HCA 448 Case 1
Outline
The Management of Healthcare Organizations
Requirements of Health Services Managers
Evidence-Based Health Services Management (EBHSM)
Decision Selection (The Research Process)
Formulating the Research Question
Acquiring Research Evidence
Assessing the Quality of the Evidence
Presenting the Evidence
Applying the Evidence to Decision Making
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What makes the management of healthcare organizations so complex?
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The Management of Healthcare Organizations
The Presence of Complex Goals and Objectives:
The goals of HCO's – patient care, research, teaching, and community service – are more complex than the goals of general manufactures.
As a result the translating of such goals into measurable objectives are difficult.
The objectives of most healthcare organizations cannot be reduced to greater profits or market share.
Dealing with people not products/services.
Healthcare is labor-intensive, the work is often complex, and it involves many professionals working together.
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The Management of Healthcare Organizations
The Presence of Numerous Stakeholders:
The health services manager must gain consent from a variety of stakeholders.
These stakeholders include board members, patients, doctors, ancillary staff, third party payers, and the broader community.
In many cases, there will be some stakeholders who do not agree with the organizational goals and objectives of hospital administration.
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The Management of Healthcare Organizations
Price Competitive Health Care Market:
In the present health care environment, there are greater limitations as to what HCO's can charge for their services
Price Takers –instead of Price Setters
At the same time, health care costs are increasing consistently.
As a result, managers are challenge by situations (i.e. having inadequate resources) to provide high quality care.
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The Management of Healthcare Organizations
Constantly Changing Health Care Environment:
The role of the health services manager has changed substantially over time.
Medicare and Medicaid, which was introduced in 1965, has help foster the growing complexity and increasing cost of healthcare.
Please provide an example of a federal regulation, which has changed the practice and increased the cost of healthcare.
Healthcare management is no longer primarily hospital acute care management.
Today, many hospitals provide a range of services exceeding far beyond acute care.
New organizations have appeared such as HMOs/ PPOs, skilled nursing facilities (SNFs), ambulatory surgery centers, neighborhood health centers, urgent care clinics, free standing emergency departments, etc.
This change is somewhat independent of recent health policy changes
Health Policy Changes: PPACA/Obama Care, Trump Care, Tax Cuts and Jobs Act of 2017
Small changes here can have dramatic effects on how health care organizations conduct themselves**.
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The Management of Healthcare Organizations
Health Policy Events
Health Law Repeal Could Cost 18 Million Their Insurance, Study Finds
https://www.nytimes.com/2017/01/17/us/politics/congressional-budget-office-affordable-care-act.html?_r=0
WASHINGTON — Eighteen million people could lose their insurance within a year and individual insurance premiums would shoot upward if Congress repealed major provisions of the Affordable Care Act while leaving other parts in place, the nonpartisan Congressional Budget Office said on Tuesday.
Please see the assigned readings folder for full text of article(s).
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Hospital execs assure investors that they can weather ACA repeal
http://www.modernhealthcare.com/article/20170114/MAGAZINE/301149972
Hospital executives who paraded before investors last week at the J.P. Morgan Healthcare Conference in San Francisco put on a brave face about the coming repeal of the Affordable Care Act. To be sure, they were worried about the millions of Americans newly insured under the exchanges and state Medicaid expansions whose coverage is threatened. Kaiser Permanente CEO Bernard Tyson said it would be unconscionable for Congress to repeal the ACA without a simultaneous replacement…..That was the compassionate side. At the same time, systems were talking to investors and analysts, and they chose not to spook them with dire predictions about the impacts of repeal.
Please see the assigned readings folder for full text of article(s).
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The Management of Healthcare Organizations
Health Policy Events
Estimating the Impact of Repealing the Affordable Care Act on Hospitals
Findings, Assumptions and Methodology
Submitted to: The Federation of American Hospitals (FAH) The American Hospital Association (AHA)
http://www.aha.org/content/16/impact-repeal-aca-report.pdf
In modeling the repeal of the ACA as laid out in H.R. 3762, we found that between 2018 and 2026,
The loss of coverage would have a net impact on hospitals of $165.8 billion with the restoration of Medicaid DSH reductions.
The ACA Medicare reductions are maintained and hospitals will suffer additional losses of $289.5 billion from reductions in their inflation updates.
Full restoration of Medicare and Medicaid Disproportionate Share Hospital (DSH) payment reductions embedded in ACA would amount to $102.9 billion.
Please see the assigned readings folder for full text of article(s).
