The UCLA SES has embraced the concept of delivering value in health care since its inception. Our efforts, launched prior to any knowledge of Porter's work, were and are driven by what we consider ethical principles: Optimizing long-term patient outcomes, zero-tolerance for waste, and making world-class care affordable for all patients regardless of insurance status. We subsequently found our practices to be well aligned with the six points of Porter's strategic agenda, which will form the framework of our discussion:[11
- Organize care into integrated practice units around patient medical conditions
- Measure outcomes and cost for every patient
- Move to bundled prices for care cycles
- Integrate care delivery across separate facilities
- Expand areas of excellence
- Create an enabling information technology platform
Organize care into integrated practice units around patient medical conditions
Currently, the health care system is organized into discrete services, reflecting traditional medical specialties or departments (radiology, anesthesiology, dermatology, etc.), which bear little relation to patient needs. The resulting care is fragmented, inefficient, and inconvenient for patients. The future of health care lies in moving to integrated practice units (IPUs), defined as multidisciplinary teams organized around a specific medical condition or group of conditions with common features. Ideally, IPUs are co-located in dedicated facilities under a unified administrative structure, where functional teams meet regularly. IPUs provide the full cycle of care for the condition(s) treated (everything required to restore the patient to health) and accept joint accountability for outcomes and costs. As a new endeavor, the UCLA SES benefitted from the absence of a structural legacy, permitting its creation as a multidisciplinary program from day one, incorporating team members from the following departments: Surgery, endocrinology, radiology, nuclear medicine, oncology, genetics, and pathology. Each team member devotes a substantial portion of his/her professional time to treating a focused set of conditions: Endocrine tumors (most commonly thyroid cancer), and diseases of endocrine hyperfunction (hormone excess). This arrangement supports the development of expertise.
At present, due to institutional resource limitations, we are not co-localized. Regular multidisciplinary meetings are held to discuss challenging cases, to provide feedback for quality improvement, and to develop and implement improved treatment methods and technologies. As illustrated in our results, the care cycle for these conditions stretches for years, generally obligating lifelong surveillance as thyroid cancer is associated with an excellent survival rate but a significant recurrence rate of 10% at 10 years that cannot be neglected.[1
] We hold ourselves accountable for the surveillance process and for managing all recurrences. In providing full service for the aforementioned endocrine diseases, we do not hesitate to manage patients nonsurgically when indicated, thus avoiding unnecessary costs and risks. As we move toward a co-localized IPU we will thus phase out the term “surgery” to create an Endocrine Center, which will function alongside the affiliated Diabetes Center IPU.
Measure outcomes and cost for every patient
We have prospectively tracked patient outcomes in a dedicated endocrine surgery database since the establishment of the SES. Thyroid cancer outcomes are just one of many clinical endpoints that we continuously monitor. Through our long-term scrutiny of the effect of CND, we have demonstrated its beneficial impact with respect to Tg levels and re-operation rates. Though CND remains controversial,[2
] the point we wish to drive home is that, regardless of one's position on a given therapeutic technique, systematic outcomes measurement is mandatory for all providers in order to enable quality improvement.
From the economic standpoint, we are assisted by a financial services and decision support department that accounts for costs in a relatively sophisticated manner in comparison to most other hospitals. Costs are subdivided into fixed and variable costs, and are attributed to individual cost centers within the hospital (bed costs, pharmacy costs, laboratory costs, etc.). These figures are considered separately from charges, which appear to bear little relation to costs. We have previously demonstrated cost savings associated with standardizing postoperative calcium management in patients undergoing thyroid surgery,[20
] but this is the first time we have described cost differences attributable to different facilities within our organization. The considerable cost savings associated with outpatient endocrine surgery have motivated us to develop innovative methods enabling further shifting of cases to the outpatient setting to the extent possible without compromising patient safety. These methods include rapid parathyroid hormone (PTH) testing, preemptive analgesia to minimize postoperative pain and nausea, and pharmacy changes permitting prompt and/or anticipatory management of postoperative metabolic disturbances.
Move to bundled prices for care cycles
A current obstacle to the implementation of bundled pricing for the diseases we treat is the fact that reimbursement continues to occur at the department level rather than at the IPU level. In the case of the UCLA kidney transplant program, this obstacle was surmounted through a sophisticated cross-departmental financial agreement.[15
] Perhaps the most important obstacle to bundled pricing is lack of motivation on the part of insurers, as the diseases we treat are less costly on the population level in comparison to attractive targets such as joint replacement.[13
] However, because we accept that bundled prices would best serve our patients ultimately, we have started to develop cost-sharing strategies that will come to greater fruition when co-localization is achieved. This will serve to counteract the current distortion that certain aspects of care, namely procedures, are highly reimbursed while others, such as cognitive aspects of care, are poorly reimbursed.[14
Our multidisciplinary team does bear a significant clinical and financial burden due to the perverse incentives and moral hazards arising from our nation's current failure to reimburse providers based on the entire care cycle. We currently devote one full day per week to caring for patients who have had failed initial surgery elsewhere, thus requiring revision surgery at our tertiary care facility. We note with dismay that an ineffective (or even unnecessary) operation generates revenue equivalent to that of an effective one, and are resigned to the fact that we will therefore receive a continuous stream of such cases until reimbursement is tied to outcome. Revision surgery is costly to the hospital and to society, and exposes us to significant liability in taking on these high-risk cases. We are financially penalized for providing definitive care in a single episode for the great majority of our patients, eliminating the need for further procedures as evidenced by the data on CND. Similarly, poorly reimbursed long-term surveillance care is generally provided at a loss.
