What Really Matters: The Compliance Connection to Healthcare Quality in the Journal of Health Care Compliance, Alice presents three activities through which compliance officers can work more effectively on quality issues in addition to the fundamental challenge of raising the consciousness of the board and administration of any healthcare entity to these new quality mandates.


UFT-A principles call for using clinical practice guidelines at the center of a wide array of administrative and clinical processes, and most particularly with respect to payment. A fascinating report on one organization’s response to a managed care plan’s creation of a high performance network (a far narrower network for more efficient providers) can be found in the story of how the Virginia-Mason Medical Center (VM) redesigned care delivery to achieve better payment. Aetna had been planning to exclude VM from its Aexcel program, but four major employers agreed to reconsider including VM if they would work toward specific cost reductions. The report of the steps that were taken is especially interesting coming from a health care system that was revamping many of its clinical processes to achieve stellar results. VM is widely regarded as a principal avatar for implementing the Toyota production model in American health care. This story is particularly intriguing since Aetna represented only 10% of the Seattle market.

The innovations relied significantly on the use of guidelines-based care. For the relatively limited services on which they focused --- pharmaceuticals, emergency department visits, diagnostic testing, some physician services in treatment of migraines, use of magnetic resonance imaging, and treatment of GERD – there were some limits to the exercise. There was no formal program evaluation and therefore no comprehensive data corresponding to the major cost centers that had been initially identified as meriting change. The impact of VM’s interventions was difficult to assess because relative data remained proprietary. The impact on VM’s margins was also entirely unclear.

Despite these limitations, the elements of success in the program reflect many of the UFT-A principles and some that mirror PROMETHEUS Payment® principles. The collaboration among purchasers, health plan and provider was critical, as was access to detailed cost data. This issue raises, yet again, a fundamental problem – namely, even very sophisticated and highly integrated provider networks have virtually no data available with respect to what it costs them to treat a patient for a condition. Providers ought to begin to develop this data whether PROMETHEUS Payment® comes to their local movie theater soon or not.


Improved clinical collaboration, which is at the core of the PROMETHEUS Payment® program, also is relevant to the five UFT-A principles – (1) standardize; (2) simplify; (3) make clinically relevant; (4) engage the patients; and (5) fix accountability at the locus of control. These principles, combined with highest and best use of all clinicians, administrative burden reduction and reinvigorated time and touch with patients, will be keys to PROMETHEUS Payment® success too. In fact, much of what the new payment model rewards, providers should be doing anyway, whether anyone pays them differently or not. Quality driven efficiencies – not in the “who is cheapest” sense, but in the “how can we be more resourceful and use our time and resources better” sense --- ought to compel providers today. UFT-A calls for the methodical elimination of self-imposedinefficiences which steal time and touch from care. In her editorial "A New Payment Model for Quality: Why Care Now?" Alice articulates some of the tenets of PROMETHEUS Payment® that all providers should be working to make real without a new payment model.


Clinical practice guidelines (CPGs) are the foundation for UFT-A principles and also the predicate for PROMETHEUS Payment® Evidence-informed Case Rates®? (ECRs®). In their article (Crit Pathways in Card 2005; 4: 161-167), cardiologists John Brush, Martha Radford and Harlan Krumholz confront the complexity of many CPGs – and particularly the spectacularly well documented ones of the American College of Cardiology/American Heart Association – and how that impedes their implementation on a day to day basis by practicing physicians. Published in 2005, their propositions have not been widely discussed, but the issues presented will have to be addressed if CPGs are to be used more widely than they have been. The application of the ‘heuristics’ they cite as endemic in the practice of medicine --- unwritten rules of thumb, practical short-cuts, and other work-arounds – must be explicitly acknowledged and taken into account to get to more standardized and evidence-based care. Fortunately they offer specific solutions for professional organizations creating CPGs and physicians who would seek to apply them. All will lead toward more reliable standardization to the science.


The creation of ‘high performance networks,’ which tier and exclude some providers with the stated purpose of incentivizing patients to go to the ‘better’ physicians has met with considerable alarm from physicians. Decried as purely networks of the cheapest, the debates today include direct challenges to the quality of the data used to exclude some in favor of the preferred status of others. The tensions are only escalating. In “Doctors Rated But Can’t Get Second Opinion” the Washington Post reports on tiering programs with report cards in Massachusetts, the District of Columbia, Seattle, New Jersey, New York and Connecticut which have met enormous resistance, including a threat by the New York Attorney General to enjoin United Healthcare’s implementation there of the program it launched in St. Louis. Lawsuits abound and the struggles over the intersection of cost and quality continue.


David Eddy has long been regarded as one of the most prominent and elegant thinkers regarding evidence-based medicine. His 1998 article on performance measurement in Health Affairs presaged many of the issues, including attribution, now being decried in the context of pay for performance. In 2005 he wrote about the confounding by most users of the term ‘evidence-based medicine’ to apply to both the evaluation of the quality of the science supporting clinical processes as well as a separate and distinct concept of the application of that valuation to other societal choices related to payment and benefit coverage. Now, in a provocative dialogue with Sean Tunis, who formerly managed technology coverage policy for CMS, David elucidates further the boundaries of true 'evidence-based' medicine, and its applications. Without cost and value judgments introduced in the application of the evidence to the policies for which it will be used (e.g., coverage and payment policy), though, he argues that the application of the first part of the analysis (what is the quality of the evidence on which clinical activities should unfold) is not enough. “What people need to realize is that by pretending to ignore costs, we are not only wasting money, we are also spoiling quality. If one cannot consider costs, then there is no way to address efficiency or set priorities.” “…[A]fter you have analyzed the evidence for a performance measure, you still have to make a value judgment about whether the benefits of increasing performance outweigh any harms and justify any costs.”

UFT-A principles would say that if you start with CPGs based on the best evidence available, which often includes reasoned consensus, and evaluate the resource costs associated with providing that continuum of care for a condition, there is a better chance that much of equivocal value would be excluded. The PROMETHEUS Payment® program is beginning with Evidence-informed Case Rates™ calculated from claims data, which everyone recognizes is not ideal. Starting with calculating payments made in large, national claims databases for core services required by guidelines, adding dollars for discretionary services recommended by guidelines but not for all patients, augmenting that with an explicit additional financial margin for providers, plus a “warranty” corridor for expected appropriate clinical variation, combined with risk adjustment, the Design Team believe the major drawbacks to using claims data to construct rates has been confronted. We think this represents a far better accounting for the kinds of decisions David calls for than what has existed in any other payment models of which we are aware.The longer range view of PROMETHEUS Payment®, would expect providers to be developing far more explicit evidence of what it costs them to treat their patients in accordance with science.


The interest of federal prosecutors in quality has never been as intense as it is today. As a dramatic manifestation of prosecutorial focus on board responsibility for hospital quality generally and “the quality we are paying for,” attached is a PowerPoint presentation created by James G. Sheehan, formerly Associate Attorney in the U.S. Attorney’s Office of Philadelphia. He is particularly interested in how boards remain indifferent to quality while cheerfully accepting the financial rewards of less than optimal care. You will note that, as in many prior instances, he is identifying both specific cases that will be models for future prosecutions as well as upcoming new approaches to prosecution. He has always followed through on such public statements. All hospitals should take heed.