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The Management of Healthcare Organizations
Health Policy Events
CMS to punish more than 2.5k hospitals for 30-day readmissions: 7 things to know
http://www.beckershospitalreview.com/quality/cms-to-punish-more-than-2-5k-hospitals-for-30-day-readmissions-7-things-to-know.html?tmpl=component&print=1&layout=default&page=
Despite the political tumult over a potential ACA repeal, CMS is set to enforce the health law's readmission rule by penalizing 2,573 hospitals for having too many Medicare patients readmitted within 30 days, according to federal data released Wednesday cited in a Kaiser Health News report.
Beginning in October, CMS will cut payments to the penalized hospitals by as much as 3 percent for a year for having high rates of 30-day readmissions for heart attack, heart failure and pneumonia.
"We've spent the last six months fighting about how we're going to pay for health insurance, which is one part of the ACA," Ashish Jha, MD, a professor at the Harvard T.H. Chan School of Public Health in Boston, told KHN. "There's been almost no discussion of the underlying healthcare delivery system changes that the ACA ushered in, and that is more important in the long run to be discussing because that's what's going to determine the underlying costs and outcomes of the health system."
Please see the assigned readings folder for full text of article(s).
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The Management of Healthcare Organizations
Health Policy Events
CMS Proposes to Cancel Mandatory Bundled Payment Models
August 15, 2017
https://homehealthcarenews.com/2017/08/cms-proposes-to-cancel-mandatory-bundled-payment-models/
The Centers for Medicare & Medicaid Services (CMS) has proposed to cancel mandatory bundled payment models and make changes to an existing bundled payment initiative focused on joint replacements
Specifically, CMS is moving to scrap the Episode Payment Models and Cardiac Rehabilitation incentive payment model, which were scheduled to begin on Jan. 1, 2018.
The proposed rule, issued Tuesday afternoon, would rescind the regulations related to these models, and also reduce the number of mandatory geographic areas participating in the Innovation Center’s Comprehensive Care for Joint Replacement (CJR) initiative from 67 areas to 33.
Please see the assigned readings folder for full text of article(s).
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The Management of Healthcare Organizations
Health Policy Events
Moody’s Severe flu season will pressure nonprofit hospital margins
Written by Alia Paavola | January 30, 2018 |
https://www.beckershospitalreview.com/finance/moody-s-severe-flu-season-will-pressure-nonprofit-hospital-margins.html
Despite an increase in patient admissions, the severe flu outbreak this season will pressure nonprofit hospital margins, according to a recent report by Moody's Investors Service.
A surge in patient volume is often credit-positive for hospitals since reimbursements are often tied to the number of patients served. However, the surge in flu-related patient volume will pressure hospital margins because reimbursements for flu-related services often fail to cover the cost of treatment.
"Minimizing the length of stay for flu patients is essential to maintaining margins, but the severity of this year's flu will complicate those efforts," the Moody's report reads.
Please see the assigned readings folder for full text of article(s).
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The Management of Healthcare Organizations
Health Policy Events
Without the Insurance Mandate, Health Care’s Future May Be in Doubt
https://www.nytimes.com/2017/12/18/us/politics/tax-cut-obamacare-individual-mandate-repeal.html
By ROBERT PEARDEC. 18, 2017
WASHINGTON — For years, the Obama administration said the health care system as constructed by the Affordable Care Act could not survive without a mandate that most Americans have health insurance. With surgical precision, the sweeping tax bill that Republicans plan to pass this week will do away with that mandate.
What comes next for health care is unclear.
The demise of the Affordable Care Act’s mandate will lead to higher premiums and lower enrollment in plans sold on the health law’s marketplace, Wendy K. Mariner, a professor of health law at Boston University, said Monday. But she added, “I don’t think we can say with any confidence” how much premiums will rise or coverage will decline.
Please see the assigned readings folder for full text of article(s).
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Requirements of Health Services Managers
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Requirements of Health Services Managers
Balance the Needs of Key Internal and External Stakeholders:
Health care managers must perform a delicate balancing act:
Key internal stakeholders may not want, nor may see the need for strategic interventions.
However, at the same time, managers may be facing important external stakeholders (e.g. Federal government, State & Local governments, Joint Commissions) demanding change.
Healthcare managers must help their organizations be responsive to demands of external stakeholders while mobilizing the support of (or by placating) internal stakeholders.
E.g. EMR Adoption, Medicare Reimbursement and MD resistance.
