David P. Lind Benchmark Archives - Page 3 of 4 - Heartland Health Research Institute

Seriously…Cleveland Clinic?

Posted on: 08.20.14 By: David P. Lind

Harvard, Yale, Princeton and Stanford – all are very prestigious universities.

Likewise, the Mayo Clinic, Johns Hopkins and Cleveland Clinic – are all are very prestigious medical facilities, right?

Having a stellar reputation takes years (and generations) to build, whether it’s institutions of higher learning, healthcare organizations or law firms, etc. Being ‘prestigious’ comes with many flattering adjectives like: celebrated, trusted, respected, prominent, great, important, imposing, influential, renowned, and exalted.

The Cleveland Clinic has enjoyed this elevated stature for years. But, unfortunately in healthcare, it may be easier (and cheaper) to ‘buy’ an image of quality than it is to consistently perform quality care practices day in and day out – especially when the image is protected by suppressing information from state and federal authorities regarding safety practices.

Believe it or not, Cleveland Clinic was on a “termination track” with Medicare between 2010 and 2013 (19 total months) for more than a dozen inspections that occurred due to patient complaints. Cleveland Clinic was threatened to lose its almost $1 billion annual Medicare reimbursements – quite a hit, even for a multi-billion dollar organization. After repeated Cleveland Clinic violations, the Centers for Medicare and Medicaid Services (CMS) took the unusual step to personally cite CEO Toby Cosgrove and the Cleveland Clinic Governing Board.

In June, Modern Healthcare reported that retired Air Force Col. David Antoon had accused Cleveland Clinic of withholding documents from federal authorities while the Clinic was being investigated for substituting Antoon’s authorized surgeon with a medical resident that resulted in a gross medical mistake. Mr. Antoon suffered serious disabling injuries resulting in the loss of his job as an airline pilot.

According to this article, and based on my correspondence with Mr. Antoon, the Cleveland Clinic hid important documentation from federal inspectors to avoid responsibility (and liability) for their derelict actions. If this can happen at a prestigious institution, you can be confident that it can happen anywhere.

As mentioned in previous blogs, Rosemary Gibson, senior advisor at The Hastings Center, did a splendid job of explaining in her book, “Wall of Silence,” how the ‘medical industrial complex’ in this country is conspicuously silent when it comes to medical mistakes that kill and injure millions of Americans.

U.S News & World Report recently published the ‘Best Hospitals Rankings’ and placed the Cleveland Clinic in the top position for Urology. In contrast, Healthgrades ranked Cleveland Clinic with the lowest possible score for prostatectomy outcomes; CMS data for Hospital Acquired Conditions (HACs) placed Cleveland Clinic in the bottom 7% of all hospitals with a score of 8.7 (scores ranging from 1- 10, with ten being the worst); and the independent Leapfrog Group gave the first ever “D” grade to Cleveland Clinic for patient safety. WDAF-TV (Kansas City, MO) recently reported that hospitals must pay US News to use the “Best Hospitals” logo in advertising. Many rating organizations charge hospitals to market their grades. So what can the public believe: “pay to play” advertising or independent reviews?

The Cleveland Clinic will continue to pay US News to market itself as evidence that they are a ‘prestigious’ medical organization, and yet quietly sweep the CMS action, and other independent negative reviews, under the rug.

Again, my point is simple. If this happens to the prestigious Cleveland Clinic, it can happen anywhere – and it does. Unfortunately, the Cleveland Clinic story is only the tip of the proverbial medical iceberg. The medical industry is unwilling and, quite frankly, unable to reform itself from within. Because of this reluctance, it is now time for the public to apply transparency measures. Our own lives may depend on it.

As the saying goes: “Fool me once, shame on you. Fool me twice, shame on me.” I think this easily applies to all of us who continue to allow the medical establishment to self-regulate with secrecy – resulting in unnecessary harm to unsuspecting patients.

I’d love to hear your thoughts.

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Voices on Hospitals: Cost Transparency and Keeping Cost Reasonable

Posted on: 08.13.14 By: David P. Lind

In early 2013, I developed an infographic to help ‘mask the complexity’ of our complicated healthcare ‘system.’ The infographic portrays an overview of ‘Our Health Care River’ that illustrates how upstream activity can adversely impact what happens downstream.

