Dr. Josh Luke on Forbes, Will Obamacare’s Medical Record Requirement Be the Biggest Bust in History?

Originally published on Forbes.com

Let’s flash back to 2010. It made so much sense that any healthcare reform act would include a mandate that required hospitals to aggressively implement electronic medical records (EMR) so patients could finally have access to their own personal health data.

There wasn’t much push-back from either side of the aisle on this condition known in the Patient Protection and Affordable Care Act (PPACA) as “meaningful use.” After all, the information age was upon us yet hospitals were still photocopying records, charging patients for the copies, and telling the patient they needed to come back in 72 hours to retrieve the records. Hospitals frowned upon the process as it usually symbolized a potential lawsuit on the horizon.

It seemed that Americans as a whole were united that meaningful use was a positive step to empower the patient to be involved and educated in their own health management. But one year went by and then three or four, and, despite the threat of penalties for missing implementation deadlines, the hospital industry lobbied successfully to limit these requirements to implementing components of the EMR that helped them maximize revenues.

The top three EMR vendors became so powerful, it was not uncommon for them to pass up on opportunities to work with small and midsized hospitals and health systems. I know, as I was one of the CEO’s who was told, “You’re not big enough for us to justify working with you.“ What about those big hospitals that did work with these top vendors? They were often boot-strapped for years and unable to fulfill other priorities as a result of the cost allocated to their EMR implementation. It was a highly publicized nationwide epidemic for many hospitals.

Despite great profitability for the vendors, little was done in regard to making a patient’s personal health record more accessible and most hospitals made almost no progress in the initial five years after PPACA passed. In 2016, as a handful or EMR vendors rose to the top and captured the majority of the core hospital market, Congress called several of their leaders back to Capitol Hill to address the lack of progress and implemented new, heightened expectations around implementation and compatibility.

It makes sense if you break it down into a timeline:

  • Congress requires EMR implementation in PPACA in 2010. The EMR space explodes in 2011 as a result, and hospitals are the sole payer to EMR vendors
  • Despite ObamaCare prioritizing patient access, population health, and staying healthy at home, hospitals had little financial incentive to enhance access or keep patients healthy at home into 2015.
  • Prior to 2016, almost no hospital dollars were spent on EMR vendor software that supported access or population health, and therefore the EMR vendors had little incentive to prioritize these needs as well. Then Congress stepped in by 2016 and asked EMR companies and hospital leadership to focus more on compatibility and access.

 

But in early 2018, just as health systems started shifting their meaningful use priorities toward patient access, a strange thing happened. A few technology companies much larger and influential than those in the EMR space entered the electronic patient record discussion.

Have you ever heard of Apple? What about Amazon or Google?

These companies have a global reach that makes the EMR vendors’ footprint look almost irrelevant. In January 2018, Apple announced a partnership with several major health systems to make patient records accessible on their mobile phones. In that same month, Amazon announced it was partnering with JP Morgan and Berkshire Hathaway to rethink how healthcare benefits are offered to employees. Within a few short months, Google made a number of announcements and key hires as it moved into the healthcare delivery space as well.

While its unlikely Apple, Amazon, and Google will prioritize becoming major EMR providers in coming years, it’s not at all unlikely that this goal is within their long-term plans. More importantly, these global tech giants realize that the EMR is not the most critical information available in the healthcare process. Much more important than the EMR is the HIPPA-compliant, cloud-based parallel that allows patients and caregivers to converse and get educated from their mobile device. Think of a group text, or the Slack Application, specific to healthcare. There are already several effective patient management apps out there. These applications vary in scope, but Stellicare, MeUCare, and LoopdIn are all examples of applications currently available to the consumer that help manage a patient’s sensitive health information.

Remember, in the model of the future, when a patient is hospitalized, more often than not it will be a failure of the population health system. The focus of healthcare in the future is on being healthy at home, which requires self-management and caregiver education. These applications enhance those skill sets. I have lived this personally as my mom is currently in the advanced stages of Alzheimer’s Disease. My family has used a group text to accomplish this, but these new applications not only allow us to opt-in any doctor, pharmacist, caregiver, or family member, they also allow us to download instructional videos and resources.

