Page 23 - Modern Healthcare (January 2020)

alternative payment models as an example. The checkbook estimates $49.7 billion to
$82.9 billion annually in savings by extrapolating the experience at MemorialCare with
alternative payment models.
“The savings projections they use for alternative payment models, for example, have
Drivers
not been seen in any current” alternative payment models, she said.
to reduce
Macfie said the figures in the checkbook aren’t meant to be optimistic but conserva-
tive. “We weren’t trying to go big, that’s why we had ranges,” she said. “In the beginning
waste
(of the checkbook) it says these are all estimates. Until you start saving, it’s a prediction.”
Health system executives who are participating in the alliance like its broad approach
n Reduce harm and
to waste, saying that’s needed to tackle the problem.
safety events
Waste “is not just one thing. It’s clinical variation; it’s operational waste,” said Cara
n Reduce operational
Hull, chief quality officer at HealthPartners, an IHI alliance member. “I think some-
workplace waste
times the word waste has been difficult for people to accept. Calling it waste but having
n Reduce clinical
such a broad scope is very helpful. It encompasses all of the things we are looking at in
terms of total cost of care and accountability and the Triple Aim.” variation waste
Hull and her colleague Kelly Logue, senior director of care affordability, went through n Actively solicit
the checklist from IHI and found other areas they could focus on such as waste tied to ideas for reducing
waste from staff
billing systems. Logue said she doesn’t think HealthPartners has too much adminis- and clinicians
trative waste, but it’s an area they’ll be focusing on more closely for opportunities to
improve. A recent JAMA study found administrative services was the main culprit of n Involve patients
in identifying what
waste, but there wasn’t much understanding of how to address it. matters to them
Insurers’ role n Redesign care
to achieve the
Health plans also have a role to play in waste reduction, although some of their tac- Triple Aim of better
tics have been controversial. care, better health
Humana declined an interview request, but the organization has been involved in and lower cost
some of the IHI alliance’s resources on waste. Dr. William Shrank, Humana’s chief med- n Engage leadership
ical officer, also was an author of the recent JAMA study on waste. to provide ongoing
Long Beach, Calif.-based Scan Health Plan got involved in the IHI Leadership Alli- sponsorship
ance because its partners MemorialCare and Providence were part of it. “It made sense
for us to do it together so we could impact the whole healthcare ecosystem,” said Dr.
Romilla Batra, chief medical officer of the insurer.
Scan Health already tries to cut waste by holding meetings and conferences with
provider partners to discuss practices that have led to lower spending and improved
outcomes. Batra said presenters at the meetings include C-suite leaders.
The alliance wants more health plan members to get involved. “The members see and
IHI sees an opportunity to partner with payers as they are a key piece of the flow of money”
in healthcare, Duncan said.
Next steps
Although alliance members are embracing the focus on waste, Macfie said the goal is
for the message to spread so all healthcare organizations are doing this work. She said
the alliance is working on getting a grant focused on bringing more organizations to
share what’s working and what isn’t. “The only way we can get at waste is for everyone or
nearly everyone to get on board,” Leo said.
All alliance materials are also public so health systems that aren’t members can access
them easily.
One barrier to more participation could be the still-widespread fee-for-service model
that doesn’t directly give incentives for reducing waste. But health system alliance mem-
bers argue that the status quo is changing even under the current payment structure,
pointing to shrinking reimbursement and implementation of programs that ding them for
their performance.
The incentive to reduce waste “might not come straight from fee-for-service, it comes
from these programs that penalize you for your non-value activity and your fee-for-ser-
vice payment ultimately gets reduced,” said Jim Dietsche, chief operating and financial
officer of Green Bay, Wis.-based Bellin Health system. “Organizations that are still in
fee-for-service have to look at managing waste and variation because their payments
are being reduced.” l
January 27, 2020 | Modern Healthcare 21