We all know the health insurance premiums we pay are nothing more than a derivative of healthcare costs plus administration fees. Employers have spent enormous energy, time and money, downstream trying to ‘fix’ the symptoms of major pollutants found upstream, as depicted in ‘Our Health Care River.’ Major ‘chemicals’ found upstream include a ‘Fragmented Delivery System‘ and ‘Unhealthy Lifestyles.’

Year-after-year, employers tweak their health plans to keep them affordable. They do this by increasing deductibles, out-of-pocket maximums, office and Rx copayments, employee contributions, limiting provider networks, etc. However, we can only do so much downstream because combating just the symptoms of the core problem will only prolong the annual frustrations that we all will continue to face.

Below are the final two performance indicators on hospitals as perceived by employers: ‘Cost Transparency’ and ‘Keeping Cost Reasonable.’

Indicator #11: Cost Transparency

How can patients and payers discern the ‘value of care’ delivered when cost is not commonly known at the time the procedure is being delivered? For ‘value’ to be accurately determined, providers must measure costs at the medical condition level, which requires a true understanding of all the resources used in the patient’s care.

By having this information, the cost of providing care to a patient per episode-of-care can be compared to the outcomes achieved for that particular condition. It must begin with understanding the true cost of care. The transparency of this cost to the public is crucial.

Statewide, Iowa employers rated hospitals a score of 5.8 on a 10-point scale. In other words, employers gave hospitals an un-weighted ‘D+’ on cost transparency. When segmented into five regions using size-weighted scores, three regions ‘fail’ while the southwest region (5.1 score) was a whisker away from failing. Only the northwest region was safely graded above failing, grading in at a ‘mid-D.’

Indicator #12: Keeping Cost Reasonable

Our 12th indicator – ‘Keeping Cost Reasonable’ – is a cousin to ‘Cost Transparency.’ This indicator is extremely frustrating to Iowa employers and earned the lowest grade when compared to the other 11 performance indicators. Increasing value requires either improving the outcomes without raising costs or lowering costs without compromising outcomes. From our past 15 years of research, Iowa employers have seen health insurance premiums increase by 171 percent for single coverage and 158 percent for family – clearly an unsustainable pace.

Statewide, Iowa hospitals received an abysmal score of 5.1, or a grade of ‘D-minus’ for their efforts on keeping costs reasonable. When segmented into five regions using size-weighted scores, four regions ‘fail’ while only the northwest region received a ‘mid-D’ grade. Polk County hospitals received an extremely low score of 3.4, based on 144 employers within that county.

Within their respective communities, employers must lead the discussion about healthcare ‘value’ – for one major reason: they own the problem. The path that we are all on is unsustainable AND unacceptable. Unilaterally, providers are unable to develop ‘solutions’ to the cost problem. Employers must be part of the solution by moving upstream to help find approaches to prevent the harmful ‘chemicals’ from polluting ‘Our Health Care River.’

To learn more, we invite you to download our free white paper: ‘Voices for Value: Iowa Employer Perceptions of the Iowa Healthcare Provider Community.’ This document provides a comprehensive overview on our current status and establishes a baseline in which to measure future changes made in Iowa’s healthcare system.

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Voices on Hospitals: Efficiency and Coordination of Care among Providers

Posted on: 07.30.14 By: David P. Lind

Evidence remains strong that the U.S. healthcare ‘system’ is not efficient. In fact, according to the Institute of Medicine, about one-third of the $2.6 trillion spent on healthcare in the U.S. in 2010 was identified as being wasteful and inefficient.

In healthcare, cost and quality do not correlate with one another. Some lower-cost physicians (and hospitals) can produce high-quality care, while some high-cost health providers produce low-quality care. As stated in our ‘Voices for Value’ white paper, rewarding and making transparent cost, quality and safety measures will lead to improved efficiency without adversely affecting quality.

Indicator #8: Efficiency

When assessing the efficiencies of hospitals within their communities, Iowa employers give statewide hospitals an un-weighted score of 6.5, or a grade of ‘C.’ When segmented into five regions using size-weighted scores, four regions received ‘D’ grades, while the northwest region received a ‘mid-C’ grade.

Indicator #9: Coordination of Care among Providers

If there is one performance indicator that can be very frustrating to patients, care coordination among providers might be the one most widely criticized.