As a result of this excessive EMR spending, hospitals pass the expenses onto the consumer and businesses in the form of rate hikes and the cost of healthcare in America continues to skyrocket. The meaningful use requirement is no doubt one of the contributing factors to healthcare’s continued hyperinflation.

So here’s the good and the bad of President Obama’s meaningful use experiment: big EMR vendors built up power and influence and, just as it peaked, several companies with much greater influence entered the arena and forced the EMR vendor back to the table to re-prioritize. Depending on how quickly Apple, Amazon, Google, and others enter the arena, the success and livelihood of these top EMR vendors may be on the line. EMR vendors’ failure to prioritize population health software and applications may cost them in the long run.

If Apple, Amazon, Google, and others create more effective means of managing and making accessible patient information and records, will Obamacare’s meaningful use requirements prove to be the biggest waste of billions of dollars in the history of American business? Time will tell.

Dr. Josh Luke is an award-winning Futurist, hospital CEO, two-time Amazon #1 best-selling author, and a member of the faculty at the University of Southern California’s Sol Price School of Public Policy. He is a well-known public speaker on the topic of healthcare affordability and transformation and writes regularly for LinkedIn as The Healthcare Affordability Authority. Visit www.DrJoshLuke.com for more information.

Dr. Josh Luke on Forbes, providing time management wisdom along with other CEO’s

Originally appeared:

https://www.forbes.com/sites/forbescoachescouncil/2018/11/21/15-big-challenges-youll-face-as-a-modern-ceo-and-how-to-solve-them/#679812c1398e

Every leader faces trying times, both internally and externally. Those external factors are often the most difficult to contend with, since they’re outside of a leader‘s control. In fact, the current business climate has generated many shared concerns among managers across the board, regardless of the industry they’re in or type of business they operate.

Below, 15 members of Forbes Coaches Council shared challenges their executive clients are struggling with most today. Follow their advice to navigate these common issues.

1. Making Space For Reflection

My CEO clients know and believe that time and space for reflection and thinking is crucial for clarity and strategic process. And they have a hard time finding the space. Many clients are scheduling space in their calendars and challenging themselves to treat it as a priority just as they do other meetings. – Renelle DarrInSight Coaching & Consulting

2. Navigating And Communicating Constant Change

I haven’t worked with an organization or leader who isn’t struggling with how to navigate change, whether it is in the organization itself or industry overall. The keys to leading change are trust and clear communication. Build trust with your teams by creating avenues for open, two-way communication, not only about the change itself but also timing and impact. – Tonya EcholsThrive Coaching Solutions

3. Making Progress Amidst Chaos

It is so easy to get distracted and be pulled in so many directions when trying to balance creating an exciting future while maximizing results today. Taking the time to communicate constantly and engage your teams in both the excitement of creation as well as the dedication to providing results can ensure that you provide the reassurance and sense of stability an organization needs. – Rose CartolariRose Cartolari Consulting

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4. Staying Ahead Of The Competition

With other companies offering a similar service to yours, how do you stay competitive in a crowded marketplace? Instead of focusing on the competition, get intimate with your company’s unique differentiators and value proposition. Remove yourself from the commodity market that competes on price and quality, and focus on innovating your unique approach, exceptional skills and customer intimacy. – Michela QuiliciMQ Consulting and Business Training, Inc.

5. Finding Talent In A Good Economy

Most of my CEO clients struggle to find good help. It’s the curse of a good economy. In bad times, employees are everywhere. In good times, all the good employees are happily employed and taken care of. You must learn to recruit talent in a good economy. You have to seek out employees because most are happy and not seeking further employment. – Ryan StewmanBreak Free Academy

Forbes Coaches Council is an invitation-only community for leading business and career coaches. Do I qualify?

