Unfortunate Acronyms, Money Talks and Al Stewart

I spent the last two days in Washington DC attending the American Health Lawyers Association’s two-day program reviewing the various provisions of the Affordable Health Care Act of 2010.

Of course, it’s really two acts, The Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act. I am choosing to refer to both Acts as the Affordable Health Care Act of 2010 to avoid the unfortunate acronym PPACA (pee-pack-a). Every presenter insisted on using PeePacka in defiant resistance to the Administration’s “propaganda” to position the Act as actually good for the people.

Anyway, what really is striking as you sit through a detailed review of the provisions of the Affordable Care Act of 2010 is the strategic focus on improving quality. Now I know that you are probably saying something to the effect of “come on Mark, that’s been an industry focus for years now.”

That’s true.

And, that focus has not led to improved health status, outcomes or lower costs. There was a missing ingredient.

Money.

The Affordable Health Care Act adds the essential ingredient.

For the first time, the Medicare and Medicaid programs are going to link payment to quality in some meaningful ways. Fee-for-service payment will become a dinosaur sometime in the next 5-10 years. Payment will be bundled for certain (someday most) conditions. Payment will be tied to outcomes (both relative and in terms of achieving year over year improvement) Value (quality and cost) will be readily available (transparency) and closely monitored by patients, payers and employers.

The combination of the two, money and the bright sunshine of transparency, will in my view bring about dramatic improvements in quality. And that improvement in quality will cut costs. There will be fewer post-surgical infections, hospital-acquired infections, never-events, and on and on.  Just reducing the number of days patients spend in hospitals will lower costs.

So, what should you do?

Well in my opinion, it’s absolutely imperative that every hospital Board and Senior Management team unite their organization around a strategy that has quality of patient-centered care as the lynchpin. That strategy must be supported with investments in clinical leaders, redesigned processes and metrics and supported by critical information technology. And, Boards and Senior Management must develop skill in managing risk – for outcomes and cost variances.

Everything else becomes a trailing indicator. Market share, Press-Gainey scores, and, yes, financial performance will only improve after the organization is focused on what matters most – providing the highest measurable quality of care in an efficient and cost-effective manner.

That’s the goal of the Affordable Health Care Act. I believe it can be accomplished. Organizations who choose to embrace change, make quality the cornerstone of their strategy and relentlessly focus on excellence will be the winners in the market place.

Those that don’t will fade away with the fee-for-service payment system.

Afterwards – Fear and Loathing in Baltimore:

While in Washington, my friend Tad Myre treated one of his associates, Charles Keckler, and me to quite an adventure. It involved two harrowing taxi rides, a meandering, and sometimes incomprehensible conversation between he and his brother David who at one point burst into the chorus of “Time Passages” by Al Stewart, innings three through nine of the Orioles-Mariners game (Griffey remained awake as best we could tell, although we were late so who knows) and appetizers and a beverage at Baltimore’s Inner Harbor.  (I wondered last night if the City of Baltimore had the right to look at Cordish’s books.) Anyway, I am sitting in the Baltimore Washington Airport as I compose this post and still smiling. I had never been to Camden Yards or the Inner Harbor, so it definitely broadened my horizons…all the while learning a thing or two about the new reform law. Doesn’t get any better than that.

Time passages…