According to the Agency for Healthcare Research and Quality (AHRQ):
“Care coordination involves deliberately organizing patient care activities and sharing information among all of the participants concerned with a patient’s care to achieve safer and more effective care. This means that the patient’s needs and preferences are known ahead of time and communicated at the right time to the right people, and that this information is used to provide safe, appropriate, and effective care to the patient.”

Within the five Iowa regions, employers view ‘coordination of care’ efforts similar to ‘efficiency’ standards – in other words, no ringing endorsements from employers. Employers give statewide hospitals an un-weighted score of 6.4, or a grade of ‘C.’ When segmented into five regions using size-weighted scores, the northwest region scored a ‘mid-C’ while the other regions received ‘Ds.’

Interestingly, hospitals in Polk County received a failing grade (‘F’) when graded by 144 Iowa employers within that county. Needless to say, key hospitals in Polk County have plenty of room for improvement in this category.

When Iowa employers experience annual premium increases that exceed the overall inflation rate, it is reasonable to expect health outcomes delivered to be at least commensurate with the inflated premiums they pay. Achieving high value for patients must become the overarching goal of our healthcare delivery system, with value simply being defined as “the health outcomes achieved per dollar spent.”

Without question, Iowa employers do not believe they are receiving top value healthcare for what they are expected to pay.

Next week, we will review how Iowa employers graded hospitals on ‘Transparency in Medical Outcomes’ – performance indicator #10 in our “Voices on Hospital” series.

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Voices on Hospitals: Ability to Engage Patients and Focus on Wellness & Health Promotion

Posted on: 07.23.14 By: David P. Lind

Statistics continue to show that patients who are actively involved in their own health and healthcare achieve better outcomes and have lower health costs than those patients who are not actively engaged.

Being able to engage patients and provide wellness offerings presents a big challenge for healthcare providers. Since engagement is really about improving understanding, communication, delivery, consumption, retention and compliance, it becomes the responsibility of – everyone involved in the individual’s well-being – the patient and his or her healthcare provider.

Indicator #6: Ability to Engage Patients

‘Ability to Engage Patients’ is our sixth performance indicator. Overall, Iowa employers give statewide hospitals an un-weighted score of 6.7, or a grade of ‘C’ when assessing their ability to engage patients. When segmented into five regions using size-weighted scores, four regions received ‘D’ grades, with the southeast region scoring lowest at 5.3. The northwest region received a ‘C’ grade, outpacing the other four regions within Iowa.

Indicator #7: Focus on Wellness & Health Promotion

A major trend within the employer community, both in Iowa and nationally, is workplace health and wellness promotion. Having a healthy and productive workforce requires a renewed focus to ensure a supportive environment for the safety, physical and mental well-being of employees and family members.

The Affordable Care Act (ACA) is directing hospitals to focus on getting and keeping people well or face serious financial penalties. As a result, hospitals must look to expand the continuum of care in the future, which includes developing and maintaining wellness offerings within their communities.

Similar to ‘engaging patients,’ Iowa employers have graded statewide hospitals an identical grade of ‘C’ for this seventh performance indicator. When looking at the five regions, the map below is virtually a mirror of the map above. Despite the burgeoning wellness trend in Iowa, employers feel hospitals are falling short in providing them this important resource.

Being able to engage patients to be more active in their health and offering wellness resources go hand-in-hand. These two latest performance indicators reveal that improvements are, indeed, necessary. They can help hospitals identify new opportunities to provide valuable resources to community populations.

As we continue our “Voices on Hospitals” series, next week we’ll review our ‘Efficiency’ and ‘Coordination of Care’ performance indicators.

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Voices on Hospitals: ‘Trust’

Posted on: 07.09.14 By: David P. Lind

Regardless of the role we serve – whether personally or professionally – the ‘trust’ factor is critical. In business, trust must be earned. It’s the power-brand that represents the DNA of any organization.

However, I’m not so certain that it’s occurring in our current healthcare ‘system.’

In healthcare, many times trust is blindly given when it is not warranted. To better illustrate this point, the Des Moines Register recently published a story, “Ex-staffer: Risk to 2 patients hidden.”

The story is about Robert Burgin, an infection-control specialist for Mercy Hospital in Council Bluffs. Mr. Burgin resigned his position because his employer was unwilling to tell the truth to patients whose health may have been compromised due to medical mistakes. Based on this article, I commend Mr. Burgin for holding firm with his beliefs that patient safety is paramount.