6. Overwhelm

Many of my CEO/executive clients seem completely overwhelmed, mostly by problems coming at them 24/7. I teach them prioritization techniques, and I also serve as a “vent buddy” for them. Having a vent buddy is really helpful. It needs to be someone trustworthy and discreet, who will listen, not judge, not try to solve the problems, but just be there for venting. – Gregg WardThe Gregg Ward Group

7. Retaining Top Talent

In today’s economy, jobs (and better-paying ones) are plentiful. Companies need to find ways to engage employees in new ways, and it may be different for each one. Are they mission-driven? Are they vision-driven? Do they thrive on cooperation/teamwork? Understand what drives each employee and create a work experience that matches them. – Adam KipnesCoach Adam Kipnes

8. Building A Strong Management Team

Having a strong management team will have the most impact on any challenge a CEO/executive is struggling with. As companies grow, they often outpace their management expertise. A CEO should focus their time on getting the right managers in place (from internal or external sources), and then have consistent management meetings focused on strategic initiatives and problem solving. – Erin HoffmanCollaboration Business Consulting

9. Creating Safe And Supportive Environments

With everything in the news and the #MeToo era, many leaders are struggling with promoting and maintaining safe and supportive work environments. An easy way to do this is by promoting a simple statement: people first. Then couple this statement with values of how people will work and communicate with each other in a people-first initiative. Make sure to reinforce this through goals and training. – Kristy McCannGoCoach

10. Email Overload

A key to managing time is understanding that your priorities and daily “to dos” must come first. Responding to emails has to wait. Look at it this way: Your “to dos” are your priorities. The emails in your inbox are other people’s priorities. Take care of your business first! We have all sat down just to clear a few emails in the past only to find that we spent an entire day responding to them. – Dr. Josh LukeHealth-Wealth.com

11. Staying Relevant And Professional On Social Media

Many CEOs find it challenging to navigate the world of social media, which is growing daily and here to stay. Being hip and trendy while remaining professional can be tough for some executives. You must learn the dos and don’ts, and you must remember that just because something is effective doesn’t mean it’s professional. – Pasha CarterThe VIP Network

12. Taking Stands On Social Issues

Social issues and business really don’t mix well. However, CEOs are being pressured by stockholders and employees to take a stand on issues like immigration, for example. This is a slippery slope. You can’t please everyone. But you can address issues of those where it matters most — as long as you represent company values. – Randy BlockRandy Block

13. Nurturing A Strong Company Culture

My clients find it challenging to nurture their company culture in the current climate and as their company grows. They are keen on retaining their vibrant, collaborative cultures, so I advise them to capture what that means first. Their clear vision enables them to integrate culture nourishment into operations and continuously evolve. For example, they identify how training and rewards align with the culture. – Kelly Tyler ByrnesVoyage Consulting Group

14. Choosing The Right Opportunities

Forward-thinking CEOs are constantly seeking then filtering opportunities to grow and strengthen their businesses. Which ones are the best ones to pursue? That is the toughest part for them, and frankly for most of us. Learning to say no to opportunities that don’t meet the company’s growth and value criteria is essential, so that precious and finite time is spent on the best opportunities. – Evan RothRoth Consultancy International, LLC.

15. Defining A Legacy

When the economy is hot, executives feel pressure to take larger-than-normal risks to grow the company’s brand. Coupling this with the human needs of personal growth and the service of others, CEOs may take action on deals that don’t align with the company’s mission. I encourage clients to define their personal mission first and find alignment between it, the deal, and the company’s objectives. – Michael S. SeaverSeaver Consulting, LLC

Why Maryland is promoting the cost of hospital procedures by Dr. Josh Luke

Maryland wants residents to know how expensive certain hospital procedures are. The images featured in this post come from a recent advertising campaign.

Believe it or not, this campaign may prove to be a milestone in the long and arduous road to healthcare affordability in America. Simply put, hospitals are thriving businesses and always have been.

Hospitals play on the emotions of Americans who often can’t afford care. Until recently, hospitals were not even required to prove that the patients they admitted met the minimum criteria for hospitalization – leading to massive abuses of the system.

The hospital model, in a nutshell, was simple: find any justification we can to admit every patient we can and then bill the insurance company for payment. This model, known as Fee-for-Service, led to the golden age of hospital success in America. I nicknamed it “The Fee-for-Service Free-for-All.” There was no accountability whatsoever and, as a result, the Federal Medicare fund is expected to be empty in the next twelve-to-eighteen years unless something changes.