For those not familiar with the role of the Office of the Inspector General as distinct from the Department of Justice, testimony by Daniel Levinson, on the occasion of the 30th anniversary of the OIG, the 20th anniversary of the False Claims Act, and the 10th anniversary of HIPAA, provides a focused look at the breadth of their activities.


When Congress appropriates $1.35 billion dollars for physician quality improvement initiatives, the federal government is getting serious about quality. Section 204 of the Medicare Improvements and Expansion Act of 2006 created a demonstration project to evaluate the viability of the “medical home” concept sponsored by the American College of Physicians and the American Academy of Family Physicians for primary care physicians to coordinate care on quality issues. At the same time, under Section 203, the OIG was called on to report in two years on “never events” (e.g. amputating the wrong leg, operating on the wrong patient) which the National Quality Forum has identified as errors that should never happen. The issue for the government is how to avoid paying for these events and to what extent payment is denied. For example, if the wrong leg is amputated, should only the hospital not be paid or also the anesthesiologist and the surgeon who participated? These questions have no answers yet, but the Congressional focus on these issues brings Medicare far more in line with the direction private industry has been moving, and rather faster than has typically been the case.


Quality is increasingly becoming part of the basis on which providers compete. While advertising about quality really began with managed care organizations, it has now spread to many hospitals and increasingly will be of interest to physicians. The issues associated with physician advertising, including trademark, liability and branding concerns, are addressed by Daniel Shay in his 2007 Health Law Handbook chapter “Four Out of Five Doctors Need to Know: Legalities of Physician Advertising.” These matters are of increasing concern to our clients, beginning with the plethora of generic names which they use to describe themselves. Diagnostic testing services all over the country call themselves “Cardiac Diagnostic Services”, “Diagnostic Cardiology Services”, and the like. Similarly “Cardiovascular Associates”, “Cardiovascular Consultants” and “Cardiology Consultants” can be found in every state. This is not smart marketing. There is no question that consumers get confused and contact the wrong providers. Savvy physician groups will look at Daniel’s article.


The Ventura County California hospital-medical staff case generated a firestorm of controversy regarding board involvement in medical staff governance before it was eventually settled. The parties had very intense views regarding the matters at hand. (See the views expressed by the the attorneys representing the physicians.) Subject to significant physician advocacy, the California legislature enacted a law establishing the medical staff’s right of self-governance in the most explicit terms ever . Specific topics statutorily reserved to the medical staff include selection of clinical criteria and standards to oversee and manage quality assurance and other medical staff activities, selection and removal of medical staff officers, and the right to retain and be represented by independent legal counsel. In case of any dispute on these issues, the medical staff and hospital governing board are obligated to meet and confer in good faith to resolve the dispute. Astonishingly, though, the statute says that when any person or entity is even about to engage in acts or practices that hinder or restrict or obstruct the ability of the medical staff to exercise its rights, the superior court “on application of the medical staff” may issue an injunction. (West’s Ann. Cal. Bus. & Prof Code §2282.5). While acknowledging the ultimate authority of the hospital board to protect the quality of medical care and competency of its medical staff, the legislature explicitly stated that their final authority may only be exercised with a reasonable and good faith belief that the medical staff has failed to fulfill a substantive duty pertaining to quality of patient care.

Many commentators have characterized this legislation as establishing that the medical staff must be considered an independent legal entity. If that were true, for many reasons it would be a disaster, although there are physician advocates that have long called for this approach in the form of incorporating the medical staff. Certainly the medical staff counsel in the Ventura case makes that argument. We do not read the statute as requiring that the medical staff be seen as an independent entity and will be keenly interested in how it is interpreted by the courts.

The new possibilities for liability where a medical staff is separately incorporated are significant: It will then be able to conspire with the hospital board under antitrust principles pertaining to credentialing. It will have its own separate malpractice liability for negligent credentialing. It would not be protected under the hospital’s own director and officer’s liability insurance but rather would have to obtain its own. The full interpretation of the statutory provision is not yet known; but for medical staffs which act responsibly to surveil the quality of care in the organizations to which they direct their attention, the decision to incorporate should not be lightly taken. While ‘bad cases make bad law’, the essence of this law is not bad. It’s interpretation in already difficult circumstances could create serious consequences. In the last analysis, the extremely critical role of the organized medical staff for quality assurance and particularly among their peers, is strongly supported here. How to change the way medical staffs and hospitals interact around quality is the key challenge for hospitals of the future and a substantial theme in our work. (See “In Common Cause for Quality”, “Engaging Physicians in a Shared Quality Agenda”, “W(h)ither Medical Staffs? and more throughout Latest Issues and in Publications


Many physicians have long been suspicious of public quality reporting efforts because they fear the data is wrong, it really only reports who is cheapest and not who is good, and the accumulated data will be used for nefarious purposes. As payors have moved more into the arena of efficiency measurement with Episode Treatment Groups (ETGs) and the like to evaluate physicians, the tensions have continued to escalate. In “Doctors Dispute Quality Rankings” the Pittsburgh-Post Gazette reports very recent scuffles over the same issues which have been in contention since the earliest days of report cards and quality reporting. Achieving a balance between measuring efficiency and quality in report cards is a major challenge for the current quality-driven environment. Fixing accountability at the locus of control is a cardinal principle of UFT-A that would ameliorate some of these problems; but the primary concerns are both transparency of the metrics and equitable application of them in a way that users of the data can apply appropriately and subjects of the data need not fear will distort their circumstances.


The challenges of the current payment system have been enumerated and addressed in many quarters. The limited sustainability of Pay For Performance is well established. PROMETHEUS Payment® is emerging as another option that will offer opportunities to providers and payers to lower their administrative burdens, improve transparency, enhance quality of care and generate fair payment for appropriate procedures. In order to succeed under PROMETHEUS Payment®, physicians, hospitals and other providers will want to collaborate in far more explicit terms than they have until now. There will be management challenges. In the first published article from the design team, “PROMETHEUS Payment®: Better for Patients; Better for Physicians, Alice illuminates the challenges for physician practices and the two ways that PROMETHEUS Payment® can be made to them. The website at www.prometheuspayment.org offers additional resources and information.


Pay for performance programs as currently configured, while a positive development in terms of focusing attention on the relationship between quality results and payment systems, have inherent limitations, as we have described in various publications. How PROMETHEUS Payment® addresses the shortcomings of P4P is important to understand. In addition, group practices are ideally suited to take on PROMETHEUS Payment®, but only if they also change their systems to be more efficient with measurable quality. In "Getting Beyond P4P: PROMETHEUS Payment® and Group Practice", Alice elucidates the potential positive nexus between the new payment model and group configurations.


The need for broader implementation of electronic health records (EHR) and electronic prescribing has been decried far and wide in healthcare policy, including by the appointment of a healthcare technology czar within DHHS. The long awaited regulations under Stark and the antikickback statute permit plans and hospitals to provide EHR and e-prescribing software programs and assistance to physicians. This is a profound and important development which merits close attention because, while the regulations have improved the environment immeasurably, they are not without ambiguities. In these PowerPoint slides the basics of the distinctions in what is permissible under each law is summarized. But issues associated with the prohibition on providing physicians with a program when they have substantially the same software in place already presents some significant challenges. What is substantially the same or similar? Requiring physicians to pay 15% of the cost of the software can present a problem when the hospital has a single license. In addition, because this exception to the prohibitions on hospitals providing tangible goods of real value to physicians who refer to them, was adopted as part of the Medicare prescription drug benefit enacted by Congress, there are mandates that e-prescribing be part of the software. The real point is that if quality is really to advance more quickly than following its glacial pace of the last thirty years, widespread movement to electronic record support is critical. These regulations are a major step on that pathway and should be examined carefully by physicians, hospitals and plans.