Secrecy in healthcare hasn’t changed much in 15 years since the Institute of Medicine’s ‘To Err is Human’ book was published. The practice of health providers suppressing similar stories from public knowledge is reprehensible. As patients, we trust our providers to do the right thing, regardless of the circumstances involved. Medical organizations that are sincere about pursuing and maintaining an enduring culture of trust should establish initiatives to emotionally connect with their patients to perpetuate that trust.

Indicator #5: Trusting our Hospitals
‘Trusting our Hospitals’ is our fifth performance indicator. Overall, Iowa employers give statewide hospitals an un-weighted score of 7.2, or a grade of ‘B-.’ When segmented into five regions using size-weighted scores, four regions received a ‘mid-to-high C’ grade while the northwest region graded at a ‘B-.’ Keep in mind, these are ‘average’ scores/grades — some hospitals have better-than-average grades, while others have below-average grades.

Going forward, Iowa hospitals must address whether or not having mid-level grades on ‘trust’ are acceptable. Since competition can be fierce within certain markets, low trust in a particular hospital can adversely impact hospital revenue over time.

Hospitals may advertise their quality – perhaps a national publication has included them in one of their quality rankings. But merely telling the public they provide quality is far different from consistently demonstrating this over the long term.

Given the pressure that Mr. Burgin was under to keep this information hidden, he should be recognized for his courageous intent on maintaining the public’s trust. Why not create a special award for those who demonstrate this selfless quality? We could call it “Profiles in Health Care Safety Courage,” to promote similar actions by other health care workers. I would like to think that this on-going award would be recognized by the media and others who want to help promote the ‘trust’ factor in healthcare. It’s certainly something to think about and I welcome any ideas you may have on this topic.

Trust should NOT be something we randomly give away. It is one performance indicator that can be greatly improved through a systematic and transparent approach. Isn’t it time to do so?

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Voices on Hospitals: Electronic Health Records and Consistent Quality of Care

Posted on: 07.02.14 By: David P. Lind

We have often heard the phrase, “Perception is reality.” Although this phrase may not be entirely true, perception is important because it happens when we use our senses, such as sight, taste, sound, touch and smell. In short, our perception is both pure and objective.

However, our interpretation of our perceptions — also known as ‘perspective’ — invites both experience and emotions, which can be more subjective and unique, and, therefore, more about opinion. I suppose perception is reality IF we exclude interpretation of our experiences and emotions.

My point is this: Opinions are important and certainly do matter!

This week, we continue to address how Iowa employers perceive hospitals within their communities on two new performance indicators:

Electronic Health Records (EHRs)
Consistent Quality of Care

Indicator #3: Electronic Health Records
As indicated in our ‘Voices for Value’ white paper, electronic health records (EHRs) are designed to accurately capture data on the patient at all times. This allows providers to view the patient’s entire medical history without the need to track down the patient’s previous medical record, and to ensure the data is accurate, appropriate and legible. Using one modifiable file, it is widely believed that patient EHRs will help make the healthcare delivery process more efficient with fewer medical errors.

Using a 10-point scale, (1 is ‘failing’ and 10 is ‘excellent’), Iowa employers rated statewide hospitals a 6.9 regarding the use of EHRs. Converting this score to a grade, the overall statewide grade for this indicator is a ‘C+.’

However, when rating employers on a regional basis using size-weights (size-weighting is discussed in my June 25th blog), only the northwest region received an acceptable grade of a ‘mid-level C.’ All other regions, grade in around the ‘mid-D’ range.

Indicator #4: Consistent Quality of Care
Quality of care that is consistently applied, regardless of provider and location, is really the end-game for all of us, right? Let’s be brutally honest, we pay world-class prices for the care we seek, so quality of care should be our minimum expectation.

Yet, Iowa employers are clearly dubious about receiving consistent quality of care. As with all three previous performance indicators, the northwest region received the highest score/grade compared to the other regions within the state, while the northeast region barely secured the yellow ‘C’ grade.

Thus far, after reviewing four of the 12 performance indicators, the northwest region has been consistently outperforming the other four regions. Are hospitals in the northwest region of Iowa embracing slightly different approaches that appear to be resonating more positively with employers in their communities?

I have many questions, but it is too premature to speculate. For now, we will rely on the perceptions, perspectives and opinions of the Iowa employer.