The beginning of the end for this methodology was the Affordable Care Act (ACA), or Obamacare. The ACA implemented a series of initiatives requiring hospitals to meet minimum criteria for admission, or payment would be withheld and fines could be issued.  The ACA also forced the hand of hospitals to transform into value-based care models.

Much like the Medicare Advantage model, those who manage care in value-based care are provided allocated dollars for each patient by the Federal Medicare fund. As a result, all costs incurred by an individual patient for care in a month are accounted for by the private Medicare Advantage company as expenses. If any money remains at the end of the month, that residual becomes your profit margin. If you overspend the allocation, then it comes out of your own pocket. In healthcare, we call this a “risk model.” The government is forcing hospitals to enter risk arrangements to reduce over-utilization on patient services and, ultimately, reduce costs.

In short, Obamacare forced hospitals to transform away from a Fee-for-Service model and into value-based care models. This means every patient a hospital justifies for admission becomes an expense to the hospital and not a revenue opportunity. That’s a 180-degree turn!

For the record, this is not a politically-driven issue. The fact is that our Medicare fund is running dry at an alarming rate and the government needed a model that requires accountability.

In comes Maryland!  While most states are slowly crawling towards value-based care with many hospitals doing everything they can to try to get Obamacare overturned, Maryland was one of the first states to adopt a Total Cost of Care Model.

Total Cost of Care takes value-based care way above the level of the hospital or insurer. The state looks at the total Medicare Dollars spent on each provider annually and allocates the appropriate ratio or percentage of dollars of the overall state fund to each provider, including hospitals and physicians.

Think of Total Cost of Care like this: Instead of the hospital getting $1241 each month to be responsible for your mom’s care, as it would in an Accountable Care Organization or full-risk HMO, the Total Cost of care model sees the hospital allocate a specified amount for the year. For example, the state would give a hospital $48.2 million and say, “That’s all your getting from us for all the patients you care for this year. So, good luck!”

As mentioned earlier, while the rest of the country is mid-way through a slow crawl towards transforming to value-based care that began sometime in 2010, and will likely be complete by 2020, hospitals in the state of Maryland were forced to complete the transformation overnight, or risk financial failure.

As it stands, every patient admitted to the hospital, or provided a service by a hospital, in Maryland is simply an added expense to the hospital’s ledger. It’s a consolidated bottom line. The hospital receives a large allocation from the state annually, and every service provided after that is an expense. It’s an entirely different mindset; the hospital is the de-facto insurer now.

When you see an article stating that a single state in the United States of America is advertising the cost of hospital procedures, expensive ones at that, it may first give you pause. But when you realize that state in question is Maryland, a state bold enough to pave the way on converting to this model, it comes as no surprise.

In an effort to end the long-entrenched practices of over-admitting patients and over-ordering often unnecessary tests, Maryland and its hospitals made the bold choice to transform to the role of the insurer overnight. So the state and its hospitals are now the banker and, every time you access care, it costs them.

When you have a basic understanding of how Maryland is ahead of the game on value-based care, it is no wonder that its state hospitals were the first to say, “Let’s advertise our prices to weed out those patients who may not truly need an expensive procedure.” It’s the same tactic insurers have been using for years.

It’s the right move and the next step in this transformation. Just ask the insurer; it’s the oldest trick in the book, and the program was extended and expanded through 2023.

Dr. Josh Luke is a celebrated speaker, award-winning Futurist, LinkedIn Influencer, a faculty member at the University of Southern California’s Sol Price School of Public Policy, and author of Health-Wealth: Is healthcare bankrupting your business? 9 Steps to Financial Recovery. Drawing on his experiences as a hospital CEO, Dr. Luke delivers engaging and entertaining keynotes that teach audiences simple concepts on how individuals and companies can save thousands on healthcare. For more information on Dr. Josh Luke, please visit www.DrJoshLuke.com.

Original article link is available here.

