A revolution in health care

Local Center for Healthcare Value narrowing the gap between care quality, patient satisfaction and out-of-control costs

Story by Gina Mangan

 IT’S NO ACCIDENT that Dr. Arnold Milstein, a consultant to some of the nation’s largest Fortune 500 companies, stumbled upon ThedaCare in Appleton.

As the chief physician for Mercer Health & Benefits and a former member of the National Committee for Quality Assurance (NCQA), you could say it’s been Milstein’s business to identify health care delivery systems that offer high quality care at low costs. 

When he began investigating the nation’s top scoring health care plans based on a composite of NCQA quality of health care measures, he expected to run across some of the biggest, most recognized integrated health care systems in the industry. What he found was a relatively small health care plan called Touchpoint owned by an equally small health care system called ThedaCare and operated in an unfamiliar community called Appleton, Wisconsin.

Milstein half expected the care to be expensive, because he said few health care delivery systems in the United States have been able to simultaneously distinguish themselves with high quality of care scores and low costs per person. 

Milstein was pleasantly surprised. After contacting the benefits manager for the State of Wisconsin employee group, he learned that the Touchpoint Health Plan was one of the state’s lowest cost plans per person per year. 

“It was a double win, and really just one of a handful of places doing it across the country,” said Milstein, who filed it away in his memory bank. That was earlier this decade.

A few years later, he would pull out those memory files when some of his large business clients asked if he knew of any health care systems able to achieve that double win. And would they be willing to help systems in other regions of the country achieve the same thing?

Turns out, ThedaCare is doing just that after providing seed money for the ThedaCare Center for Healthcare Value, a nonprofit organization established and led by the engineer of Thedacare’s quality improvement journey, former CEO Dr. John Toussaint. Not only was Toussaint a practicing physician and CEO of a health care system, he was a founder of the Touchpoint Health Plan.

“I’ve seen health care from all angles,” said Toussaint, who serves as the only fulltime executive at the Center for Healthcare Value. He is supported by an administrative assistant and a board of directors that seats some of the most reputable names in the nation’s health care improvement and quality movements. They include Milstein, former Alcoa CEO and U.S. Secretary of Treasury Paul O’Neill, founder and leader of the Lean Enterprise Institute James Womack, ThedaCare CEO and President Dean Gruener and a representative of the Institute for Health Care Improvement.

Touchpoint – which has since been sold and its health plan merged into a large national carrier – and its previous owner ThedaCare had achieved its patient value, in large part, by applying lean manufacturing principles to reduce waste and error in the system and by transforming the culture within the organization. Using quality improvement tools borrowed from manufacturing, ThedaCare reduced inpatient cost by 25 percent, improved quality, and increased patient satisfaction.

“I went to ThedaCare, and I was extremely impressed,” Milstein said. “What I found there was the same kind of systematic quality measures that are working in American industry applied to the health care industry.”

The ThedaCare Center for Healthcare Value’s goals are sweeping and run parallel to the nation’s great debate on health care reform. Not only is Toussaint charged with spreading his experience and knowledge about how to streamline healthcare costs and improve quality, he and others involved in the initiative are setting out to reform the entire healthcare marketplace to one in which patients and purchasers buy health care based on low cost and high value. Such reform, Toussaint said, would spur competition among health care providers to improve patient outcomes and reduce costly waste and mistakes.

Toussaint said he launched the Center for Healthcare Value, in part, because he needed all the national leadership he could get to overcome the barriers to providing greater value for customers. The fact was, ThedaCare was successfully improving its health care – as evidenced by data on patient outcomes – and it was doing so at a lower cost than most other systems, as evidenced by yet more data. Yet, it wasn’t necessarily being rewarded with more customers. In some cases, it was actually penalized, he said.

The Center for Healthcare Value’s vision is to help other health care organizations achieve a 50 percent reduction in waste, which translates into more than a 10 percent improvement in healthcare spending.