Next week: “Trust”

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Voices on Hospitals: Access and Patient Satisfaction

Posted on: 06.25.14 By: David P. Lind

Before I continue my discussion on employer perceptions of Iowa hospitals, I would like to react to a Commonwealth Fund report “Mirror, Mirror on the Wall, 2014 Update: How the U.S. Health Care System Compares Internationally” published on June 16th.

It is a fact that we pay for world-class healthcare in the U.S. No one can honestly dispute this. Yet, there’s a major gap in what we pay for healthcare versus the outcomes we receive — commonly known as ‘value.’

When we compare our expensive healthcare system to 10 other major industrialized countries, as the Commonwealth Fund recently did, the U.S. ranks dead last in the quality of its healthcare system. As we already know, we spend far more than any other country on healthcare (per capita), and yet the Commonwealth Fund reports “…further findings indicate that from the patients’ perspective, and based on outcome indicators, the performance of American health care is severely lacking.” In fairness to U.S. healthcare providers, this report factors in other criteria that does not directly relate to provider performance here in the U.S., such as our troublesome access to insurance coverage and equity issues.

This report is like fingernails on a chalkboard — for one key reason. In Iowa, we continue to compare our health outcomes ‘progress’ to other states, rather than with our international counterparts. I understand it is more convenient to compare Iowa metrics with comparable metrics from other states, after all, each state operates under the same federal healthcare ‘system’. But let’s be honest, it is very easy to be selective on which metrics to use when comparing the progress of our outcomes with other states. Aren’t we merely comparing Iowa to other under-achieving benchmarks?

It’s really about our expectations, right?

Since we are paying world-class prices for our healthcare, then we need to proactively compare our outcomes to…well, the world. Incrementally making progress comparisons to other states only serves to prolong our inevitable desire to produce world-class outcomes. With the risk of sounding naïve about this subject, I am convinced Iowa can and should take the lead by being the petri-dish for world-class care. But to do so, we must ‘think’ world-class and, consequently, use the appropriate benchmarks to get us there.

There, I said it. Now, shoot me.

As previously mentioned, future blogs will address how Iowa employers view hospitals on 12 different ‘indicators’ across five Iowa regions. Today’s topic addresses employer perceptions on hospitals regarding “Access to Services” and hospitals’ “Concern for Patient Satisfaction.”

Employer perceptions about our hospitals can be interpreted as unique perspectives coming from key stakeholders who have much to gain (or lose) from the local care that is provided to their workforce.

The five arbitrarily-carved regions in Iowa consist of the following number of counties (99 total counties):

Central – 9 counties
Northwest – 27 counties
Northeast – 25 counties
Southwest – 17 counties
Southeast – 21 counties

Indicator #1: Access to Hospital Services
Using a 10-point scale, (1 is ‘failing’ and 10 is ‘excellent’), Iowa employers rated statewide hospitals a 7.3 regarding having access to their services. When converting this score to a grade, the overall statewide grade for this indicator is a ‘B.’ (See NOTE below.)

The following map shows little measurable difference between the five regions for this indicator. The northwest region has the highest average of 6.9, while central Iowa follows at 6.6. When applying weights to the regions, many regions actually grade at a mid-to-high ‘C.’ If you have not reviewed our ‘Voices for Value’ white paper, it is available for download. ‘Voices’ briefly addresses this particular subject on pages 14 & 15.

Indicator #2: Concern for Patient Satisfaction
Overall, employers give statewide hospitals a score of 6.9, or ‘C+.’ However, when we look at the five regions under this indicator, it becomes more interesting. Employers in the northwest region clearly feel their hospitals have more empathy for patient satisfaction, grading hospitals at a low ‘B.’ The northeast and central regions grade their hospitals at a low ‘C,’ while both the southeast and southwest lag behind equally at high ‘Ds.’ Our ‘Voices’ white paper discusses this topic on pages 15 & 16.

Former Massachusetts Congressman Tip O’Neill frequently stated “All politics is local.” As you will see in upcoming blogs, employer perceptions on Iowa hospitals vary greatly based on location. So we might say that “All healthcare is local.”

Local problems can be addressed with local solutions, to a great extent, but only if we have appropriate expectations of the desired outcomes we wish to seek.

Next week: “Electronic Health Records” and “Consistent Quality of Care.”