Dr. Luke featured by Forbes in a column on Creating an Amazing Personal Brand

14 Steps For Creating An Amazing Online Personal Brand

Have you ever searched for a company’s website or social media page only to realize they have neither? If you have, odds are you got the impression they’re either not legitimate or way behind the times.

The same rule applies to the professional world. When you meet a potential business partner or apply for a job, the other person is going to look you up — and when they do, you want them to find your personal brand conveyed through a polished online presence.

Follow these tips from Forbes Coaches Council for building a strong personal brand online.

Read the whole article here.

The Million Dollar Question: What will Amazon Healthcare Look Like? by Dr. Josh Luke

They have their CEO. Now what?

Everyone wants to know what Dr. Atul Gawande plans to do now that he has been named Chief Executive Officer of the Amazon, Berkshire Hathaway, and JP Morgan (ABJ) partnership to create a new healthcare delivery model.

Since it’s the number one question I get asked nowadays, I thought I would provide an updated answer on my perspective.

Amazon is the 800-pound gorilla.

The others will follow Amazon’s lead as it has the infrastructure to scale direct-to-consumer as well as on the retail and wholesale side. When reviewing Amazon’s recent history, you’ll find many clues as to the preferred business tactics it employs that will transfer easily to healthcare.

Let’s take a look at a few of those clues:

  • Amazon has the supply chain in place and has redefined how consumers acquire goods and services in multiple industries, starting with books and expanding to, well, whatever you need. Before you say, “But healthcare is different,” buying books, clothing, electronics, and niche products used to be different as well. Then came Amazon.
  • Amazon has a successful track record of eliminating waste and middlemen throughout the supply chain. This problem is especially out of control in the healthcare delivery space. There are multiple middle-men at every step of the way.
  • Amazon has the buying power to stop old tricks and gaming by industry juggernauts. We’ve already seen it work around blocking attempts from Big Pharma when Amazon successfully acquired PillPack.
  • Amazon will identify the largest areas of wasteful spending on healthcare for employers and employees. Three likely targets for reducing wasteful spending will be:
    • Pharmaceuticals
    • Chronic disease management
    • Over-utilization of primary care

Let’s break these points down.

Reducing the cost of drugs for both corporations and employees is an obvious starting point and Amazon is already making strides. Although industry incumbents will undoubtedly resist and throw up roadblocks every chance they get, if anyone can work through these treacherous waters it’s a team of Jeff Bezos and Warren Buffet. Amazon has the supply chain, retail outlets, and delivery team in place as it is so they are well prepared for this transition.

The old saying goes that ten percent of your employees account for ninety percent of your healthcare spending. In healthcare there is evidence that an even smaller percentage of employees may account for more than ninety percent of spending. With that in mind, in recent years a number of companies emerged that provide turn-key services to employers to assist in managing employees with chronic diseases like diabetes. Although these programs usually begin as voluntary programs for employees, insurers and companies are getting more creative in how they increase premiums for those with chronic disease who choose to ignore tools, resources, and opportunities to live a healthier lifestyle.

Over-Utilization

Finally, this is a topic for a longer debate but the fragmentation of the primary care delivery model leads to significant over-utilization. Let’s cite some examples:

  • Employees using the Hospital Emergency Room as their primary doctor when they are ill.
  • Employees using an Urgent Care Facility as their primary doctor when they are ill.
  • Tele-Health: Although telehealth was intended to reduce over-utilization of primary care in the emergency room, urgent care, and even in a doctor’s office; to date, there is no evidence that this is happening. In fact, it appears that employer plans that include telehealth offerings may actually be increasing member utilization in many cases.
  • 24-hour call lines: The same issues exist with call lines that exist with telehealth – mostly to due to perceived liability. While patients reach out to a call line with the hope of avoiding a protracted visit to the doctor, they are almost inevitably told they need to go to the hospital or doctor.
    • Some of the common issues faced at the ER include: Extremely high cost; often no proactive communication with the patients personal doctor; liability concerns that lead to excessive over-utilization of testing, procedures, and unnecessary specialist referrals.