The problem now, Toussaint said, centers around a dysfunctional health care marketplace marked by a government and private insurance payment system that rewards the volume of procedures rather than patient outcomes. The challenge, he said, is to structure the market in a way that health care providers are competing on the basis of providing better quality at lower cost. That calls for competition to take place at the most basic level – at the bedside in the form of care to patients, not at the level of insurance companies competing on the basis of who can get the biggest discounts from providers.

“If we didn’t take this discussion to a national level, then all the work we’ve done here at ThedaCare was for naught. In the end, we would see increasing costs for better quality anyway,” Toussaint said. “So we want to move to restructure the marketplace in a way that rewards value to patients.”

In order for government, insurers and patients to make decisions based on high quality care and low costs, they need to know how health care providers are faring in those areas, Toussaint said. That calls for greater transparency of healthcare outcomes and costs, he said.

Toussaint describes his day-to-day work at the Center for Healthcare Value in four distinct parts, all of which must work in consort if the Center is to achieve its mission.

“I like to call it a do-tank, not a think tank,” he said. “We’re not just talking about it. We’re doing it.”

Greater transparency

ONE OF TOUSSAINT’S GREATEST WISHES is for a Consumer Reports on Health Care, which would provide patients, employers and the government with information on companies providing the best value.

“At the Center, we are trying to get accurate information into the hands of individual patients and the people who make the decisions about where patients should go for their heath care,” he said.

ThedaCare is a founder and leader in the Wisconsin Health Information Organization and the Wisconsin Collaborative for Healthcare Quality (WCHQ). The WCHQ Web site provides public data on healthcare outcomes of many of the state’s largest health care organizations in relation to evidence-based standards. Consumers can compare data related to everything from diabetes management to breast cancer screening to the hospital care of heart attack patients.

Not only is that data being continuously added to, Toussaint said, but the Center for Healthcare Value is working with organizations to compile and report three years of cost data comparing physician groups. The cost data, compiled from insurance claims reports, will be combined with patient outcome data to provide consumers, employers, insurance companies and government with information regarding which health care systems are providing the best care for the least amount of money, Toussaint said.

Ideally, he said, the purchasers of health care will use the information to compare providers and make their purchasing decisions. The information is already available for purchase from employers and insurers. It will eventually be compiled into reports that can be understood by the individual consumer.

The movement toward data transparency in Wisconsin is unique, Milstein said.

“It’s a very rare state where the customer – or even employers – have the ability to compare doctor group versus doctor group, or hospital versus hospital,” he said. “The health care industry in general has resisted performance transparency, which keeps customers ignorant about where they can get the best value.”

Learning and sharing

AT THE SAME TIME THE CENTER for Healthcare Value is working to expand and add to the data mart, it has committed to working with other health care organizations around the country to create a framework and methodology for the radical improvement of health care delivery, Toussaint said.

The Center will draw on the success and experience of ThedaCare’s quality improvement initiatives, linking them with other healthcare reform initiatives. The Center for Healthcare Value has partnered with the Lean Enterprise Institute to create a “Health Care Values Leader Network” of organizations that can share and document best practices.

“What we’re finding is that every organization has some best practices, so we’re trying to collate these together to build a common framework,” Toussaint said. “We’ll then document what works, so that others can learn and begin to change the way they deliver health care.”

Toussaint and board member Dan Ariens estimated in a recent article that if all hospitals redesigned care and achieved results similar to ThedaCare, close to $400 billion could be saved on Medicare inpatient spending during the next 10 years. A 25 percent reduction in non-Medicare spending could result in another $1.3 trillion savings over the next decade, according to Toussaint and co-author Ariens, president of Ariens Inc. in Brillion.

There are approximately 15 health care organizations from coast to coast involved in the Center’s first collaborative network, dubbed “The Healthcare Value Leaders Network.” Representatives of heath care organizations that include John Hopkins and Harvard met for the first time in June at ThedaCare, where they toured its sites and viewed how work is done on the floor and at the bedside. The next network meeting will be in November.

During the June visit, network members would have witnessed something like ThedaCare’s Collaborative Care ward at Appleton Medical Center, where the cost of care is approximately 30 percent less than a traditional ward. 