Integrate care delivery across separate facilities
As part of his growth strategy, Dr. Delos Cosgrove, CEO of the Cleveland Clinic, aimed to have multispecialty teams use system-wide resources to deliver the right care at the right place for every patient, at the right time with the right cost.[16
] In 2008, in response to seismic damage to the old UCLA Westwood Hospital, all inpatient care at the site was transferred to the new 480-bed Ronald Reagan Hospital (RRH), which was slightly smaller than the old one. The reduced capacity, coupled with the closure of several other hospitals in the region at that time, created a critical high census problem at RRH. The SES, then run as an entirely inpatient service, was thus confronted with the following dilemma: how could we expand a new clinical program without any beds for our patients?
The answer was to expand across facilities within our organization. The prerequisites were creation of the necessary physical environment (obtaining dedicated laboratory and imaging resources) and personnel environment (training of dedicated nursing staff) to support endocrine surgery at the community inpatient facility and outpatient facility. The result of this effort was substantial growth associated with a decrease in the tertiary care inpatient footprint of the service. Additional gains included >50% cost savings at the outpatient facility (largely attributable to reductions in length of stay, which are currently about 3 hours for our outpatient procedures compared with an average of 3 days nationally), improved financial margins, a reduced risk of nosocomial infections, improved patient satisfaction, and reduced patient out-of-pocket expenses. Traditionally, endocrine procedures have been performed in the inpatient setting for fear of complications arising that require inpatient facility resources, but an increasing number of centers are moving towards performing these procedures in the outpatient setting, with very low complication and readmission rates.[4
] In our own experience, there have been no unplanned readmissions and no postoperative bleeding events associated with the outpatient setting. As outlined in , careful patient selection is paramount, as the outpatient care setting is essentially intolerant of any significant perioperative complications. Therefore, we do not recommend that outpatient endocrine surgery be attempted unless outcomes have already been optimized through systematic, experience-based, volume-driven performance improvement.
Expand areas of excellence
Within a relatively short period of time, the UCLA SES has experienced rapid expansion of its market share and geographic area of influence, thereby transforming regional referral patterns. Porter describes this trend toward regionalization as natural result of effective competition, which goes hand-in-hand with optimization of patient value through a self-reinforcing process he terms the “virtuous circle in health care delivery” . High patient volumes are the principal motivator for care systematization using methods such as clinical pathways. Experience breeds the confidence and knowledge needed to increase efficiency. Experience enabled us to identify and eliminate unnecessary steps in care, resulting in the reduction of laboratory utilization by 70% and total cost by 60% by safely transitioning care to the outpatient setting.[8
The virtuous circle in health care delivery. Adapted from: Porter ME, Teisberg EO. Redefining health care: creating value-based competition on results. Boston: Harvard Business School Press, 2006
An economy of scale generates adequate return on investment to justify dedicated personnel, facilities, and equipment incorporating expensive new technology. For example, we invested in the fastest platform for the measurement of intraoperative PTH levels (assay turnaround time 8 minutes) and a dedicated technician to run the assay. Other innovations, arising principally from multidisciplinary collaboration, implemented during the past six years include a new probabilistic strategy of interpreting intraoperative PTH values,[5
] a new method of selective venous sampling,[9
] the development of dynamic computed tomography (4D-CT) for parathyroid imaging, and a multi-level reflex algorithm for the molecular diagnosis of thyroid tumors. All of these factors contribute to the enhancement of the SES's reputation, resulting in increased patient volume and the continuation of the cycle.
Create an enabling information technology platform
In most health care systems, each patient encounter stands alone, and valuable information about the patient is not propagated to the next encounter. With the implementation of the enterprise-wide electronic health record (EHR) at UCLA on March 1, 2013, health care providers will share a single problem list, medication list, and past medical and surgical history list. As the patient passes though different encounters in the course of their treatment, the EHR will update the patient's medical record in a streamlined manner. Healthcare providers that have a longitudinal relationship with the patient (including outside providers such as referring physicians) can easily communicate with each other using the EHR, receive notifications involving patient data when appropriate, and truly function as members of a team in an integrated fashion. In addition, the patient will become part of this team by having real-time electronic access to their medical record thought the Internet.
From a quality standpoint, the EHR will collect structured data, in the form of discrete fields rather than free text, from all stages of the care cycle. It will allow detailed analysis of outcomes, costs, and ultimately value, which will be fed back to providers in a timely fashion to drive improvements in care.