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NOTE: When grading the entire state, it is important to distinguish that employer respondents were not weighted, which means all employers (regardless of size) have an equal voice. However, when we break out the five Iowa regions, the results are size-weighted so that organizations with more employees have a louder “voice.” Because each region is size-weighted, the average regional scores will appear lower than the statewide average score, in this case, 7.3. Sorry to get technical, but I wanted to address why the statewide averages do not exactly jive with regional averages. If we dig deeper by county, the map becomes very colorful because not all counties are alike, since not all hospitals are alike.

16 Candles

Posted on: 04.30.14 By: David P. Lind

We have just launched our annual Iowa Employer Benefits Study©. As with all previous studies, I’m looking forward to this year’s survey for the following important reasons:

• This will be the 16th Study conducted since we started this particular survey in 1999. Though I would never compare this ‘baby’ to my two beautiful daughters, it sure has evolved considerably since inception!

• Two new modules of questions will be added in this year’s survey.

1. Affordable Care Act (ACA) – This module will address whether Iowa employers are using healthcare exchanges (marketplaces) — either public or private. If not, we’ll determine whether they plan to offer health coverage through some type of marketplace in the future. We will also find out whether employers are using a Defined Contribution approach for health coverage or offering it as part of a cafeteria plan.

Along with many other ACA-related questions, we will learn whether employers plan to:

Add a spousal surcharge
Require an employee’s spouse to get coverage through their own employer
Adopt a value-based insurance design for health coverage
Offer tiered-provider networks to promote high-value providers
Eliminate health coverage for all employees
Eliminate health coverage for part-time employees
Institute a wellness program
Add wellness rewards or penalties

2. In our 2013 Study, we asked Iowa employers to rate hospitals and physicians on 11 performance indicators using a 10-point scale. In addition, employers were asked to rate how much they ‘trust’ hospitals and physicians. In this year’s survey, we are going one step further. We are inviting employers to rate which of the 12 performance indicators are most important to them. From this, we will prioritize which of the 12 indicators are most important from the employer perspective.

As with the past 15 Studies, we will continue to ask our core questions about the benefit components being offered by Iowa employers. New information gained from this survey will be reflected in our Lindex Online Iowa Benefits Benchmarking tool. The 2014 results should be available in late August/early September. As always, our intent is to keep our annual Study both fresh and relevant within the changing world of employee benefits.

If your organization is randomly selected to participate in this year’s Study, we highly encourage you to share in our celebration by participating in this important survey.

I always take great delight in adding yet another candle to our cake!

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Grading Iowa Hospitals and Physicians – A ‘Silent Voice’ No More

Posted on: 04.18.14 By: David P. Lind

Today, we issued our press release on the Iowa Employer Perceptions of the Iowa Healthcare Provider Community. The results come from our 15th annual Iowa Employer Benefits Study©. This section of the study reveals compelling information that is both fascinating and relevant to Iowa employers – and to the entire state of Iowa. This type of study is a first of its kind in Iowa – perhaps in the country!

We’ve also just released our “Voices for Value” white paper which provides a comprehensive look at Iowa employer perceptions of the Iowa healthcare marketplace. I am very proud that the Iowa Association of Business and Industry (ABI) is the sole sponsor of this paper, as they have represented the “Voice of Iowa Business Since 1903.”

For the last 30 years, I have been keenly involved with employer-sponsored health insurance in Iowa. During most of that time, I assisted employers with evaluating and obtaining health coverage on behalf of their employees. As employers know, the complexities of health insurance requires a great deal of their time and effort each year to assure the ‘appropriate’ health coverage offering to their employees. This is an often-overlooked cost that is not factored into the health premiums paid by employers. Nonetheless, it is a necessary process that requires frequent employer attention.

Year-after-year, our annual studies indicate that Iowa employers continue to receive premium increases that exceed the inflation rate. In fact, since 1999, the annual Iowa single premium increased by 171 percent while the family premium increased by 158%. Despite these meteoric increases, Iowa employers continue to pay more than their ‘fair share’ of the premium costs – about 80 percent of the total single premium and about two-thirds of the family premium.

So why ask Iowa employers to assess hospitals and physicians within their communities? It’s quite simple. Employers play an enormous and critical role in funding the private insurance system. Unfortunately, when assessing the value received from the healthcare providers, they have been a relatively silent and diluted voice on how this investment is being used.