P4P programs are being adopted far and wide in this country, despite the general acknowledgement that they are transitional. In a fascinating interview with one of the managers of the British pay for performance program which was adopted nationally, Bob Galvin has elicited some real insights into the limitations in the design and implementation of P4P programs. Among the problems the British faced was a vastly increased payout over what had been budgeted and expected, in part because they were paying more for what was already being provided. This issue has been raised by Meredith Rosenthal and her colleagues at the Harvard School of Public Health even in the early years of American P4P.


In considering the potential impact of quality-based payment incentives, a usually overlooked problem is how P4P incentives are used and/or distributed within the systems and physician groups to which they are paid. Without paying attention to those effects, it is not possible to evaluate how the incentives actually influence behavior. In "Incentive Implementation in Physician Practices: A Qualitative Study of Practice Executives Perspectives on Pay for Performance (Medical Care Research and Review,Vol 63, No 1, Supp. To Feb.2006, pp 73S-95S) Barbara Bokhour and colleagues surveyed executives of physician group recipients of P4P payments in Massachusetts regarding how they used the incentives within their groups. There were some differences which turned in part on the style of practice (e.g., within an IDS, free-standing, hospital-affiliated) but the evidence showed there was little systematic study of this problem.


In a blog interview conducted by a surgeon who has been a client,
Alice is questioned about how she became a health lawyer, her views on
P4P, why she didn't become a physician and more. For a real change of
pace go to http://insidesurgery.com/.


In pursuing its new initiatives to link board certification activities to dynamic, active quality work, the American Board of Internal Medicine through its Foundation, commissioned and is now making available a compelling video program "Putting Quality Into Practice -- Physicians in Their Own Voices", which simply presents exactly that -- physicians who have come to understand what it has taken them in their practices to implement serious quality improvement projects describing their experiences. No voice-overs, no didactic presentations, the power of the story comes from the practical experiences of internists from disparate practice settings speaking to the joy that quality work has added to their professional lives. An excerpt of the video can be found at www.abimfoundation.org. We recommend it for anyone seeking to encourage physician engagement in quality.


In the May 11, 2006 issue of the NEJM, George Annas, a lawyer who teaches in the Boston University School of Public Health, had published an article calling for the creation of a patient's right to safety through litigation against hospitals. His ideas are consistent with ours presented in "The 100,000 Lives Campaign: Crystallizing Standards of Care for Hospitals". But, while we share the view that litigation is to be expected when hospitals fail to implement the six planks of the campaign, we believe that the enrollment of 3100 hospitals nationwide has created that change already. IHI has announced that more than 122,000 lives have been saved as a result of the campaign, but also that even enrolled hospitals have been very variable in the extent of their implementation. That variability will also raise the liability stakes even higher than they were in November, 2005 when our piece was published. The focus of litigators on patient safety and quality is taking very different turns. Erin Brockovich has become the plaintiff in a false claims whistleblower case against at least three health care systems, based on medical errors. We have heard rumors, on legal listserves, of pending class actions with regard to these issues. The legal tide is turning regarding hospital liability for patient safety.


PROMETHEUS Payment® Inc. is a new not for profit corporation which has been established to steward the further development and implementation of a new provider payment model. PROMETHEUS payments is specifically designed to improve quality, pay the right amount for the best science we know, and lower administrative burden, both to providers and plans. Provider payment Reform for Outcomes, Margins, Evidence, Transparency, Hassle-reduction, Excellence, Understandability, and Sustainability, is intended to address the limitations of pay for performance with a program that is relatively easy for plans to implement, and has as one of its bedrock principles, transparency of all aspects of the mechanism. Alice Gosfield has been intimately involved in the design process since its inception in December 2004. Jim Reinertsen served as an expert resource. Alice is the Chairman of the Board of PROMETHEUS Payment® Inc. PROMETHEUS Payment® is not intended to supplant fee for service and capitation. It is intended to substitute for it in those instances where it makes sense to do so. The model is voluntary, collaborative, and expects negotiation between plans and providers. To learn more read "PROMETHEUS: Provider Payment for High Quality Care."

A vendor has been selected to develop the core of the "Engine" -- the critical software to manage the data needs to track which providers are delivering what care, how money is to be allocated among them, and how they are doing in rendering the care they have bargained to deliver. Five clinical topic areas have been chosen for the first implementation of PROMETHEUS: interventional cardiology; chronic and preventive care, orthopedics and cancer. Pilot markets are being selected. Working groups which include practicing clinicians have been selected and will convene to select the CPGs for payment, consider which providers most often render which pieces of the CPGs, consider appropriate measures of whether the CPG has been provided, and determine appropriate clinical risk adjustments. The work is on target for implementation in early 2007.


The impetus for quality comes in many forms. We have authored an article in the November/December 2005 issue of Health Affairs, "The 100,000 Lives Campaign: Crystallizing Standards of Care for Hospitals", which makes the case that IHI's 100,000 Lives Campaign has changed overnight the legal standard of care for hospitals throughout this country --- whether they enrolled in the campaign or not. We elucidate why. We speculate on the kinds of cases which failure to implement the six planks of the campaign will generate. We look at the top ten reasons hospitals get sued and place the planks in that context. Risk avoidance certainly adds to the business case for quality. And then we say why fear of malpractice liability is not the principal reason to implement the six planks, but it might serve to “bring up the rear” in implementation of these lifesaving measures. Vanguard hospitals have already implemented these planks for the most powerful of reasons: if patients are dying in our care, and we know how to prevent many of these deaths, leaders have a moral, professional, and mission-driven duty to act.


As health plans and health systems have consolidated and fraud and abuse enforcement has intensified throughout healthcare, the natural tendencies in any other industry for business partners to find ways to benefit each other economically in win-win strategies has been stifled in health care. Anxiety over fraud and abuse and antitrust risks, has gotten in the way of hospitals and physicians on one hand and health plans and physicians on the other working together for their mutual economic benefit with the purpose of improving quality. In a new chapter in the Health Law Handbook, Alice makes the argument that until the three principal drivers of the care that patients receive in this country take common ownership of the quality mission and stop thinking of themselves as disparate, adversarial stakeholders, quality will never advance to the levels we would like. In "In Common Cause for Quality" she articulates a perspective on how to consider a business case for quality, sets forth the quality demands on hospitals and health plans which cannot be met without the full cooperation of physicians and debunks the myths that the law impedes collaboration which benefits any party economically. She then enumerates 10 specific strategies by which hospitals and health plans can advance the physician's business case for quality through activities with direct beneficial financial impact on those physicians. She also presents 6 additional strategies through which physicians can and will have to help hospitals to optimize their quality efforts.

In "Enhancing Oncology's Business Case: How the Hospital Can Help" she presents a crisper version of these arguments in terms of how oncologists can safely look to their hospitals to help them with their own quality demands.


