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Daniel McLaughlin

Financing, Health Policy, Leadership, Operations Improvement

The Health Care Execution Challenge

This article was originally published in the spring 2012 issue of B. Magazine.

Health care organizations lag behind most successful businesses in executing high-quality business plans

In 2001, the Institute of Medicine published Crossing the Quality Chasm, a seminal work identifying the chasm between what is known about providing high-quality health care and what actually is being delivered. Ten years later, this chasm still exists and was a key factor leading to the publication of Make It Happen: Effective Execution in Healthcare Leadership, a book published by Health Administration Press, a division of the Foundation of the American College of Healthcare Executives.

As director of the Center for Health and Medical Affairs at the Opus College of Business, I long have been engaged in the health care delivery system throughout the Midwest and the nation. The focus of the center is to “support improvements in the leadership and management of health care systems through research, community outreach and the collaborative development of innovative professional and executive education programs.” Conducting research for and writing this book not only furthered the goals of the center but can, as a member of HAP’s editorial board notes, “advance health care leaders from developing a plan and letting it sit on the shelf to full and robust execution.”

The Challenge

The failure to execute is a common problem in many organizations but more so in health care. Barriers include an incredibly complex system, splintered leadership, strategies that vacillate between financial goals and patient care, and no external pressure strong enough to force change.

Effective execution, however, is the key to high performance for most of America’s successful corporations. Executing strategies effectively and quickly is well-known in the general business world, but it appears not to have crossed the chasm into the health care field. One way to bridge this gulf is to provide more effective education and training to health care leaders nationwide in the area of practical and efficient execution.

In 2009, during the Health Care UST MBA Washington, D.C., seminar, I had the opportunity to meet Dr. Carolyn Clancy, director of the Agency for Healthcare Research and Quality. A primary goal of AHRQ is to improve the processes needed to effectively move major clinical research findings from scientific literature to widespread use by the clinician.

AHRQ agreed to provide funding to the Opus College of Business to develop a new, effective execution curriculum for health care leaders and managers. For more than a year, I consulted with OCB faculty members on best business practices outside of health care and also visited some of the leading health care delivery organizations in the Midwest, including HealthPartners, Essential Health – Duluth, Marshfield Clinic in Marshfield, Wis., and Twin Cities Orthopedics to examine their systems for execution.  Continue Reading

Financing, Health Policy

How much will my health insurance cost?

With the Supreme Court ruling the Affordable Care Act constitutional, attention is now shifting to the details of the law – especially how the individual market will function in the insurance exchanges.

I had the opportunity to work on the Clinton health reform plan in 1992–1993. As part of this work, the White House sent us to various groups to present the proposed plan. I usually spoke to provider groups. At the beginning of the presentation, I always asked the audience to “Please raise your hand if you know someone who is uninsured or who has difficulty getting health insurance.” Almost all the hands in the room were raised.

My guess is that this question would yield similar results today. Although it’s likely that many health professionals are already working on implementing sections of the ACA (such as ACOs, medical homes, reducing re-admissions, etc.), they may not have paid a lot of attention to the individual market insurance details. Here are some basics to remind us of the details and some resources to share with any friends who are uninsured.  Continue Reading

Leadership

Catholic Health Care Leadership

32139066_smBuilding on more than 20 years of graduate and professional education for health care leaders, the University of St. Thomas is pleased to announce a new program in Catholic Health Care Leadership. The program is designed to increase the mission alignment within executive teams who are dealing with profoundly complex leadership issues while caring for patients as an expression of the healing ministry of Jesus.

“One of the needs for a program like this is that Catholic health care organizations competing in today’s marketplace need to be distinctive,” stated the program’s lead faculty, Michael Naughton, Ph.D. “What is crucial to the distinctiveness of Catholic health care is to have leaders who have a deep sense of what it means to be leading a Catholic health care system.”

The program’s admissions advisor, Marlin Meendering, M.Div., has spoken with leaders of more than sixty Catholic health care organizations across the U.S.  Reflecting on those conversations, Marlin stated, “Most Catholic health care systems are already heavily invested in ministry formation or mission integration programs. Our program will complement their efforts because our focus is on leadership formation, especially for physicians. How do a physician and his/her team effectively lead within the context of Catholic health care? Because of our experience in leadership formation, we are confident that the program will refine critical leadership skills, deepen understanding, strengthen team effectiveness, and increase personal career satisfaction.”