A growing group of employers are proving that emerging models such as Direct Primary Care (employers contracting with one physician group that provides a call line, telehealth services, and walk-in appointments) can reverse this trend of over-utilization and create more appropriate levels of care being chosen by employees. Amazon is likely to push the envelope on aligning these incentives. In fact, a few organizations have combined two of these three key over-spending areas (pharmaceutical spending and primary care over-utilization) into a hybrid Direct Primary Care model that also includes pharmacy benefit management. I have seen great results from Transcend Onsite Care in California and Diamond Physicians in Texas.

Alexa

Finally, Amazon also has one other wildcard product and service that can be a critical tool in improving patients’ self-management of their health: Alexa. In the industry, we have seen similar products introduced in recent years that were more specific to addressing the needs of a patient with memory loss – a chronic disease that requires prompting and reminders for what is often a complicated medication regimen. I am guessing that Alexa already has many of these capabilities and they will only be enhanced now that Amazon has skin in the healthcare game.

If you wanted to short version of my thoughts, well, there you have them. I believe what Amazon is doing is not as pioneering and radical as many make it out to be. I accept these concepts above to be the basic blocking and tackling we will see from Amazon in the near future, and remain excited to see what Dr. Gawande introduces after that.

“Alexa, get me an immediate doctor’s appointment at half the cost I am used to paying, and have the medication delivered to my house by tomorrow at twenty percent of the cost I previously paid.”

If anyone can make this happen, it’s Alexa. The least you could do is say please when speaking to her.

Dr. Josh Luke is a former hospital CEO, acclaimed speaker, healthcare futurist, and best-selling author of Health-Wealth with ForbesBooks. Learn more at health-wealth.com.

Original article link is available here.

A Feature on Dr. Josh Luke on HuffPost:
Value Based Care Explained Through Analogies

A few weeks ago, I was at the sold-out University of Southern California (USC) C-Suite Invitational in Los Angeles where I watched keynote speaker, Dr. Josh Luke, speak on value-based care and the future of our healthcare system. I watched as he energetically shook some sense into a room of hospital executives for about an hour. It was captivating and professional, but every few minutes I could see attendees squirm in their chairs.

Getting to know Josh over the past years, I realize he is healthcare’s version of that “ignored expert” in movies who predicts that a major disaster is about to happen, but none of his colleagues believe him until Earth is a few days away from obliteration. In the original Independence Day, it was Jeff Goldblum playing David, a MIT-educated scientist and computer expert who was called upon at the 11th hour to save the day.

Josh Luke is healthcare’s Jeff Goldblum. Let me explain.

Starting in 2012, Centers for Medicare & Medicaid Services (CMS) significantly changed the way they paid hospitals. Instead of paying for healthcare services on a volume basis, like the number of hospital stays, CMS is now paying providers based on the quality of care they provide to their Medicare patients. Additionally, the Affordable Care Act (ACA) authorized CMS to reduce payments to acute care hospitals with higher readmission rates and expanded the use of pay-for-performance approaches.

Shortly after these changes took place, the ensuing hospital panic began.

By 2013, Josh Luke — who became a hospital CEO at the age of 32 and went on to publish two books on readmission prevention and value-based solutions — became one of the most sought-after hospital consultants in the country. He founded the National Readmission Prevention Collaborative in 2013 and the National Bundled Payment Collaborative in 2015 to showcase some best-practice integration models. Hospitals who struggled with these new value-based initiatives and needed help improving their care coordination to avoid penalties were willing to pay a pretty penny for his advice.

For as long as most of us can remember, the more patients that landed in the ER, the more revenue that hospital generated. Many refer to it as a “heads in beds” mentality. Now, CMS and insurance companies (who own most of the the dollars) are pressuring hospitals to clean up their acts. Basically, hospitals are taking on more risk than ever before.

There were five overarching messages I took from the presentation (the same one that made everyone in the room uncomfortable) that I will try to explain to the interested layman through the use of analogies.

1. Hospitals are giant insurance companies now.

At the end of The Godfather Part II, after Michael Corleone watched his father pass away peacefully in a rose garden, Michael suddenly realized that he had take over his father’s messy drug business, whether he wanted to or not.