A silent voice? Yes, but no longer.

Iowa employers were asked on a 10-point scale, where 1 is “failing” and 10 is “excellent,” to assess 11 key performance measures. Employers reported that both hospitals and physicians within their communities are either ‘average’ or ‘below average’ on most measurements. However, two measurements that are most worrisome to employers, resulting in dismally low grades, are “Keeping Cost Reasonable” and “Cost Transparency.” Iowa employers feel that hospitals are a grade away from failing on both measurements, as they received grades of D-minus and D-plus respectively. Physicians were graded slightly better at D and C-minus, respectively. Based on the escalating premiums employers continue to pay each year, it is not surprising that employers are in a foul mood on cost issues.

Trusting Hospitals and Physicians

One last assessment measurement is the “Level of Trust” employers have with hospitals and physicians within their communities. Specifically in healthcare, trust is perhaps the most important measurement used to gauge the effectiveness of the services provided to the population. In this measurement, hospitals received a tepid B-minus from employers, while physicians received a mid-B.

The other grades given to hospitals and physicians are considered to be underperforming, particularly relating to measurements on patient care and the perceived outcomes received from patient care. More about these grades in later blogs.

One final comment regarding how employers graded their health providers. When asked to evaluate health providers, employer assessments come from ‘perceived’ attitudes about the various measurements being asked within the survey. Clearly, we need to know a great deal more on how our healthcare providers can meet the expectations of a key healthcare payer – the employer.

This particular survey provides a solid baseline on employer perceptions. Based on these results, future healthcare provider community assessments will be required.

I invite your comments regarding the grades employers assigned to both hospitals and physicians.

To learn more about this and other survey results, we invite you to subscribe to our blog.

Healthcare Waste & Inefficiency – an Inconvenient Truth?

Posted on: 03.19.14 By: David P. Lind

The Iowa House and Senate leaders recently announced a joint budget agreement on spending levels for the state of Iowa’s 2015 fiscal year, which begins July 1, 2014. The budget target agreed upon? $6.97 billion – a great deal of money, for sure.

This amount, however, pales in comparison to the net worth of some of the billionaires around the world. For example, when compared to Forbes‘ latest list of the world’s billionaires, the announced 2015 Iowa budget would fall somewhere between #191 and #196 of the most wealthy people on the list. Bill Gates sits atop at $76 billion while Warren Buffett weighs in at the #4 position, with a ‘pithy’ net worth of $58.2 billion.

In short, Bill Gates’ net worth is 11 times greater than Iowa’s annual state budget. A fun fact to recite at tonight’s dinner table, right?

Try this not-so-fun fact: According to a 2010 report from Institute of Medicine (IOM), the U.S. healthcare system wastes about one-third of the $2.6 trillion we all spend on healthcare. This equates to about $765 billion wasted annually — and growing!

According to IOM, the six areas of waste and inefficiency are:

Missed Prevention Opportunities – $55 Billion
Unnecessary Services – $210 Billion
Inefficiently Delivered Services – $130 Billion
Prices that are Too High – $105 Billion
Excess Administrative Cost – $190 Billion
Fraud – $75 Billion

Based on these stats, one might reason that our health insurance premiums are about a third higher than they should be. No wonder our health premiums continue to increase more than the consumer price index, year-after-year! Let’s be honest, merely tweaking our insurance plans (by increasing deductibles, copayments, offering limited-provider networks, implementing value-based benefit plans, etc.) will NOT remotely make up the difference that we lose in annual waste.

It is about time that we confront this ‘inconvenient truth’ (thank you, Al Gore) and think differently about truly reforming our healthcare system.

To put the $765 billion of healthcare waste and inefficiency into context with other budgeted costs, consider the following:

The proposed 2015 budget for the Department of Defense is $549 billion.
The president’s 2015 budget proposal would run a deficit of $561 billion.
The proposed 2015 budget for Education is $1.014 trillion.
As mentioned earlier, the 2015 State of Iowa fiscal year budget is $6.97 billion. That puts national healthcare waste about 110 times greater than Iowa’s state budget EACH YEAR!

So, the next time you wonder why your health insurance premiums and out-of-pocket healthcare costs are so high, you might remind yourself that we currently live with a VERY wasteful healthcare system that is in desperate need of an efficient and high-value care transformation.

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