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Requirements of Health Services Managers
Internal And External Stakeholders (continued):
Managerial interventions should always be financially and politically feasible.
Financial Feasibility: The manager should have a clear idea of where the funds will come from before he/she suggests a capital project or major initiative.
Political Feasibility: When proposing a new initiative, managers should also be aware of both the level of acceptance (buy in) and resistance.
They should also have a good idea of where the support and resistance will come from.
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Requirements of Health Services Managers
Usable Knowledge of Quantitative Measures:
The healthcare enterprise is becoming increasingly concerned with measuring results.
However, because of its complexity, healthcare is very difficult to measure.
Managers must have patience and show creativity in applying quantitative measures, which often has more relevance to process rather than the outcomes of care.
Please see the assigned reading titled Process versus outcome indicators in the assessment of quality of health care.
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Usable Knowledge of Finance:
An important aspect of the health manager’s job is finance.
Managers must understand and generate timely funds from various payers and contributors.
We will talk more about later
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Requirements of Health Services Managers
Ability to Deal with Clinical Staff:
Complicating the manager's job is the fact that doctors and nurses may see managers primarily as support staff.
This image may contrast with the manager’s role as the person who sets measurable objectives; and the person who makes certain that the organization can adapt to the ever changing health care environment.
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Managerial work is accomplished in part through e-mails and meetings that some clinicians may regard largely as a waste of time.
Clinicians usually feel that they can be more useful when involved in providing patient care.
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Requirements of Health Services Managers
Attain a High Level of Managerial Performance:
The healthcare manager’s work is being transformed by an information revolution and a revolution in performance expectations.
Healthcare managers are expected to support quality improvements, lead revenue generation, contain costs, and manage relationships with important stakeholder groups.
E.g. Economic Value Added (EVA) Analysis
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Evidence-Based Health Services Management (EBHSM)
Please see assigned reading titled:
Is there a thing such as Evidence Based Management
Evidence-Based Health Services Management (EBHSM)
All managers should make decisions based on evidence. In order to obtain the evidence to make more effective decisions? Managers should be able to do the following:
Identify emerging opportunities/ threats.
Precisely define management challenges or opportunities.
Collect data.
Find and critically appraise relevant information from published and non-published sources.
Be able to conduct and evaluate experiments (e.g. pilot testing) in which new methods are plotted.
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Evidence-Based Health Services Management (EBHSM)
Evidence-Based Health Services Management (EBHSM) is the systematic application of the best available evidence to the evaluation of managerial strategies to improve the performance of health services organizations.
This evidence is derived from well conducted management research.
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EBHSM does not replace but rather complements other types of knowledge and information.
Other sources of information and knowledge such as personal experience, experiences of others in similar situations, expert opinion, and simple inspection of data trends and patterns can and should also be used in decision making.
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The EBHSM approach is a process which involves several steps.
See graph
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The Six Step Decision-Making Process (adapted)
1.
Identification of a problem/issue
2. Identification of possible decisions
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Allocation of weights to possible decisions
4.
Selection of a decision
5.
Implementation
of the decision
6. Evaluation of decision effectiveness
Evidence-Based Management
Evidence-Based Health Services Management (EBHSM)
External Environment
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Evidence-Based Health Services Management (EBHSM)
What types of management questions can the EBHSM be applied to :
Evidence-based health services management can be applied to three types of management issues:
Core business transaction management.
Operational management.
Strategic management.
Case projects will deal with one of more of these management issues.
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Examples of Management Questions to which EBHSM can be applied
| Type of Management Issue | Issue/Management Questions |
| Core Business Transactions* | How can the payer process MD claims for payment more quickly? How can the health system’s information on patient eligibility for benefits be made more accurate? What methods for paying physician claims achieve speed, convenience, and accuracy requirements |
| Operational Management | How can nurse absenteeism be reduced? Will decreasing the patient/nurse ratio improve patient outcomes? Does hospital discharge planning and follow up improve patients’ outcomes? Does hand washing among healthcare workers reduce hospital-acquired infections? Does raising part of employees’ compensation on achievement of unit or team goals improve teamwork and coordination? |
| Strategic Management | How do hospital mergers affect administrative costs? Do hospital-physician joint ventures (i.e. specialty hospitals), such as orthopedic surgery centers, have negative effects on in-hospital surgery? Does the implementation of an electronic medical record improve the quality of patient care? Do pay-for-performance incentives substantially improve targeted care processes? |
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Decision Selection
The Research Process
Decision Selection
The Research Process
Applying evidence to the assessment of possible decisions and alternatives, and the selection of a best decision can be accomplished by:
Formulating the research question.