That’s what’s happening to hospitals right now. Hospitals are in the insurance business, whether they like it or not, and the boundaries between being a payer and provider is blurring as hospitals face more risk. “If you are the CEO of a hospital, you are basically the CEO of an insurance company,” Josh exclaimed to the crowd.

2. Skilled nursing facility (SNF) avoidance is real.

“Find me one American that wants to stay in a nursing home!”

Josh yelled this once or twice to the audience, and ironically, he is a licensed nursing home administrator himself. Home health (medical) combined with home care (non-medical) will continue to work symbiotically to create a new breed of home care workers I like to call “post-acute care extenders,” or PACERS for short.

These PACERS are like German Shepherds in the home — they are smart, well-trained watchdogs who provide love and companionship most of the time, but bark really loudly when they sense danger. Also similar to the PACERS, they are not usually the ones fighting the intruder, they’re trained to notify someone else of any incoming danger.

3. Hospitals should use their “risk-free” year more wisely to test new programs for bundled payment initiatives.

In 2015, the CMS took significant steps to expand the use of their bundled payment programs. By November 2015, CMS announced over 450 hospitals and even more physician groups and SNFs signed up for the program.

Then in April 2015, CMS initiated a rule for a new Comprehensive Care for Joint Replacement (CJR) initiative, which forces over 800 hospitals to set a spending target based on performance from previous years. The hospitals basically go “at risk” because their total cost of treatment is always going to be different than the amount they get reimbursed. Unfortunately, many hospitals are electing to “sandbag it” the first year in order to set their benchmark low.

Stick with me for this analogy.

Usain Bolt astonished the world when he broke the 100 meter world record at the 2008 Beijing Olympics while barely breaking a sweat. About 80% through the race, he casually looked up to the crowd, thumped his chest in defiance and crossed the finish line with one shoelace flapping in the wind. There’s no doubt he could have run faster.

What most people don’t know, Nike had previously agreed to pay Bolt a large bonus (up to $500,000 according to some sources) every time he broke a world record. He was given financial incentives not to run his fastest every race. He was better off making slow incremental progress and break the record as many times as possible, which in turn makes spectating the sport more exciting.

In this case, the incentives of Nike and Bolt were aligned. Hospitals, on the other hand, will almost certainly regret this strategy. The first year is a risk-free year, so hospitals should use it as an opportunity to test new programs and initiatives. Sadly, many are doing the opposite.

4. Hospitals should steer post-acute options.

Medicare regulations mandate that patients should have a choice of providers. When hospital representatives discuss post-acute care options with patients, the degree in which the hospital favors a certain provider is considered “steering.” Hospitals usually fall in one of three categories: 1) no steering, 2) soft steering, or 3) hard steering.

While hospital attorneys for years ran scared from any form of patient steering to specific post acute providers, the financial penalties for hospitals who work with sub-par post-acute providers is becoming way too significant.

If the fourth category was “extreme steering,” this is what Josh would recommend, assuming patients were being steered towards the facilities with the strongest quality measures. Simply put, Medicare rules need to be relaxed (or creatively reinterpreted) to give hospitals more say into where patients go for post-acute care, since hospitals are being forced to take on more risk.

Imagine a scenario where you just purchased a $700 iPhone at Apple (analogous to receiving a hip replacement at a hospital). You’re told by the store clerk that you should buy a case to protect your new phone, and you’re staring at a wall of 300 different phone cases from a dozen different manufacturers. At the very least, you as the consumer would appreciate it if they limited the options to one recommended case (Apple brand) and perhaps one other highly-rated case; or they should prominently display the ratings for all the cases on the outside packaging.

People deserve the right to choose, but they should be given ample information to make an informed decision. When it comes to healthcare, no one wants more than a few good options.

5. Hospitals that don’t steer will get steered anyways.

You can lead a horse to water, but you can’t make him drink.

At the Health Evolution Summit in Laguna Beach last month, as part of a fun group exercise, the healthcare executives at the conference voted “disruption” and “innovation” as the top two most hated buzzwords in the entire industry. What a shock — many hospital executives are stubborn and they like things the way they are.