The role of clinical practice guidelines has been criticized as problematic as applied to older patients with co-morbid diseases -- likely to increase costs if used for payment and to harm patients if CPGs developed for single conditions were merely cumulated and applied to frail elderly with complex conditions. (See Boyd et al, "Clinical Practice Guidelines and Quality of Care for Older Patients with Multiple Co-Morbid Disease", JAMA 2005; 294: 716-724). Similarly, others have decried the difficulties of using CPGs on the ground in every day practice. (See, Brush et al, "Integrating Clinical Practice Guidelines Into the Routine of Everyday Practice," Critical Pathways in Cardiology 2005; 4: 161-167). There is no question that most CPGs have not been developed with either application in mind. And the need for better CPGs, developed with a clear eye toward their eventual applications, would improve this set of circumstances. Yet, as we have argued in our White Paper, the use of CPGs as the basis for payment, initially for simple conditions and eventually for those more complex, would profoundly advance the business case for quality, make life easier for those delivering care and improve the quality of care itself. Now this fundamental concept is coming to life in a multi-stakeholder project in which Alice is participating in the principal working group, and Jim has acted as a resource and reactor. As set forth in a recent letter to the editor of JAMA, this payment model, which is soon to go public, is intended to incorporate appropriate clinical flexibility, combined with a comprehensive scorecard with the goal of higher patient and physician satisfaction along with improved quality. We are available to present on this payment model.


Continuing its demonstration that quality is a fraud and abuse concern, the Department of Justice entered into a settlement agreement with a small hospital over its use of physical restraints. Of major significance is the Department’s own assertion that the "First Fraud and Abuse Settlement Based on Failure of Care Claims" is the first of its kind in the nation addressing failure of care claims based on alleged violation of regulatory requirements. In this instance, the requirements pertained to physical and chemical restraints at the medical center that ended with the death of a restrained elderly patient in 2002.


While quality performance measurement initiatives have received considerable attention and are rising to the fore as a significant force in the healthcare market place, less appreciated is the sub-rosa use of “efficiency measures” by health plans to evaluate resource consumption (i.e., costliness) by providers. While health plans have been using these proprietary software measurement programs for some time, there is now an increasing appreciation that making efficiency information available can serve a variety of useful purposes other than simply excluding providers from networks. In California and Washington new programs to inform physicians as to their relative efficiency evaluations are being touted as important developments to facilitate delivery of appropriate quality care. In Tennessee, the hospital association has joined with a local Blue Cross/Blue Shield plan to publish report cards on efficiency performance. Bridges to Excellence has issued a white paper addressing principles associated with equitable efficiency measurement.

The rise of quality performance measurement and public reporting, controversies associated with these activities, and potential legal liabilities are addressed in the new AGG Note, “Performance and Efficiency Measurement: Implications for Provider Positioning” This phenomenon further underscores the value in physicians, in particular, coming together in clinically integrated networks to improve their performance, learn from each other, develop data that can be shared with payors in a meaningful way, and potentially collectively bargain over fees. This AGG Note offers practical steps to begin integrating.


Congress has stepped into the debate regarding protection of potentially negative quality information in the interest of improving quality with the Patient Safety and Quality Improvement Act of 2005. Providers who come together to engage in patient safety activities and report their “patient safety work product” to “patient safety organizations”(“PSOs”) can be assured that the data they are reporting will be protected from discovery and will be treated confidentially, at least as the law reads. Judicial interpretation may produce different results. Courts have undermined many state peer review protection acts; but to be fair, most were enacted in the mid-1970’s and their drafting did not anticipate the very different context today in which plaintiffs seek to use them.

“Patient safety activities” are broadly inclusive and go well beyond strict patient safety. Any organization seeking to be recognized as a patient safety organization must be involved in: efforts to improve patient safety and quality of healthcare delivery; collection and analysis of patient safety work product; development and dissemination of information to improve patient safety such as recommendations, protocols, or information regarding best practices; utilization of patient safety work product for the purpose of encouraging a culture of safety and providing feedback and assistance to minimize patient risk; maintaining procedures to preserve confidentiality with respect to the work product; providing appropriate security measures for the work product; using qualified staff and engaging in other activities related to the operating of a patient safety evaluation system to provide feedback to the participants. A “patient safety evaluation system” means collection, management or analysis of information for reporting to or by a patient safety organization. The data protected includes written materials, reports, records, memoranda, and analyses as well as oral statements. The statute provides for the creation of a network of patient safety databases. Moreover, patient safety organizations self-nominate and attest to their certification that they qualify.

The statute is self-executing and effective upon enactment. Obviously some administrative mechanisms will be necessary for PSOs to list themselves. And the Secretary does have authority to issue regulations, which may clarify the import of this statute. Nonetheless, this law has the potential to facilitate robust quality relevant activities and provider groups would do well to consider taking advantage of whatever protections it does offer.


A recent study in JAMA makes the argument that clinical practice guidelines applied in combinations for elderly, frail patients with co-morbidities if used for payment can lead to unintended negative consequences. Increased costs as well as overmedication and adverse pharmaceutical interactions are all possibilities. In some ways the article stands for the proposition that clinical practice guidelines are still some distance from ideal construction. While the Institute of Medicine stated attributes of good guidelines, among which are specificity and applicability of the guidelines to appropriate patient populations, the IOM did not speak to the notion of how the guidelines would be applied programmatically and that their construction ought to reflect those uses. As pay for performance programs and performance measurement continue generally to turn on the contents of guidelines, this issue will become even more significant.


Another consideration of clinical practice guidelines speaks to our longstanding concern about availability of time to deliver evidence based medicine. In an article in the Annals of Family Medicine researchers applied guidelines recommendations for ten common chronic diseases to a panel of 2500 primary care patients with an age-sex distribution and chronic disease prevalences similar to those of the general population. They estimated the minimum physician time required to deliver care called for in clinical practice guidelines. While the conclusion of the researchers was to caution guideline developers to consider carefully the time required to follow recommendations, or to suggest development of models of care management that require less time of primary care physicians, they neglect to address the external forces within which guidelines are operating that create these time demands. Whether the issue is literally the time it takes to interact with the patient to deliver EBM or all of the activities associated with seeing the patient (eg. documentation , prior authorizations) is not addressed in this consideration. Nonetheless, the issue of time and touch continues as a theme that deserves additional consideration if we are to advance quality in significant ways.


In California, flow of dollars to physicians is somewhat anomalous by comparison with other markets. In a recent article in Community Oncology, Linda Bosserman, M.D. describes some of the more pernicious effects of health plans subcontracting with for-profit networks to manage the payment to physicians providing specialty care. Her practice in Beverly Hills has been well organized around evidence-based medicine for some time. Still, the implementation of the payment model there and the positions taken by intermediary networks in allocating specialist payment has undermined their ability to provide quality care to their patients. There are controversies around the California structuring of these payment relationships. Despite her criticisms, Linda calls for physician practices to organize themselves in a way that will maximize their opportunities in such a restrictive environment.


In an article in Community Oncology, Alice makes the argument that because of the perverse impact of the Medicare drug payment model on oncology practices, they have neglected to focus on their own business case for some time. When much of your income is driven by profits made on the provision of pharmaceuticals to patients, a reduction in that payment can result in significant practice dislocation. For oncologists, the moment may well be optimal to really consider clinical integration. In “Better Quality, Better Margins: Seizing the Moment” Alice elucidate these connections in relationship to the application of UFT-A principles.


