FIVE QUESTIONS WITH GLENN STEELE, M.D., Ph.D. – PART ONE: COVID Exhaustion and Pressures on Patient Care Delivery and Healthcare Finances
We had the opportunity to sit down recently with Dr. Glenn Steele, President of GSteele Health Solutions, Chairman of the City of Hope, and former President and CEO of Geisinger Health System, to talk about current challenges in the healthcare industry. For our full podcasts, please visit https://shows.acast.com/actionable-insights.
DH – Thanks, Dr. Steele, for talking with us today about the current challenges in healthcare.
GS – There’s always a huge amount of challenge in delivering healthcare and figuring out how to pay for care. That’s gone on for decades. It’s exacerbated now for a couple of reasons. The most temporary reason, at least I hope it’s temporary, is the COVID crisis and what I call the exhaust from the COVID crisis. That exhaust is based on the human resource. People are truly exhausted and there’s a huge amount of stress on turnover at all levels. The pipeline is changed and people’s expectations in terms of their work. Satisfaction and requirements have changed, and all that has been under great pressure because of COVID and the huge influx of very sick patients during the waves of hospitalized COVID patients.
The other issue is the financial issue, and that, again, has been exacerbated by COVID. As health providers, the cases we were taking care of were largely not the cases that produced the greatest margins, particularly for hospital-centric integrated delivery networks. Huge amounts of cases were pushed out, whether it was elective orthopedic procedures or cardiovascular or even oncology diagnostic and therapeutic procedures did two things. Number one, they certainly affected the patients because the patients couldn’t get care. For good reason, they were essentially put behind the COVID patients in line. And the second thing, it pushed a huge amount of financial stress into the provider system. For a while during the Feds’ response, which was, I think, appropriate, there were ways of financially mitigating some of the stress, particularly for the big networks in the hospital setting. That’s gone now and yet we still have the consequences of the exhaustion of COVID both in terms of patient care delivery and in terms of finance.
DH – I imagine no CFO would be happy with a hospital full of COVID or influenza patients and empty operating rooms.
GS – Well, that’s exactly right. But there’s an even more fundamental issue that’s going on that’s not necessarily COVID-related, but it’s been COVID exacerbated. And that is my belief – but I think there’s some evidence to support my bias – that with the intended change from fee-for-service as a primary means of reimbursement to something else, whether it’s population-based capitation, shared risk, pay for performance, what have you, that all the hospital-centric organizations are under pressure. And I would think that unless there is a huge change in the sociology of many hospital-centric integrated delivery systems have no sustainable business, period.
DH – Is it correct to say that the hospital-centric business model is no longer sustainable?
GS – I think that depends on the individual markets and the ability to concentrate the volume into larger, ever larger, integrated delivery networks. It depends on how stringent the cost issues are managed, basically, and it depends on the leverage in terms of how many payers you have and how capable you are leveraging with your provider concentration versus the payers’ concentration or lack of concentration.
Even before ACA and certainly built into ACA was for the public payer, whether it’s Medicare or Medicaid, to squeeze down on the reimbursement per unit of work – which is the fundamental core of fee for service, and to begin to transition to non-fee for service reimbursement. So, the ability to make money taking care of Medicare patients was tougher and tougher, and Medicaid was even more stringent for every dollar of expense. The way most organizations handled that was to consolidate and be able to make up for those losses with the commercial payers, but the commercial payers are now more and more squeezing down on reimbursement per unit of work and then moving to shared risk in various ways. You must have fundamental blocking and tackling approaches that increase your revenue and help you define the amount of revenue per individual provider as compared to the amount that the provider should be able to capture in a given market. And then the second part of the equation is that you must have extraordinary sensitivity to the cost of providing a given service and be able to feed that sensitivity back to the leaders of individual service lines to minimize the costs – obviously without hurting the quality of the output.
DH – I’d imagine that’s even more magnified today with the inflationary figures we are seeing for the costs of supplies and labor.
GS – The way you can compartmentalize this intellectually and ideally administratively is to list the costs you can control and then the costs you can’t control. And that gives you a pretty good idea of what to focus on, right? You know you’re not going to be able to change inflation, but there are things you can control. We got a lot of publicity and renown while I was at Geisinger for changing how care was given. But underneath that was a huge amount of blocking and tackling we did to be pertinent to both the 50 percent of our care that was fee for service and the 50 percent that was essentially capitated.
DH – So what you’re referring to here is your priority to consistently provide value and improve quality, and that was through what you started as the Proven Care program, correct?
GS – Yes. It’s tough because you are trying to change people’s behavior and that is not easy. We went into changing how care was delivered assuming that probably 30 percent of what we did was variation in care that could not be justified on the basis of a doctor proving that there was a better outcome. If you think about any kind of production, whether it’s a product or a service, when you have variation, you generally have worse outcomes overall for a group of patients with a given diagnosis and a given therapeutic course than if you have less variation. You can’t have zero variation, obviously, because there is a justified individual variation for a given patient with a given set of problems. But in general, we thought that probably 90 percent of the variation we had in our caregiving was unjustified and was leading to worse outcomes.
So we basically said what would happen if we tried to have consensus occur amongst our own providers to get us as close to what we thought would be a perfect set of performance criteria, metrics that would start at the time of diagnosis and then could be monitored until the care was given and rehabilitation was done, or in the case of diabetes or chronic disease we would follow and see if we got close to perfection as defined by our own providers. The outcome was defined in two ways. The first and most important way was what would be the decrease in complication rate for our patients given our best practice approach. And the second was the economic consequences. Were we lowering our costs for giving better care? And that’s what we found. For example, we were lowering the cost for our diabetic patients by 25 to 30 percent because there were fewer vascular complications – heart attacks and strokes – and there was less retinopathy over a period of two to three years.
Watch for more of our FIVE QUESTIONS with our Actionable Insights podcast guests. For more information on Doctivity and to listen to our library of podcasts, please visit https://shows.acast.com/actionable-insights.
