The evolution of our healthcare system from a volume-based to a value-based model is driving provider organisations to adopt patient-centric, outcomes-based success metrics for operational processes in both acute and non-acute settings. Within this new paradigm, physician leadership is an essential component of traditionally ‘non-clinical’ healthcare entities, like supply chain. How to define, develop, and integrate these physician leaders into this model is a new challenge that all organisations must now face.
When the Institute of Medicine published ‘To Err is Human: Building a Safer Health System’ in 1999, the report received a broad range of responses. This was the first time most Americans had even heard of medical errors, let alone that preventable errors were the cause of almost 100,000 deaths and cost US$17-29 billion in unnecessary healthcare expenses.
The federal government acted swiftly, by holding Congressional hearings, creating task forces, and appropriating US$50 million to the Agency for Healthcare Research and Quality (AHRQ) to study ways to reduce errors. The goal was to reduce errors by 50 per cent within five years by implementing improvement programmes and establish a culture of safety in the US healthcare systems.
Physicians, on the other hand, initially retorted with skepticism, arguing essentially that the data is faulty and dependent on how the terms ‘error’ and ‘preventable’ are defined.
Despite the initial denial, the fact that preventable medical errors is still the third highest cause of deaths in the United States (behind heart disease and cancer) is indisputable and serves as the cornerstone for a monumental reform in the way we deliver and pay for healthcare.
Sixteen years later, however, there has been no significant improvement in healthcare quality despite all the work that has been put in by thousands of very dedicated people in the industry. So-called ‘never events,’ healthcare-associated infections, socioeconomic disparity in access to care, and wide variations in practice still occur daily at alarming levels.
A study published in 2013 estimated that over 4000 surgical never events still occur annually.
Furthermore, the cost of healthcare is still climbing uncontrollably with no correlation to improvement in the quality of care. According to the Centers for Medicare and Medicaid Services, healthcare spending accounted for 17.5 per cent of Gross Domestic Product in 2014 and is expected to increase each year. This is the highest rate amongst all developed nations (Netherlands is second at 12.9 per cent).
New Medicare payment models, including Value-based Purchasing, are placing greater emphasis on patient safety and outcomes. Hospitals and providers are assuming a larger share of risk for the populations they serve. Hence, the need to integrate physician leaders into financial and operational strategies is greater than ever before.
The role of physicians in controlling the cost of care is not well defined in most healthcare organisations, but can be described through these functions:
• Improving quality of care
• Reducing unnecessary variation
• Creating a culture of high reliability.
Improving the quality of care has greater meaning than just becoming a better doctor or safer hospital. To quote former CMS Administrator Donald Berwick, MD, "Most of what you do in your life is better today and less expensive because we have figured out a better way to do it. The same applies in healthcare.”
This suggests that focusing primarily on quality improvement will result in considerable reduction of cost; however, the opposite is not necessarily true.
For physicians, quality improvement is achieved through a variety of strategies. These may include a more robust process for credentialing and privileging physicians, a structured effort to analyse physician-specific performance and cost data, implementing standardised evidence-based care pathways and participating in quality registries like the National Surgical Quality Improvement Program (NSQIP).