In the ward, every patient room is visible from the central nursing station and designed in a way that promotes efficient work flow. An open space in the center of the unit accommodates healthcare teams who meet to discuss patient care plans. A nurse, doctor and pharmacist meet with the patient and family within 90 minutes of hospital admission. 

The team stays together during morning rounds. A pharmacist is on hand with a computer monitor that indicates each patient’s current medications and a computer monitor with current lab results or orders. Meeting with patients in person to confirm drug usage and consulting with doctors about new prescriptions has reduced drug errors. 

The pharmacists not only gather patients’ drug information, but they monitor kidney function to assess drug reactions and consult with family members. They sometimes determine dosage. Nurses have been freed to spend more time caring for patients, and doctors receive fewer calls later in the day with questions about orders, resulting in fewer disruptions and misunderstandings. 

It’s through these types of process changes that costly waste and mistakes can be reduced, Toussaint said.

James Womack, founder and chairman of the Lean Enterprise Institute, is one of the nation’s thought leaders on the topic of lean management systems. He coined the term “lean production” in relation to the Toyota Production System. His Institute is devoted to helping other organizations transform themselves into lean enterprises. 

While Womack said he vowed never to become involved in health care, he’s on board now as an interested observer and an expert in lean process thinking. His organization is assisting in the knowledge gathering and publishing of information.

“Our important contribution is to be theoreticians and to set up a way so that everyone can describe their experiments, see each other’s experiments, collect the data and determine what is working and what isn’t,” Womack said. “We’re giving one another emotional support, because this is really, really hard work. Transforming organizations isn’t easy. It’s never easy, but nothing worth doing is easy.”

Getting the word out

DIRECTLY RELATED TO ESTABLISHING a common framework for quality in healthcare is the sharing of information through the written word. A third aspect of Toussaint’s work at the Center for Healthcare Value will be publishing the knowledge so others can learn from it.

Articles are being published in prestigious journals that include Health Affairs and the Harvard Business Review. Toussaint, with co-author Roger Gerard of ThedaCare, is in the process of completing a book that describes the cultural challenges of the lean transformation in a health care organization. Calling it a “how not to book,” the men have chronicled the mistakes they made and learned from. They hope the health care managers and physician leaders can also learn from their mistakes.

“People often don’t understand what we’re talking about, so we’re trying to document this as much as possible,” Toussaint said. “There’s really no body of work out there about lean transformations in health, so we need to create that body of work.”

Influencing policy makers

IN ADDITION TO PUBLISHING A BODY of knowledge and experience, Toussaint is also beating the drum before policy makers in Washington and Wisconsin – at a time when those policy makers are grappling with reform solutions that are counterproductive to his own ideas.

Without fundamental changes in the payment system, all of the other work will be for naught, he said. 

“The current system doesn’t support quality and value,” Toussaint said. “We’re still being paid on volume and not quality outcomes. That has to change.”

For  example, hospitals that are able to provide quality care resulting in the reduction of the length of a hospital stay below Medicare efficiency standards are penalized with lower Medicare reimbursements, despite having better patient outcomes and higher satisfaction ratings.

Toussaint and some of his cohorts have spent time with representatives in Wisconsin and opened communication with some of President Obama’s advisors. He is working with several other organizations that influence Congress, including the Brookings Institution and the Institute of Medicine. They are also meeting directly with legislators and presenting their case to the media.

“We’re trying to get the message delivered in a lot of different ways,” he said. “You could call it a gang tackle.”

As it stands now, the debate in Washington centers around just two scenarios, Milstein said. The first is not worrying at all about the uninsured. The second is covering the uninsured by raising taxes. Neither is appealing, he said.

“What’s great about the Center for Healthcare Value is it’s aimed at opening up a middle path,” Milstein said. “It’s a path that’s about teaching and providing incentives to American doctors and hospitals to produce more health with fewer dollars.”

Gina Mangan is a freelance writer based in Oshkosh and is raising three children. Readers can email her at gmangan-schmitz@new.rr.com.