For health care organizations to achieve significant advances in quality, the role of leaders is essential. Jim and his colleagues at the IHI have developed a set of seven leadership leverage points for leaders to consider if their aim is to achieve system level results. These leverage points are described in a paper that also forms the core framework of the IHI Executive Quality Academy, an intense one year program for teams of senior executives seeking to break through to the next level in quality performance. Jim directs the Academy which is a one year program. More information about both can be found at his website.


The dual themes of improving quality of care and physician quality of life including the physician business case are evident in the New Model of Family Medicine which is being promulgated by the Future of Family Medicine Project of the American Academy of Family Medicine and other family medicine organizations. In addition to proposals for change in medical education, residency training and practice organization "to better meet the health care needs of patients in a changing environment" the project has proposed that family medicine roeritent practices to provide a personal medical home for each patient, patient centered care, a team approach to care, advanced IT systems, redesigned, functional offices, whole person orientation, care provided within a community context, emphasis on quality and safety, enhanced practice finances through operating efficiencies and new revenue streams and a commitment to provide family medicine's 'basket of services.' Bruce Bagley , MD, AAFP's medical director of quality improvement, explains the practical implications of this approach to family physicians in "The New Model of Family Medicine: What's In It For You?" Many of the implications of this new model resonate with UFT-A principles including standardization, highest and best use of clinicians in a team approach, engagement of the patient and more. In a companion consideration, "Is the New Model of Family Medicine Financially Viable?", Stephen Spann, MD, reports the business case for the new model including calculations of practice savings and improved revenues for adopters of the model based on predictive modeling by the Lewin Group measured against fee for service and other alternative payment approaches such as P4P. Obviously they did not model any UFT-A based payment system explicitly, but their assessment of economies and benefits to be achieved track closely to what we have propounded theoretically in our work.


In its Jan/Feb 2005 issue, Health Affairs offered a range of articles confronting issues in evidence based medicine. One of them, by Timmermans and Mauck, cited a number of barriers to widespread physician adoption of clinical practice guidelines. We noted that where guidelines are nothing but an add on to a system which imposes unmanageable administrative burdens already, there is little to motivate physicians to use them. Our letter to the editor, published in the May/June 2005 issue of Health Affairs, points out that to use CPGs as the foundation for all processes, both administrative and clinical, makes a far better business case for their use.


Since the inception of the DRG program in 1982, hospitals have been trying to find a way to motivate the physicians on their staffs to work with them to lower expenses by sharing savings generated. These 'gainsharing' notions had been virtually precluded to them going back as far as a Paracelsus hospital company program in 1983, and then in more modern iterations, by virtue of the OIG's Special Advisory Bulletin on Gainsharing Arrangements in 1999. Although the OIG approved one gainsharing program 18 months after the Bulletin (see discussion in Alice Gosfield's article on "Making Quality Happen: In Search of Legal Weightlessness"), the structure and operation of that program seemed sufficiently idiosyncratic as not to offer much by way of a model. Now the OIG has published six advisory opinions approving 'gainsharing' programs, where cardiologists and cardiac surgeons will be permitted to share in the savings hospitals generate by virtue of standardization of surgical supplies and their uses. As we note in our five principles for UFT-A, standardization for purposes of quality is important as an element of a business case for quality; but the advent of these gainsharing approvals further supports a business case for broad and deep standardization to the evidence. On the other hand, the gainsharing programs are time limited, appear to be predominately applicable in surgical contexts or analogous circumstances and hardly will serve to drive a sustainable business model for physicians.


Clinical integration has been held out by the FTC in every physician network settlement into which they have entered in the last few years. "You can't do this, but if you were clinically integrated you could." Some have questioned whether clinical integration is really available as an option to facilitate providers bargaining with payors. Brown and Toland in California was the subject of an FTC enforcement action in 2003 for their PPO bargaining activities. When they eventually settled, they agreed not to undertake any PPO bargaining unless the FTC prior approved what they were doing as sufficient clinical integration. The FTC has now reviewed Brown and Toland's ( B & T) approach and has said it represents enough clinical integration to permit negotiations, but they will still be subject to review for conformity with the integration principles. B& T says that the elements of integration they have adopted are a utilization review program, disease management and case management activities and an electronic medical record. This is meaningful because until this point there has been only one advisory opinion which addressed acceptable elements of clinical integration and now the B & T program is different. The FTC says it will review their actual implementation; but this action stands for the proposition that clinical integration is alive and well. It also means clinical integration does not require a uniform approach consistent in every respect with the hypothetical facts set forth when its permissibility was first published by the FTC in 1996. We think that UFT-A offers an option which will, by its implementation, create appropriate clinical integration to qualify for joint bargaining.


In December 2004, Anthem Blue Cross Blue Shield convened their Fall Health Care Leadership Forum with the theme of "Paying for Clinical Excellence: Strategies for Crossing the Quality Chasm." Alice Gosfield keynoted the event with a presentation on "Doing Well by Doing Good: Improving The Physician Business Case for Quality," which, as in the original white paper of the same title, draws on Jim Reinertsen's "axioms" (as Alice refers to them). The assembled participants, representing leadership stakeholders from medicine, business, insurance, consumer, hospital and other interests then broke into discussion groups to consider the points raised in the keynote, oriented around four questions. They reported their findings to the group. Caz Matthews, CEO of Anthem of Colorado, summed up the conference which essentially supported UFT-A and considered some practicalities in applying its principles. A report of the meeting and findings of the participants has now been published as a monograph.


In May, 2004, Jim Reinertsen participated in a full-day program sponsored by Health Alliance Plan in Detroit dealing with a plethora of approaches to paying for quality performance. As can be seen in the attached proceedings his presentation addressed implementation of UFT-A. Other presenters provided information on the need to create new quality incentives, the IHA experience in California, Medicare incentives for quality, and leadership challenges to quality improvement. A panel discussion addressed how actionable goals and measures drive performance and improve outcomes in multiple practice settings.


"You cannot improve what you cannot measure". "What gets measured, gets done." These truisms about quality improvement reflect the importance of performance measurement which is being used not only for P4P but also for network selection, reorganizing care delivery processes, and transforming the culture of health care organizations. For all of the policy interest in core data sets and standardization of measures, the current context offers anything but. The varieties of measures and measurers seems to be proliferating rather than consolidating. There are controversies and quandaries in performance measurement, as well as lurking legal liabilities both for those who would select and use measures as well as those who do not or do so ineffectively. In "The Performance Measures Ball: Too Many Tunes, Too Many Dancers?" Alice Gosfield offers a view of the new Medicare Modernization Act initiatives which relate to measurement; explores why the explosion of interest in measurement and measures now; clarifies concepts around measurement; provides a snapshot of the major players and their approaches including CMS, NQF, JCAHO, AHRQ and IHI; considers the significant controversies surrounding measurement initiatives; and speculates on legal pitfalls in this essential component of quality improvement and a business case for quality.


