July 25, 2016

Data science and hospital value based purchasing has us excited for healthcare, here’s why you should be too

Sheila Talton

Doctors talking around a laptop

One doctor explains to another, lab results confirm: The glass is actually not half empty

America’s health care system is neither healthy, caring, nor a system
Walter Cronkite, 1993

You may have missed it, but at this very moment, the innovations sweeping across healthcare offer much to be excited for. Yes, the hyperbole surrounding our broken healthcare system is legitimate. But somewhere between the usual echo chambers in Washington and your local coffee shop — we’re experiencing significant progress within healthcare. And despite what you’ve heard, we now have reason to be optimistic.

Why? Just this week we learned many diseases are declining, rates of age-related illnesses are dropping, and doctors aren’t even sure why.

The fact of the matter is, on the whole, our quality of life has never been better.

While many challenges lie ahead, modern healthcare delivery and administration is turning the corner.

. . .

A May report in the British Medical Journal (BMJ) sparked a firestorm by estimating 250,000 Americans die each year due to medical errors¸ making them the third leading cause of death in the U.S.

It made for great headlines, but masked a bigger problem: Managing today’s health system complexity and communicating scientific (medical) information is a serious challenge, and we’re not doing very well.

Ashish K. Jha, M.D., director of Harvard’s Global Health Institute, recently shared story of a patient he’d cared for who was admitted for pneumonia, put on standard antibiotics, but died 72 hours later. Jha learned days later — after contacting the patient’s daughter — that a different hospital had run labs on this patient two months prior, and discovered his pneumonia was caused by a rare strain of bacterium susceptible to just a few antibiotics, none of which had been administered by Jha’s team.

The previous hospital was on a different electronic health records system. So the admitting physician didn’t know the patient had been treated for pneumonia prior. Which begs the question — Was Dr. Jha’s patient’s death a medical error?

Dr. Jha points out, while individuals make lethal mistakes, the main reason for preventable medical mistakes is due to a health care system inadequate to the complexities of modern medicine. Basically, as simple as it may seem, vital systems simply do not talk to one another. And labeling preventable, yet needless deaths as “errors” is more a matter of convenience than actual gaps in systematic medical treatment.

According to Dr. Jha, the system failed him. “A system designed for complexity would have alerted us that he had gotten care at another institution. It would have allowed us to look up the microbiology results, even in the middle of the night, so we could have made a better antibiotic choice up front — a choice that was customized to him, not to the generic patient.”

These examples bring together several of the biggest problems in healthcare today.

Daily, our system grows in complexity, yet two lingering issues remain unresolved.

1. We lack common definitions

(what is a medical error, what is cost, or value), which amounts to communication.


2. We lack information

Technically, we’re awash in information, just starved for meaning. This boils down to systems not sharing information (interoperability).

 . . .

In his book A Farewell to Alms: A Brief Economic History of the World, historian Gregory Clark demonstrates the typical peasant experienced an even lower standard of living than did his hunter-gatherer ancestors, despite having worked harder. The critical standard of living turning point only surfaced in the past few centuries with the emergence of two new and powerful systems of social institutions: the modern market economy and modern science.

How does this fit in healthcare, and why are we so optimistic?

It’s not as complicated as it sounds. The modern market economy and modern science both rely on a decentralized process of experimentation and feedback, or in plain English, it is what’s become known as the scientific method on one hand. And entrepreneurial risk and return, competitive enterprise and a profit-and-loss system in the other. Both methods utilize quantitative reasoning, driven by evolving degrees of analytical sophistication and rigor.

Until only recently, both of these massive principles have largely skipped the administration of healthcare. That’s all changing with the digitization of healthcare and the expansion of Electronic Health Records. Finally, through new and evolving methods of data analytics, we can apply these powerful market and scientific principles to healthcare.

How? Through a new digital foundation enable by EHR, we can use data science and analytics to generate ideas, insights, and solutions unimaginable even five years ago.

Data analytics is quickly expanding our capabilities through a scientific approach to data driven insights, managerial science and organizational culture.

Technology and modern data science facilitates communication.

Research by athenahealth’s Leadership Forum identifies communication as the most important skill for healthcare management.

Despite an elusive economic payoff to technologyerror rates in electronic health records out numbering paper records, and doctors ignoring electronic alerts, because, well they’re overwhelmed by them, research shows investments in healthcare IT does produce value.

According to a detailed McKinsey analysis of the HIMSS Value Suite database, gaps in productivity and efficiency measurement, user satisfaction and return on investment attribution must be addresses before the value from healthcare IT can be fully understood and maximized.

To date, fragmented approaches to data management, competing priorities, poorly defined governance and lack of buy-in from end users has slowed technology and data analytics return on investment. However, data driven insights only now available through big data and data science is helping us uncover and appreciate the tangible benefits to further investment in IT.

Greater emphasis in scientific methods, particularly around data science, simply cannot be overlooked. In many ways, science is expanding our ignorance. Every time we use science to answer one question, invariably we stubble upon even more questions. So while science is increasing our knowledge, it’s increasing our ignorance even faster. To slow our “ignorance”, modern data management and analytics principles are now beginning to catch up with the potential underlying big data.

This leaves us all much to be optimistic about. We used science when transitioning from an agrarian to industrial based economy, this continues today as our knowledge economy continues to take shape.

The digital transformation within healthcare is substantial and in many ways it’s a giant IT project. But on a deeper level, as data increasingly flows from silos to unified platforms, we’re seeing digital transformations are an organization wide process, making communication and collaboration arguably the most important drivers of success.

Value Based Purchasing is moving healthcare closer to a true market based system.

For too long, the productive benefits of creative destruction have eluded healthcare. Instead, we’ve relied on a system that boxes out disruption through a lack of connectedness and transparency. With the transition to value-based reimbursement models — market based principles such as price transparency, competition, and regular innovation are quickly becoming a high priority.

Medicare already ties many payments to quality and plans to further shift reimbursement away from fee-for-service. In a 2015 study, hospital CEOs ranked financial challenges as their top concern, with nearly 65% of surveyed hospital executives ranking volume to value as a top financial challenge.

In healthcare, we’ve been flying blind, but clearly, value and a transition to a more market oriented system now has the attention of the C-suite.

With ever more information and communication available, analytics is upending how consumers and providers engage with healthcare.

At its core, value-based purchasing (VBP) under the Medicare reimbursement model is all about the consumer (or the patient); how the consumer is treated, how well patients respond to treatments, and what the patient thinks of their entire care experience.

This means healthcare is slowly starting to resemble other sectors of the economy, in that, it is starting to recognize that consumers — not just payers — must be satisfied.

In 2016, nearly 25% of hospital reimbursement under value-based purchasing will be tied to how well hospitals engage with their patients.

According to the Studer Group, Hospital Consumer Assessment of Healthcare Providers and Systems measures will include:

  1. Communication with Nurses
  2. Communication with Doctors
  3. Responsiveness of Hospital Staff
  4. Pain Management
  5. Communication about Medicines
  6. Hospital Cleanliness and Quietness
  7. Discharge information

Notice. Of the 7 measures, 3 clearly identify communication as a vital objective.

In healthcare, scaling good ideas has never been easy. Sharing information may never be simple and healthcare will continue to grow in complexity. But advances in data science and market based principles is more than hype, they’re finally making their way into healthcare and its time we start to be more optimistic.