The problem is, most hospitals are relying on post-acute strategies that are growing increasingly problematic every day. Instead of steering at the executive level, many hospitals are deferring the decision to the physician level. By allowing doctors to choose the patient’s discharge destination, patients are being referred to facilities when they could just as easily return home.

Josh calls this the “post-acute merry-go-round” because doctors claim that the overutilization of SNFs reduces liability. But in the age of criteria-based admissions and discharges, that argument doesn’t hold ground. The preferred post-acute partner network has to be established from the top-down.

—————————————

The switch from a predominantly fee-for-service system to value-based reimbursement has turned the traditional model of healthcare reimbursement on its head, causing providers to change the way they bill for care. It’s driving real improvements to the delivery of care and mandating higher quality and better care coordination at a lower cost.

For systems that are efficiently managing care, these programs provide new revenue and cost savings opportunities. But to succeed under these reimbursement methodologies, health systems will require better access to information, higher adoption of technology, more narrow post-acute networks and more aggressive experimentation of new programs.

Follow Kyle Hill on Twitter: www.twitter.com/kaleazy

A feature on Dr. Luke in Beckers Hospital Review:
Dr.Luke’s vision is Geisinger’s reality: Value based care has arrived at healthcare futurists panel

Dr. Josh Luke exploded onto the health system executive conference speaking circuit with passion in 2014 and a provocative message to health system executives “Change or Die”.

This hypothesis was based on his practical experience as both a hospital administrator and family caregiver combined with his knowledge of health policy. The resistance to his message by incumbent system executives was palpable to anyone in the room at the time. As the son of a complex care patient his Mom, through his experience as a former serial hospital administrator, and before that as a post acute facility executive, Josh brings to bear the whole personal and professional perspective from the entire continuum of care with him. Josh is on a mission. You see: America spends far more than any other country on health care. Though our outcomes are below average compared to other developed countries on many key health care quality indicators. U.S. Health care spending outpaces both GDP and inflation growth to boot.

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A feature on Dr. Luke in Future Sharks
From Healthcare CEO to Entrepreneur: The Story of Dr. Luke’s Rise to Entrepreneurship

Dr. Josh Luke is a healthcare futurist and former hospital CEO well known for his humorous and entertaining personal stories that entertain and engage audiences. His expertise includes sharing simple tactics on how to make health care more affordable for your family and employees, as well as how to get access to the best doctors and hospitals.

Dr. Luke started his career as a jet-setting sports marketer working with some of the most famous athletes in the world. Then, after a career change to healthcare brought on by his grandmothers disease process, he ascended to become a hospital CEO by age 32.

After ten years as a hospital CEO, a new owner arrived and Luke was out of a job, had no health insurance for his family, and his mother was subsequently diagnosed with Alzheimer’s Disease. Soon after he penned his first book and became a best-selling author.

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A feature on Dr. Luke on LinkedIn Incredible Disruption

Industry Disruption Edition:

Dr. Josh Luke was the original Healthcare Futurist. You’ll see others claim this title from time to time, but it was audiences and executives that crowned him with this title back in 2012.

Why? Because he spoke the truth. While many executives hide behind the veil of capitalism to ensure bloated salaries keep streaming in, Luke bucked the trend.

While in Canada, our healthcare is paid for by tax dollars, the reality for our neighbors south of the border is a much different story. This is why his story is one of continuous disruption. Disruption in an industry so desperate for change.

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Why Health-Wealth Is So Personal to Me
By Dr. Josh Luke

An Excerpt from the Best Selling New Release from ForbesBooks

In 1998 I was living my dream. I was a newlywed, and I was hanging out at Dodger Stadium almost nightly, as my older brother Matt had made the major leagues and I was handling baseball slugger Mark McGwire’s sports marketing efforts as he chased down Lou Gehrig’s home run record. But then, in 1999, frustration over the lack of communication between my grandmother’s caretakers and the desire to find a career path that would prove more fulfilling launched my journey to a new career in healthcare. I became a healthcare administrator with the goal of putting my own fingerprint on care delivery in America.

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