As quality policy has focused on improved content in quality improvement policies, CMS has both added to its conditions of participation and clarified medical staff privileging procedures to comply. Directing state surveyors regarding bases for Medicare participation CMS has refocused on the hospital’s privileging activities, reemphasizing that “the Medical Staff, as a group, is responsible for the quality of care provided to patients by the hospital, for establishing the bylaws, rules regulations, policies, etc, for the Medical Staff and for overseeing the quality of care provided by all the individual practitioners who provide a medical level of care or who conduct surgical procedures at the hospital.” CMS’s specific attention is directed to the extent to which privileging clearly and completely recognizes the specific competencies of individual practitioners. “It cannot be assumed that a practitioner can perform every task/activity/privilege listed/specified for the applicable category of practitioner. The individual practitioner’s ability to perform each task/activity/privilege must be assessed and not assumed.”

Recognizing the frequently practiced “paper chase” quality of medical staff privileging, CMS instructs its surveyors that “The Medical Staff must actually examine each individual practitioner’s qualifications and demonstrated competencies to perform each task/activity/privilege he/she has requested from the applicable scope of privileges for their category of practitioner.” Many commenters have taken the position that this direction regarding individualized competencies implicates the practice of “core privileging” which establishes threshold clinical criteria to demonstrate competence within a specialty area. The basic concept is that in order to have privileges within a department, the physician must be able to demonstrate core competency in a threshold bundled set of privileges. Anything more than the “core set” are “special privileges.” This reemphasis on how to privilege further draws attention to the potential utility in using clinical practice guidelines to establish criteria and evaluate core competency.


Even as JCAHO has expanded its attention on quality improvement activities in the hospital, hospitals that do not rely on “deemed status” based on their JCAHO survey will have to meet the CMS conditions of participation now require the hospital to develop, implement and maintain a data driven quality assessment and performance improvement program (42 CFR ' 482.21) which must rely on quality indicator data. The Board itself is held accountable for the operation of the program. (42 CFR ' 482.21(e)). This reemphasis further propels the initiative of hospital boards in stewarding the data driven quality improvement of their organizations.


There have been a number of attempts to articulate a “business case for quality” by defining measures of whether a quality intervention is worth undertaking. In an article in Health Affairs (“The Business Case for Quality: Case Studies and an Analysis”, 22 Health Affairs (Mar/Apr 2003)), Sheila Leatherman and her colleagues posited the following two measures to determine the business value of a quality intervention: (1) Does the investing entity realize a financial return in a reasonable time frame, whether actual profit, reduced losses or avoided costs?; and (2) Does the entity believe there is a positive indirect effect on organizational function and sustainability will accrue within a reasonable time? These measures focus solely on the impact on the entity engaging in the intervention.

We believe that this approach can not define a truly realistic, sustainable and likely to be implemented intervention. Rather, we believe that a business case can only be made strong if it takes into account its impact on other stakeholders. Consequently, we would propose the following measure of a business case: Is the intervention consistent with strategic goals, understandable, not too capital intensive relatively speaking, with positive impacts across stakeholders, and able to produce sustainable, acceptable margins, near term and long term? We believe that margins are vitally important and frequently ignored in considering the likelihood that an intervention will be adopted. Under this definition, we believe UFT-A principles do state a realistic business case.


The essential nature of the transaction that takes place between physician and patient, as first articulated by Jim Reinertsen in 1997, in “Health Care: Past, Present and Future” (Group Practice Journal, March/April 1997—Vol. 46, No. 2) is the critical touchstone for UFT-A principles. It has also been acknowledged in the Crossing the Quality Chasm statement that “Transferring knowledge is care.” High quality care, therefore, is care that occurs when the conditions permitting the most effective transfer of knowledge have been optimized. In her article, “The Doctor-Patent Relationship as The Business Case for Quality”, Alice Gosfield elaborates on these themes and the legal predicates for UFT-A.


In an interview in MetroDcotors: The Journal of the Hennepin and Ramsey County Medical Societies (July/August 2004), Jim Reinertsen was interviewed with regard to his optimism for improving quality over the next ten years, and what he would do if given the opportunity to make one single change in the health care system. Projecting “If I were King,” in this free wheeling interview he covers a range of topics from health system and insurance reform, to physician report cards and responses to physician anxieties about ‘cookbook medicine.’


To what extent does quality command the attention of health care organization leaders in the fast growing world of 'pay for performance', CMS hospital reporting mandates and the Leapfrog Group, among other initiatives? In January 2004, Jim Reinertsen facilitated a conversation among a highly selected group of health care executives focused around three questions: (1) Has clinical quality moved from “something that is professionally good to do, but not strategic,” to “I’d better make sure I hit my quality targets, or my job is on the line?”; (2) If quality has moved onto the strategic agenda, what do the new pay-for-performance models have to do with the shift?; (3) If quality is now strategic, and if health systems need to hit tough quality targets as reliably as they hit financial targets, how are they planning to succeed? His white paper, Straight Talk About Clinical Quality From Health Care CEOs offers a fascinating glimpse of how some of our finest health care leaders answer these questions.


In the January 22, 2004 issue of the New England Journal of Medicine, Arnold Epstein, MD, and colleagues presented a review of the new physician “pay for performance” models being implemented in regional trials around the country. For a variety of reasons we felt the piece should be addressed. In Paying Physicians for High Quality Care, you can read our response to Epstein’s paper, along with some other responses, and Epstein’s reply. Pay-for-performance is getting a lot of attention these days. But these early versions of “paying for quality” tend to focus on the problem of underuse, and don't address the very big quality problems of overuse and misuse. Furthermore, the revenue incentives tend to be small in comparison with the costs of correcting the underuse problems (which by definition require additional services to be delivered) and so the actual business case in many of these new payment systems is rather weak.


“Pay for Performance” (P4P) is a new phenomenon intended to incentivize physicians and hospitals to render high quality by paying them differently if they perform in accordance with criteria. From Leapfrog, to CMS, to the Bridges to Excellence program and the activities of the Integrated Health Association in California, there are many variations on this theme. That the government is in this game can also be seen their physician group practice demonstration and Premier Hospital Quality Incentive program. In “Contracting for Provider Quality: Then, Now and P4P Alice Gosfield explores the impetus for these programs, describes and analyzes their principal manifestations and considers how they relate to the contractual context within which they arise, both for hospitals and physicians. She concludes that while pay for performance is an important development, it is, at best, transitional and, as we first discussed in our White Paper “Doing Well by Doing Good: Improving the Business Case for Quality these initiatives do not make an adequate case for offering physicians improved financial margins despite increased revenue. In addition, because these are ‘add-ons’ to the existing contractual environment and the P4P programs often unfold with no supporting contract at all, they present real and unexplored challenges for the providers who participate. We continue to believe that payment systems that carve out a new approach with many of the same goals and features of these P4P programs are better.


To move health care organizations to truly transformed cultures and systems, especially for improved quality, requires extraordinary leadership skills. For health care organizations to embed improved quality as a driving core value throughout the enterprise demands very clear understandings regarding the specific role of leaders in making change happen. Jim Reinertsen has propounded “A Theory of Leadership for the Transformation of Health Care Organizations which draws on his work with the organizations involved with the Institute for Healthcare Improvement’s Pursuing Perfection projects as well as his fifteen years as CEO of two major complex health care organizations. He identifies six specific leadership challenges which are particularly relevant to transformations for quality. He considers four specific routes to transformation and enumerates eight practical steps to the preferred route to change. He sees this work as evolving and seeks reports from the field on its implementation.


