Category Archives: P4 Medicine Update 10/5/11

Steve Allen, MD; CEO, Nationwide Children’s Hospital, Steven G. Gabbe, MD; CEO, The Ohio State University Medical Center and Gerald McDougall, head of the health practice for PricewaterhouseCoopers discuss the impact of healthcare reform.

In this time of health care reform, where in many ways providers are getting pressure to reduce spending with an expectation for more durable outcomes, what are our system needs to deal with this? What changes do you see on the horizon?

 Allen: In pediatric health care, the pressures are a little different from adult population. So much of what we do is related to Medicaid – in most pediatric hospitals more than 50 percent of patients are covered by Medicaid. Where we see challenges: We have to figure out how to provide care for a lower cost. We go through an initiative every year to cut our expenses so we can continue to support our mission. We have to learn how to manage the population’s health better. I feel very strongly that whatever direction health reform takes, we will be compensated on how well we manage clinical outcomes over a long period of time, not just acute episodes.

 Gabbe: The Affordable Care act is going to force us to do the right thing: look at health care longitudinally provide care of the highest quality and highest safety, while also reducing readmissions and assessing those patients at the highest risk. Another challenge in academic medical centers is that our bottom line is what we have used traditionally to fund our education, research and new program missions. That bottom line is going to be constrained. We’re going to get paid less for what we don’t do well, perhaps a little bit more for what we do well, but we’re going to have to find other sources of financial support for research, education and unique and innovative programs that we have developed and want to develop. Patient care itself, the pillar for funding sources, is not going to be there as it has in the past.

 McDougall: No matter what happens in political dynamics, structural shifts will occur and evolve. It’s important for policymakers and the public to understand the context of academic medical centers. Does Washington understand they approach $600 billion in our economy? What would Columbus be without Ohio State Medical Center as an economic driver? Sometimes the value of education and research is not realized as a unique asset.

 Gabbe: Columbus health care provides 36,000 jobs.

We hear about the need for better care coordination. How does that play out in improving the health of our population?

 Allen: We have 300,000 children for whom we are responsible for their clinical and economic outcomes. That has allowed us to change our behavior so we do more things to prevent them from going into the hospital and produce better outcomes. Infant mortality in this country is higher than in most developed countries and the No. 1 thing driving that is prematurity. It’s big business for children’s hospitals across the country. But it would be so much better for those babies and their families and our society if those babies didn’t arrive so early. We are partnering to prolong pregnancies and decrease NICU utilization. That is counter to economic interests of hospitals, but it is the right thing to do with society’s dollars allocated to health care.

 Gabbe: Most care we deliver has been episodic with very little interaction with the health system between those episodes. EMR is changing our ability to coordinate care. At Ohio State most patients we see for hospitalization are outside Franklin County. We need to make sure when they’re hospitalized that spend as much time planning for their discharge as we do providing their care. Patients need to go home to a welcoming health care environment. We should coordinate our efforts with the primary care community, make sure patients go home with right medications and know how to take them, ensure they see their primary care physician in a timely way. That’s how we’re going to impact readmissions and wellness once that patient goes home.

McDougall: Behavioral health is a big component of costs. We need to do a better job in behavioral health that I think we’ve been grossly underfunding for the longest time. Now we’re paying for it.

Governor Kasich is very interested in commercialization and owning the technology-based economy for the state of Ohio. How do you see this fitting into our plans? What types of partnerships might we see in the future, because revenue streams from the past may not be there as much as they have been in the past.

Gabbe: Ohio has seven medical schools, three of them have clinical and translational science awards from the NIH. Linking medical schools and medical centers to develop common IRBs, shared use of biorepositories and electronic medical records will help create clinical research organizations. Governor Kasich and we (at OSU) believe that we have a great opportunity to develop clinical research organizations in the state that can be the research basis for new drug development and technology transfer and new revenue sources for our medical schools.

McDougall: Need to have an organic strategy (very costly with great barriers to entry). This is still very important.

Retention – create an environment where companies are grown and retained.

Recruitment – Recruit companies at a global level. Role of the academic medical center in knowledge is a huge opportunity where a multitude of different funding sources that didn’t exist five years ago, exist today. Opportunities are endless. Execution of those opportunities is challenging. This takes a lot of patience, planning and alignment.

Gabbe: First Customer Concept – Agreement by a group of academic medical centers, that when an inventor comes up with new technology, we as a group of academic medical centers will do whatever we can to evaluate, refine and implement the new technology, leading to improved patient care.

Because of accountable care act and other requirements, we have a lot of hospital systems asking for assistance to develop efficiencies. Will we see more hospital mergers between academic centers moving forward to address these issues?

Jerry: Identifying how to develop coordinated care and also the health economics situation is a work in progress.

How do we cut our spending instead of preserving it?

Gabbe: We have to practice evidence-based medicine. We need to have difficult conversations about end of life care. 25% of medicare costs surround end of life care. There will be a big change around people’s expectations overall.

Where do you see things going?

Gabbe: Healthcare continues to attract the best and brightest people. Medicine has great rewards. Every day you pick up the newspaper and hear a story about healthcare, because that’s how we’re going to make this better and keep the conversation going. The future of medicine is very bright.