This leadership program integrates the important requirements for executive development with the unique dimensions of formation in Catholic health care. The program will include four quarterly modules of four days each and has these distinctive features:  Continue Reading

Leadership

Leadership at the Marshfield Clinic

Dr. Laura Nelson, Chief Medical Officer, Marshfield Clinic

Dr. Laura Nelson, Chief Medical Officer, Marshfield Clinic

On December 2, 2011, the University of St. Thomas held its graduation ceremony for its 17th cohort of the Health Care UST MBA. The commencement speaker was Dr. Laura Nelson who is the Chief Medical Officer of the Marshfield Clinic and a 2001 graduate of the Health Care UST MBA program.  

She spoke about the challenges of leadership in today’s chaotic environment and presented a list of key “leadership survival” insights that she has learned thus far. The Marshfield Clinic is one of the best delivery systems in the country and much of their success is due to leaders such as Dr. Nelson.

She shared with the graduating class some of her observations on what it takes to be a successful leader:  Continue Reading

Financing, Health Policy, Leadership, Operations Improvement

Industry Insight: The future of coverage and care delivery

37878562This post is part of the Industry Insight series which is designed to highlight the most significant new reports on health care management or policy–ranging from government reports to health care business studies.

We will highlight and briefly analyze reports that may be useful to the thoughtful and busy health care leader. Our health care programs at the Opus College of Business emphasize leadership, organizational transformation, and operational excellence. The reports we select will reflect these themes and can be helpful in strategy formulation, operations improvement and leadership activities. 

This series will show you at a glance what you need to know about current developments in health care management and policy.

This edition features:

  • The Oregon Health Insurance Experiment. Does having health insurance improve health?
  • Modernizing Rural Health Care: Coverage, Quality and Innovation. What is the state of rural health care in America and where is it going?
  • Large Employers’ 2012 Health Plan Design Changes. What is the future of employment-based insurance?

Continue Reading

Financing, Health Policy, Leadership, Operations Improvement, Uncategorized

Essential benefits and the battles to come

A key part of the Affordable Care Act (ACA) is the creation of state-based Health Insurance Exchanges to offer individuals and small business a standardized health insurance product. These policies will resemble benefit packages of small employers. Each of these health plans in the Exchange must provide an “essential benefit set” of services. But what does that mean?

In 1993 President Clinton’s task force on health care reform decided to define the essential benefit set as part of his health care reform proposal. A significant amount of the opposition to his plan was from provider groups that were excluded.

In 2010 the architects of the Affordable Care Act took this lesson to heart and developed a multi-step process which would define the essential benefit set of services over a number of years. First, the Institute of Medicine was asked to develop a process and guidelines for the initial development of and long-term updates to the benefit set. Their report was recently released and can be found here.

The second step is to define the essential benefit set; this will be done by HHS staff and their recommendations will be available in May, 2012. HHS has had a reasonably good track record of resisting pressure from provider groups to expand the Medicare benefit set significantly, so this initial set should meet the cost goals of the ACA.

A third component of the process allows state exchanges to modify the essential benefit set if the results are actuarially equivalent in cost. Here is where the challenge begins and the states’ history regarding benefits is not encouraging.

Most states currently have “mandated benefits” for fully insured products within the state. Over the years various provider groups have lobbied for the inclusion of their services into the mandated benefits which have made this type of insurance very expensive. Most reasonably sized companies have become “self-insured” to escape these mandates. For example:

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Source: Perspectives on Essential Benefits — Workshop Report — Institute of Medicine

Because of this history, look for intense state legislative battles in the coming years among providers as they lobby to ensure their services are included as essential benefits. The actuarially equivalent definition will undoubtedly be stretched and vigorously debated. Some of the benefits that have been controversial in the past include:

  • Cosmetic surgery
  • Chiropractic care
  • Dental care
  • Care that is supportive but not clinical
  • In vitro fertilization
  • Experimental services, particularly drugs
  • And many more . . . .

Each state will face this challenge as they create their Health Insurance Exchange and they will struggle to keep the cost of health insurance affordable — which is, of course, the name of the law.