Acquiring the relevant research findings and other types of evidence.
Assessing the validity, quality, and applicability of the evidence.
Presenting the evidence in a way that will make it likely that it will be used in the decision making process.
Applying the evidence in decision-making.
This is a weakness among many heath managers.
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Decision Selection:
Formulating the Research Question
Decision Selection
Formulating the Research Question:
The first step in the decision selection process is to turn the management question/issue into a research question.
This can be done by framing the issue in a way that will increase the probability of locating useful research studies.
This task usually requires more thought than one may first believe.
In order to find relevant research, a very specific management question will have to be broadened.
However overly broad, vague, or highly abstract research questions must be avoided.
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Decision Selection
Formulating the Research Question (continued):
For example, less assume that a manager is interested in knowing the following:
The likely effect of implementing a hospitalist program on the cost and quality of care for patients treated for cardiac problems in a suburban Arizona hospital.
This type of question is too specific. It will be hard to find information on such a topic.
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The impact of hospitalist on the healthcare delivery system?
A question of this nature is too broad. A search on this topic will pull too much information.
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The impact of a hospitalist program on the cost and quality of inpatient care in US community hospitals?
This is an example of a good research question.
You will be asked to replicate at a later date.
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Decision Selection:
Acquiring Research Evidence
Decision Selection
Acquiring Research Evidence:
Many managers will find it helpful to use technology to help locate research articles.
Health organizations that have made a significant investment in knowledge management.
Many large health systems have libraries, trained librarians/webmasters, Internet information resources.
The vast majority managers do not have such resources, thus they are limited to what they can find on the open Internet.
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In addition to traditional Internet based searches, evidence related to the management research question can come from a wide array of sources:
Frequent and (somewhat) reliable sources of evidence can come from colleagues, consultants, and known experts in the field.
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Decision Selection:
Assessing the Quality of the Evidence
Decision Selection
Assessing the Quality of the Evidence:
Most managers do not have the minimal competency needed to assess management research.
“Garbage in Garbage out”
Research assessment skills enable managers to judge the quality of the evidence available.
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Decision Selection
Assessing the Quality of the Evidence (continued):
Ideally, managers should have (or have available to them) the competency to assess the following:
The strength/weakness of the research design.
The study context and setting.
Sample sizes of the study groups.
The controls used to deal with confounding factors.
The reliability and validity of measurements.
The methods and procedures used.
The justification of the conclusions.
Study sponsorship.
The consistency of the findings with other studies.
The class will have numerous opportunities to apply these points.
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Decision Selection:
Presenting the Evidence
Decision Selection
Presenting the Evidence:
Managers and researchers should present evidence to the decision-making process in a way that is:
Timely.
Brief.
Avoids technical jargon.
Provides clear description of the questions addressed.
Incorporates the context of the research findings.
Offers an assessment of the strength of the evidence.
Gives the results and implications for practice.
Makes the presentation easy to assess.
This information provides the basis for judging your presentations and written briefs.
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Decision Selection:
Applying the Evidence to Decision Making
Decision Selection
Applying the Evidence to Decision Making:
Challenges
Getting health service organization decision-makers use of the research generated evidence can be a challenge.
Lack of appropriate incentives/capabilities: Most organizations today do not have incentives or capabilities necessary for routinely using evidence in their decision-making.
Time involved to adequately analyze/develop: Substantial staff time is often required to ensure an adequate deliberative process.
Opportunity Costs to Status Quo: There are opportunity costs to managers and others who feel that their previous practices are challenge by the evidence.
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Decision Selection
Applying the Evidence to Decision Making
Challenges continued:
Different Horizons between theory and practice: Many users demand that the available evidence have immediate, use for a particular the vision, but often the available research evidence cannot be used in that way.
The evidence is mainly for a long term impact, not short term
Please see the assigned reading titled The Hidden Traps in Decision Making.
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Decision Selection
Applying the Evidence to Decision Making
Conclusion:
Research evidence derived from EDHSM can be used to:
Open up communication among managers and other stakeholders.
Enable the manager(s) to generate creative solutions.
Enhance the manager’s ability to estimate (test) the likely effects of each alternative solution to a problem.
Increase the decision-makers knowledge of a problem, which can help provide a more informed decision.
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Health Care Analysis & Evaluation Lecture Packet # 1
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