One of the major thorns in the side of physicians confronting managed care payors has been their antitrust risk if they bargain for fees collectively. We have posited that ‘clinical integration’, which the antitrust regulators have said can permit otherwise collusive bargaining among competing physicians, is part of the business case for quality. In each of the physician and hospital network settlements, the enforcers have noted that the physician groups were not sufficiently integrated financially or clinically. In the settlement with Brown and Toland, the FTC imposed a new requirement that if they chose to bargain based on clinical integration they would have to submit their approach to the FTC before implementation. Given the dearth of regulatory guidance on point, and only one advisory opinion to date, it is with great pleasure that we are able to make available an important article from our 2004 HEALTH LAW HANDBOOK by Bob Leibenluft who was the head of the health care division of the FTC when the clinical integration opportunity was made available. In “Clinical Integration: Assessing the Antitrust Issues Bob, and his colleague Tracy Weir, elaborate on what clinical integration is about and acknowledge that the antitrust regulators have not seen much real clinical integration. We think that is probably true since much of what we are familiar with as purported to demonstrate clinical integration, in fact, does not go far enough. Still this article supports our case that doing what we suggest in our ‘unified field theory’ work would likely meet the regulators’ criteria.


An anomalous report, regarding the implications of EBM in a malpractice case runs counter to the clear data in the Ransom study which documented the malpractice protection EBM offers in terms of the use of clinical practice guidelines. In an essay in the New England Journal of Medicine, a young family practice resident reported on the “Winners and Losers in a situation where he saw a patient and did some screening tests, but did not perform a PSA test for screening purposes, explaining to the patient and documenting their discussions of risks and benefits of screening for prostate cancer. The resident never saw the patient again. The patient presented to a new doctor who found he had a very high PSA. The patient ultimately died of prostate cancer. At trial, EBM was characterized as a cost saving method and the plaintiff’s counsel in closing argument apparently urged the jury to return a verdict to “teach residencies not to send any more residents on the street believing in EBM.” While the implications are extremely troubling, this case stands more for the disparity between the standard of care in the locality and what the evidence demonstrates ought to be done, than as a precedent in any way regarding the benefits of EBM. Because the physician was a resident, the issue of the payment system is not reported on. That is a legal matter that would be relevant as well. While chilling in its outcome, the report is thought provoking with respect to the applications of EBM.


In a study of surveys of Dissatisfaction with Medical Practice , Dr. Abigail Zuger, et al., note in 2004 that one of the reasons we have proposed to subscribe to UFT-A principles persists. Data suggests that dissatisfaction on the part of physicians breeds poor clinical management as well as dissatisfaction and non-compliance among patients and that the rapid turnover of unhappy doctors in offices and hospitals may lead to discontinuous, substandard medical care.” Among the factors contributing to such dissatisfaction remains the strongly felt perception of lack of time. One sociologist noted that “Doctors’ anguish seems to come from violating everyday what they know they ought to be doing.” Interestingly, in addressing possible solutions, the author observed that some authorities advocate a conscious re-emphasis on professionalism in medicine; others suggest that non-professional sources of happiness such as time with family and friends and exercise is more important; and some propose that encounters between doctors and patients may provide “enough joy to serve as antidotes to other woes.” Astonishingly, the quality implications of solving this problem are not addressed at all. The study supports the need to develop an environment in which physician satisfaction can increase to avoid exacerbation of the quality problems that have been identified elsewhere.


One of the sub principles of UFT-A is for physicians to be saved for their highest and best use. This principle applied throughout health care would also free up time and improve results. This has been demonstrated in situations where innovation gives advanced practice nurses more responsibility in fulfilling the patient’s needs. At Hackensack University Medical Center, as reported in August 22, 2002, Modern Healthcare, physicians find themselves “Following Nurses’ Orders”(you must be a registered user). The hospital experienced very significant cost savings as well as time saving for the physicians. Peter Gross, MD, one of the participants in our original confab, is quoted in the article as indicating that by using advanced practice pulmonary nurses to scrutinize compliance in pneumonia care, within six months performance on most measures improved to 90% or better in the majority of cases. The system is now being expanded throughout the hospital. This approach supports the proposition that organizing care with an explicit focus on which clinician is best most appropriately to deliver care to the patient at a specific moment in time is also an important part of a business case for quality.


One of the challenges in using CPGs is the ‘quality’ of the CPG itself. When, in 1989, Congress gave AHCPR the responsibility to develop and publish CPGs, the agency turned to the Institute of Medicine for guidance on how to proceed. The IOM convened two committees -- one to advise the agency directly and then the second to look at CPG issues generally -- both committees in which Ms. Gosfield participated. In addition to establishing eight attributes of good CPGs, the second committee developed a ‘provisional’ document to be used to assess the extent to which any CPG manifested the eight attributes. (See, Lohr and Field, “A Provisional Instrument for Assessing Clinical Practice Guidelines” in Guidelines For Clinical Practice, National Academy Press: Wash. D.C., 1992, pp. 346-410). A decade later Crossing The Quality Chasm (a study in which Dr. Reinertsen participated), looked again at the quality of the evidence and the nature of the measures used in guidelines and evidence-based decision making. (See pp. 145- 159). Still the notion of ‘standards for the standards’ has not been widely addressed. The National Quality Forum is developing some standards to defuse the Tower of Babel effect of the proliferation of measures and standards for quality, but national standards for good CPGs have not been enunciated since the IOM’s eight attributes. Since UFT-A is predicated on deep application of CPGs or EBM, what defines a “good” CPG is important. A recent study reports a proposal for guideline standardization on a nine-point scale. The report by Shiffman et al, intends their scale to be used prospectively in the development of CPGs. The criteria track closely to but are more refined than the IOM standards. They, like the IOM, avoid the thorny issue of the extent to which costs should be taken into account in developing CPGs. Our UFT-A approach finesses this issue by confronting it squarely – to get to a new payment model, anyone implementing a CPG, whether for a chronic or acute condition, will want to cost it out.


As the malpractice insurance crisis intensifies around the country, the link between malpractice prevention and quality becomes even more important. Throughout the history of attempts to standardize care to the evidence, there has always been some anxiety about whether using clinical guidelines would prove valuable from a risk management perspective. Although there has been some work in the past looking at whether CPGs used in malpractice litigation more often inculpate or exonerate the physician, there is now a study that shows that in obstetrical care, “noncompliance with the clinical pathway in our retrospective analysis was associated with a six-fold increase in the odds of a malpractice claim.” (Ransom et al., “Reduced Medicolegal Risk by Compliance with Obstetric Clinical Pathways: A Case-Control Study”, Obstetrics & Gynecology (April 2003) pp. 751-755. In addition to the long supported proposition that a truly engaged patient, one with a good doctor patient relationship, is far less likely to sue the physician even in truly bad circumstances, there is now good evidence that standardizing to the science itself is more likely to prevent claims in the first instance.


