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The new math

May 2011

Published in the May 2011 issue of Today’s Hospitalist

I’M HEARING A WHOLE LOT OF BUZZ about “value” in health care. To be completely frank, my first reaction was negative. As the father of three young children, the word “value” conjures up various associations with McDonald’s and Walmart. Although these are fine companies, I wasn’t ready to have heart failure management or hip fractures compared to Happy Meals and boxes of Cheerios.

First impressions, of course, are often wrong. After a little reading, I became a believer.

My first stop was a piece by Michael Porter, PhD, published in the December 23, 2010, issue of the New England Journal of Medicine. The title asks this simple question: “What is Value in Health Care?”

I’ve always loved the power of elegant equations to explain things; think, for example, of E=mc2. While it probably won’t win a Nobel Prize, Dr. Porter presents this value equation:

Value=Outcomes divided by costs

And that’s where things started to click for me.

Say I want a good breakfast (outcome). General Mills, which is based in my fair city, makes Cheerios, a cereal of predictable quality. Since Cheerios are Cheerios, retailers compete on cost: same size box, lower price; buy one, get one free; etc. Minimize the denominator (costs) and the value to me, the consumer, increases.

But isn’t health care “or, in our case, hospital medicine ” a little different than Cheerios? Think twice before answering.

The denominator
For years, hospitalists have made hay with length of stay. By reducing length of stay, we have apparently increased value. But value for whom?

Although patients probably get some benefit from shorter hospitalizations, hospitals are the main beneficiaries. If the hospital gets paid X amount of dollars for a GI bleed regardless of resource utilization, the hospital stands to make more money if it reduces the time it takes to earn that set fee. Hence, all the people in your life obsessing over care progression.

Dr. Porter turns this whole way of thinking on its ear by writing, “value should always be defined around the customer “¦ the creation of value for patients.” Moreover, “value depends on results, not inputs,” which should stop us all dead in our tracks. When you think about our average day, we spend a lot of time messing with inputs “medications, tests, procedures “and tend to lose track of outcomes.

This brings us to the numerator.

The numerator
Way back in 1997, before some of you were in high school, David Slawson, MD, and Allen Shaughnessy, PharmD, developed the idea of Patient-Oriented Evidence that Matters (POEMs). As suggested by the moniker, POEMs focus on outcomes that are important to patients. American Family Physician, which is put out by the American Academy of Family Physicians, subsequently incorporated POEMs into its “strength of recommendation” taxonomy, which is now a feature of every article the magazine publishes.

What do patients care about? As I often remind my students, it’s the three Ds: death, disability and discomfort. Patients are far less concerned about the disease-oriented outcomes “vital signs, laboratory results, imaging findings ” that we doctors ponder and fret about ad nauseum.

That brings me back to the value equation. We can expand the numerator to include clinical outcomes, provided they are patient-oriented, as well as patients’ satisfaction with the care they receive:

This is where hospitalists need to do some serious reflection. To maximize value for patients, we need to maintain a laser-like focus on the three Ds, make health care a pleasant experience and, where possible, control costs.

Remember any classes in medical school on that?

Different spin on quality
You might be a little uncomfortable by now. If not, I have more good news “good, that is, if you’re a patient.

Hospital medicine has always been about quality. We all sit on committees at our respective hospitals and participate in quality improvement activities. Aspirin on arrival? Check. Antibiotics within the required time frame for pneumonia? Done. DVT prophylaxis? Hardwired.

But are those really outcomes? That’s where the balloon pops.

According to Dr. Porter, “process measurement and improvement are important tactics but are no substitutes for measuring outcomes.” He further notes that virtually all of the Healthcare Effectiveness Data and Information Set (HEDIS) measures are process measures, and that none deal with actual health outcomes.

Bottom-line: It’s harder than you think to measure, let alone achieve, value.

I’ve seen the future
Hospitalists tend to deal with small chunks of time: three hospital days for this condition, and five for that. Dr. Porter notes, however, that “value for the patients is created by providers’ combined efforts over the full cycle of care.” A hip fracture, for example, has a cycle of care that is months long. Value from the patients’ perspective is measured when they achieve their maximum medical recovery, not when the surgeon closes the incision or the hospitalist green lights their discharge to a skilled nursing facility for rehabilitation.

Hospitalists might reasonably object that we’re only a tiny cog in an enormous health care machine. While this is true to a point, we can be much more deliberate in setting agendas with patients and their families, keeping those three Ds in mind. We can also do a better job educating patients about their entire cycle of care and continue to be diligent with downstream handoffs to primary care physicians and to other facilities.

Value-based health care clearly represents the future, and the Centers for Medicare and Medicaid Services is now planning to roll out what it’s calling value-based purchasing in October 2012, paying hospitals a premium (or penalizing them) for their performance on core measures. Hospitalists would be very wise to learn the new rules “and their possible implications “for both direct patient care and their hospital medicine programs.

David Frenz, MD, is a hospitalist for HealthEast Care System in St. Paul, Minn., and is board certified in both family medicine and addiction medicine. He serves as system medical director for addiction medicine and can be reached at dafrenz@healtheast.org.