Keys to Success in Healthcare

Las Vegas—It is no secret healthcare providers are facing challenges. Hospitals and physicians have struggled with reimbursement and profitability. They are also concerned with selected provisions of the Patient Protection and Affordable Care Act and Medicaid expansion.

Yet some of the issues that are commonly referenced throughout the industry are misleading, according to David V. Axene, president and consulting actuary at Axene Health Partners, LLC. He spoke at the NAMCP meeting about what he termed “myths in healthcare,” and provided examples of ways the industry can improve.

Mr. Axene said technology in healthcare is advanced and not a major problem. However, the industry has “an archaic administrative system,” in which employers and governments, for the most part, pay for services, individuals consume the care, and providers set prices that are not consistent with the demand.

“The system as a whole is poorly structured,” Mr. Axene said.

He also does not believe there is a physician shortage. He said most cities have an abundance of physicians, although the distribution is flawed: there are too many in populated areas and too few in rural areas.

“Most people disagree with me,” Mr. Axene said, but “I feel strongly about that.”

In recent years, there has been an emphasis on delivering quality care, which many believe requires more time and services that hinder physicians. However, Mr. Axene said research has shown the highest quality care is found in the most efficient delivery systems. He suggested the best way to improve quality is to quickly identify what is wrong with patients and then treat them right away, as the shortest length of stay in a hospital is associated with the highest quality.

Another myth, according to Mr. Axene, is that medicine is based on hard science. In fact, he said that only 20% of what physicians practice is based on hard science. They rely much more on what they learned in medical school and what attending physicians tell them. Mr. Axene said that practicing evidence-based medicine leads to healthier patients and reduced costs.

Mr. Axene added there are variations in different regions of the United States, with some states offering better, more efficient care than others. He cited a study that found the average length of stay in a hospital after a myocardial infarction was between 4 and 5 days in Boston, Massachusetts, and 18 hours in Portland, Oregon. He said the variations could be eliminated if all physicians utilized evidence-based guidelines.

Another perception is that physicians sometimes rush through appointments, wanting to see as many patients as possible, to avoid malpractice issues. However, Mr. Axene said the most efficient health plans with the lowest utilization levels have the lowest rate of malpractice claims, and that physicians in a fee-for-service environment see more patients because they are compensated for doing so.

Through his research, Mr. Axene has identified factors that are found in the most successful health plans. He said the top priority should be management of physicians. Plans should focus on identifying providers who are open to being held accountable for the care of their patients, willing to share results with other physicians, and performing only necessary tests or procedures.

Top health plans also have a strong executive leadership team that balances a focus on business with caring about their employees, physicians, and members, according to Mr. Axene. They have financially accountable managers who monitor performance closely and have the ability to sell their products and explain how they differ. They are also focused on member satisfaction, which includes gaining the trust of their members and explaining to them the value they receive from the plan.

Health plans face some potential issues, though, according to Mr. Axene. They have to determine whether they will operate as a for-profit or nonprofit business and determine corporate structure in terms of whether physicians, hospitals, business executives, venture capitalists, or others are in charge of making the decisions. They also must identify the role that primary care physicians will have and whether to have a fee-for-service or capitation payment system.

Mr. Axene cited Providence Health Plan in Oregon and Intermountain Healthcare in Utah as examples of successful integrated health systems that focus on evidence-based medicine and feature collaborative management. He added that Oregon’s coordinated care organizations and accountable care communities in San Diego, California, are models to follow.

However, Mr. Axene said only <10% of system-sponsored health plans thrive, and he has concerns about the viability of accountable care organizations unless participating physicians are fully committed to that model.