UFT-A is likely to have its most significant payment reform opportunities in chronic care applications. A related delivery concept has been enunciated by Edward Wagner and colleagues in their work on articulating a chronic care model (CCM) which adopts five fundamental principles to improve chronic care within communities . This approach to care was considered extensively in May, 2003 in a meeting of critical stakeholders in six New England states addressing how to advance the quality of chronic care delivery with a new payment model. Although not characterized in these terms, much of what was discussed is consistent with elements of UFT-A – particularly standardizing to the science, engaging the patient actively and using clinicians at their highest and best use. The CCM may offer a good opportunity to bridge this complementary approach in chronic care to an improved payment model with broader applications of UFT-A principles.


On the other side of the country, in Whatcom County Washington, implementation of a communitywide chronic care model in the treatment of diabetes and CHF has been able to project both major health outcomes benefits and cost savings in a program which is not focused so much on payment as on care delivery. Here, analyzing the impact of standardized care which incorporates intense nurse/case manager involvement, the researchers project savings to the total health care system in the sixth year of implementation. Even so, meaningful impacts will be felt as early as the third year. Medicare and the pharmaceutical companies are the biggest winners over all, with Medicare appreciating significant savings from avoided hospitalizations; and pharmaceutical companies appreciating significantly increased revenues because of baseline underuse of appropriate pharmacologic treatments. Revenues to physicians and hospitals fall off though, and there is little attention yet to what type of payment model can effectively confront this effect. The study does at least frame the issue. Will the resulting shifts in care free these providers to provide more expensive services in substitution? Is there an explicit payment model – something other than basic capitation or fee-for-service – that more fairly confronts the interrelationships of the parties? This study does not get to those issues yet since its primary import is the fact that making these projections proved significant in obtaining buy-in from potential participants who could see clearly their part in an overall scheme.


Prosecutors are becoming increasingly interested in how quality implicates the fraud and abuse statutes. The OIG 2004 Work Plan targets 9 specifically noted medical necessity issues and 4 quality issues. From understaffing in hospitals, to care which does not meet professionally recognized standards, to over-utilization, the Department of Justice is separately using new theories of false claims and flat out fraud based on the clinical care rendered. Initially used to force some 40+ false claims settlements around the country with nursing homes, prosecutors have now made it clear they intend to use similar quality-based theories to prosecute hospitals for false claims. In the current environment of diminishing reimbursement and heightened attention to quality, the fraud and abuse risks from less than optimal clinical behavior can no longer be ignored. Unless these issues are addressed in compliance programs, those initiatives will remain mired in the narrow focus of the administrative minutiae of billing problems, leaving the health care enterprise vulnerable and their compliance staff isolated from the principal focus of the organization – delivering high quality care. At the same time, how to set priorities for compliance activities is beginning to stymie those compliance programs that addressed initial, low hanging fruit with corrective, voluntary actions. Many of the entities we work with are struggling with where to go next. Many seem to believe that the role of compliance is to forever search out errors to report and repay. We do not share this view. We believe compliance is about doing it right in the first place and cleaning up problems found. It is not about eternal internal inspection. In the AGG Note, “The Quality/Compliance Nexus: Moving to Programmatic Integration” Ms. Gosfield examines the developing enforcement environment, sets forth liabilities already on the books, and then discusses how using UFT-A in compliance can integrate its import into the fundamental mission of a health care enterprise.


Economic credentialing is only one of a growing number of sources of tension between medical staffs and the hospitals to which they relate, which tensions are growing as the dynamics of health care change. While the struggles within medical staffs engage the members whose oxen are being gored, they are far afield from the critical quality surveillance responsibilities hospital medical staffs could undertake in the American health care system. Because of the path many medical staffs have taken, in many ways, it is not unreasonable to ask ‘what is the value of the organized medical staff in the current quality-concerned environment?’ In a presentation to the Organized Medical Staff Section of the AMA in June, Dr. Reinertsen and Ms. Gosfield challenged medical staff leaders to confront the far more critical issues of quality to which they could address their attention. By doing so, and in fact far more explicitly adopting principles of UFT-A to guide the medical staff-hospital-board relationships, we believe medical staffs can be revitalized to perform roles more satisfying to them, more productive to the facilities and other clinicians working there and more meaningful to the patients in them to which they relate.


In the AGG Note, "The Organized Medical Staff: Should Anyone Care Any More?" Ms. Gosfield presents information regarding the genesis and legal basis for the medical staff, how bylaws relate to the new environment, typical bylaws contents and typical bylaws mindsets. She offers 7 principles of interaction along with 5 suggestions regarding how to revitalize and make easier certain key medical staff functions. She also reviews 5 of the hot potatoes in medical staff-hospital relationships including economic credentialing, EMTALA obligations, and cross-department privileging, among others. For a more extensive consideration of these issues see Alice Gosfield's article “Whither Medical Staffs?”, Dr. Reinertsen’s article in Trustees magazine, and his article which addresses barriers to quality within hospital processes , all incorporating aspects of UFT-A which we believe can be consolidated as a unifying principle for hospital-medical staff interactions, too.


On March 28, 2003 in Chicago, Alice G. Gosfield and James L. Reinertsen, MD, FACP, convened, with the generous support of Sanofi-Synthelabo, a unique meeting of 30 senior leaders (CEOs, CMOs, Senior VPs) from a variety of leading institutions such as Intermountain Health, Pacificare, Sutter, Scripps, Massachusetts General Hospital, CareGroup's Provider Service Network, HealthTexas (Baylor), Hackensack University Medical Center, Catholic Healthcare Partners, Mayo, EBM Solutions, Anthem, Institute for Clinical Systems Improvement, Oregon Health and Sciences University and others to consider, react to and develop further ideas first expounded in the AGG Note 'Gosfield's Unified Field Theory'. This theory, which Reinertsen and Gosfield now seek to move to practice and application ("the Unified Field Theory-Applied ["UFT-A"])   posits how to use clinical practice guidelines to drive physician payment and many other aspects of the health care system.

Informed by the conference discussions, Reinertsen and Gosfield have authored a White Paper, "Doing Well By Doing Good: Improving the Business Case for Quality." The paper considers

  • Current barriers to a physician business case for quality,

  • The limits of current attempts to address the business case,

  • The centrality of physicians to the American health care system,

  • Why physician time and touch with patients are essential quality problems,

  • Five principles for change which could revolutionize health care,

  • How clinical practice guidelines can provide a firm foundation for a unified system to reorder major aspects of health care delivery and accountability, not just for physicians, but throughout the system; and

  • Implementation challenges that will have to be addressed to make the theory real.

The goal of the paper is to stimulate rapid-fire trials in multiple venues. The conference attendees were interested in remaining in contact regarding initiatives, experiments and experiences applying these ideas. We have now established a listserve for those who seek to communicate in an on-going way about successes, obstacles and challenges to do this in local markets. We are hopeful this will be the beginning for broader initiatives that will expand to others.


The malpractice insurance crisis is affecting physicians and hospitals as never before. Physicians are retiring early and leaving states where premiums have risen to unmanageable levels. Picketing at state capitols, closing their offices for days at a time to demonstrate the impact of limited access, hurled invectives among trial lawyers, physicians and those who manage insurance companies have only shown how intense the stakes are. Although physicians and the current Administration in Washington have focused initially on caps on jury awards, none of the dialogue has focused on the link between quality and tort reform. For one proposal that focuses on another way of rewarding quality see Gosfield, "Liability for Quality: A Modest Proposal, " Managed Care & Cancer, (Jan/Feb 2000)


 

last updated: June 21, 2013

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