"Why should I care?"That was the question that urologist Blake Hamilton, M.D., shot back at a hospital administrator who had approached him about a cost–saving idea."It's not my hospital."
Admittedly blunt, Hamilton's reaction echoes what many physicians at academic medical centers feel about proposed cost–saving measures. Doctors have fiercely guarded against the reach of business interests into the decision–making realm of patient care. Plus, they've had no financial incentive to save the system money. At the time, Hamilton saw nothing in it for him or his patients.
Over the past seven years, he's undergone a complete transformation from being uncommitted to becoming medical director of the Urology Center, a member of a profit–sharing committee that rewards physicians for cost-saving ideas (see page 26), and excited about spending the rest of his career here. "I'm pretty much all in," he says.
What prompted the change? It was the director of surgical services, Kathy Adamson, R.N., who set the wheels in motion. She told him he was a "terrific, bright surgeon" and encouraged him to join a risk–management task force. The idea wasn't appealing–"junior faculty don't want to be involved in the business of medicine"–but he was flattered. Then he received a follow–up invitation from the one person who always has your attention–the department chair. "The next thing you know, they were asking me to run a few things."
The more involved Hamilton became in the institution, the more he felt the institution's commitment to him. In short, he began to care. Now Hamilton wants to engender that kind of loyalty and engagement in his junior faculty by showing them early on that both he, and the institution, are invested in them. "If you position your institution as one on the move–as a model for the country–young physicians won't want to let go of it. And once you make a longterm commitment, then you want it to be good."
A CFO'S PERSPECTIVE
Gordon Crabtree didn't know much about health care when he became the CFO of University of utah hospitals and clinics ten years a go.Health care pricing was like a foreign language to him, and the world of Medicaid a sort of dangerous foreign land.
But Crabtree knew plenty about business and politics, which he quickly realized would serve him well in an environment that had so many competing interests. First order of business was to prove to the physician group that he was genuinely interested in developing a win–win relationship. Serendipitously, a flier landed on his desk for a Medicaid 101 meeting in Chicago. He returned from the four–hour meeting with a list of 25 action items that would annually enhance faculty revenues by $10 million and hospital revenues by $45 million. "Keep the money," Crabtree told the executive director of the physician practice group. "Just give me the credit."
That paved the way for Crabtree to begin making some fundamental changes: to create a culture of financial transparency and to "preach the unified gospel," as he puts it–converting people to the idea that there weren't different buckets of hospital revenue and corresponding margin for each specialty or patient care unit. There was only one bucket, which was for the entire system. And that money needed to be allocated strategically to support all of the missions of an academic medical center.
When CEO David Entwistle arrived five years later, he pushed Crabtree's ideas even further and revamped the most contentious and least transparent financial process–the transfers made from the clinical enterprise to the academic departments. Instead of meeting with individual chairs privately, Entwistle and Crabtree invited all of the chairs to decide how to allocate that single profit margin, shifting the full responsibility of making those hard decisions to them. "We use a formula to determine how much money there is to spend, and then they prioritize how to do it," says Crabtree. "Once they realize it's a zero–sum game, they come to an agreement about what the community really needs."
THE IDEA: CREATE PROFIT–SHARING OPPORTUNITIES FOR PHYSICIANS
No one is in a better position to figure out how to provide higher quality care at a lower cost than physicians.But how do you shift the mind–set so that they consider financial stewardship a fundamental part of their job description?One way is to have them share in the profits
The University of Utah Health Care Partners Program (UHPP) is designed to have the clinical enterprise award the academic department 50 percent of the annualized savings for any cost–saving idea its faculty members implement. The department can use the one–time money for anything except salaries–including funding research projects and purchasing new equipment and supplies. "It's the hospital saying, ‘We want to partner with you; we want to share these savings with you,’" says Quinn McKenna, M.H.A., chief operating officer of University of Utah Hospitals and Clinics.
Critical to UHPP's success has been the hospital's investment in the people, process and technology necessary to generate and openly share meaningful and reliable data. When physicians trust the data, they're more willing to scrutinize their practice patterns and determine how they–not administrators or analysts–can best improve the value of care they–re providing. "Physicians are scientists. If you give them good information, they'll make good decisions. If you give them bad information, they'll know it," says Jann Lefler, M.B.A., director of Financial Planning and Decision Support at University of Utah Hospitals and Clinics.
According to McKenna, UHPP is creating a new dialogue between physicians and administrators and shifting the culture dramatically. "Now we have everyone around the same table; everyone's involved in the conversation," says McKenna. "We have no intention of stepping back. We want to be part of the national solution to improve the value of health care."
Case Studies
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When faced with an opportunity to s ave hundreds of thousands of dollars a year and help reduce the emission of greenhouse gases, the decision is pretty easy. The trick, however, is finding those opportunities and then acting on them....
When nsqip data showed that the laparoscopic colectomy length of stay for our patients was among the longest in the nation, colon and rectal surgeon Bradford Sklow, M.D., rallied two of his surgeon colleagues to figure out how to turn that data around....