See how Minnesota is facing this challenge and others related to the implementation of health care reform at the UST Executive Conference on the Future of Health Care on Friday, October 28 in Minneapolis, MN.

This post was originally published October 19th on MedCity News.

Financing, Health Policy, Leadership, Operations Improvement

Bundled payments – one more demonstration brought to life

32206553As elements of the Accountable Care Act (ACA) are being ramped up, it is useful to understand their origin. CMS has a long history of supporting many types of payment reform demonstrations and the new bundled payment system is a good example. 

Bundled payments are a new payment methodology in the ACA and this system is based on the Acute Care Episode (ACE) demonstration project. The ACE program pays a flat bundled rate for 9 orthopedic and 28 cardiac procedures. This fee includes hospital care, physicians and outpatient follow up and rehab. There are 22 quality measures reported each quarter to CMS.  Physician payments can be increased by 25 percent if certain cost reduction targets and quality goals are met. The Baptist Health System in Texas participated in the ACE project and immediately began to receive gain sharing payment from Medicare that ranged from $65 to $6,000 per admission. 

Other CMS demonstrations have shown that bundling payments improves care for patients, and leads to better health, better care and lower costs. 

Continue Reading

Financing, Health Policy, Leadership, Operations Improvement

Industry Insight: Understanding health care cost trends

37878562This post is part of a new series designed to highlight the most significant new reports on health care management or policy–ranging from government reports to health care business studies.

We will highlight reports that may be useful to the thoughtful and busy health care leader. Our health care programs at the Opus College of Business emphasize leadership, organizational transformation, and operational excellence. The reports we select will reflect these themes and can be helpful in strategy formulation, operations improvement and leadership activities. 

This series will show you at a glance what you need to know about current developments in health care management and policy.

 

Modest Acceleration in U.S. Health Care Costs According to the S&P Healthcare Economic Indices
August 18, 2011

One of the key drivers of the federal budget deficit is Medicare. Most actuarial assumptions that Congress uses to predict future costs show Medicare costs rising much faster than inflation.  However, this S&P report shows that Medicare cost inflation has had a remarkable decrease. If this cost inflation remains low, it seems reasonable that the federal government can resist significant reductions to provider payments or increased contributions from beneficiaries.

Continue Reading

Health Policy, Leadership

Uncertainty Surrounds the Health Insurance Exchanges

healthinsuranceThe most dramatic and significant aspect of the Affordable Care Act is now underway.

On July 11, 2011, the Department of Health and Human Services released its first set of proposed regulations governing the American Health Benefit Exchanges created by section 1311 of the Affordable Care Act. HHS also released proposed regulations governing the reinsurance, risk corridor, and risk adjustment provisions of the statute and posted a set of fact sheets answering questions about the new rule.

Although the exchanges are only expected to enroll approximately 30 million individuals, this new feature of the American health care system will likely have a much broader impact on the industry and comes with several unresolved issues:

Continue Reading

Health Policy, Leadership

Generating good ideas

Health care is reinventing itself as the playing field begins to stabilize. Although there still seems to be occasional political statements about “repeal and replace,” the practical fact is that much of the Affordable Care Act is now being implemented. Even if some aspects of the insurance expansions are changed (e.g. mandate to purchase health insurance), the system reform components appear to be “baked in.”

This new system stability has energized creative health care organizations into stretching their strategic plans and trying to inject a spirit of creativity and innovation into their organizations.  For example, a number of progressive health care organizations have set up “Design and Innovation” departments. The Mayo Clinic has one of the leading examples in its Center for Innovation.   

But what really is innovation? Does it come as flash during the drive to work or is it the result of a complex set of interactions of talented individuals?

Professor Tom Ressler, one of my colleagues at St. Thomas, is a student of the innovation process and teaches his students how to use Mind Maps to connect unlikely ideas into innovative concepts. Tom has directed us to a wonderful overview of this process, provided by Steve Johnson. Steve is the author of Where Good Ideas Come From: The Natural History of Innovation and gave a summary of his work at a TED conference. This 17-minute video is well worth your time.

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Most health care organizations are increasing their emphasis on teamwork – particularly in primary care. These teams can also be fertile soil for new ideas and innovations that can significantly improve the delivery of care. Where do you see innovation in health care?