This document summarizes a presentation about engaging clinicians and administrators in efforts to rapidly reduce costs and improve revenue. The presentation discusses moving from a fee-for-service to a value-based system and making the transition from a hospital-centric to a community-centric model. It also addresses the importance of including clinicians and administrators in decision making, being transparent, and resolving conflicts between the two groups to achieve organizational goals.

1. Achieving Rapid Cost Reduction &
Revenue Improvement by
Engaging Clinicians &
Administrators
Kent Bottles, MD
Thomas Jefferson University School of Population Health
Chief Medical Officer, PYA Analytics
HFMA National Institute
June 24, 2014
Las Vegas, Nevada

2. Old New
ickness System
ealth No Disease
cute Disease
ee for Service
ospital Beds Full
ospital Centric
• Wellness System
• Health: Wellness
• Chronic Disease
• Value Based
• Hospital Beds Empty
• Community Centric
• Patient Centric
• Shared Dec Making
• Measurable Metrics

3. Old New
ost not considered
ndependent doctors
ndependent hospital
ed record secret
paque
rtificial harmony
• Decreased cost
• Employed docs
• Integrated delivery
system
• Open access record
• Transparent
• Cognitive conflict
• Digital
• Predictive analytics
actionable
correlations

4. 44
The Curve

5. Unhappy Doctors & Happy Doctors
Your doctor’s unhappiness is a catastrophic
problem that the new law didn’t anticipate and
is not prepared to address.” Dr. Marc Siegel,
Associate Professor of Medicine, NYU
Langone Medical Center
To us, supporting the ACA makes moral and
medical sense.” Dr. Jeffrey Drazen, Editor-in-
Chief, and Dr. Gregory Curfman, Executive
Editor, New England Journal of Medicine

6. Dr. Daniel F. Craviotto, Jr.
ocs in the trenches do not have a voice
Damn the mandates…from bureaucrats who
are not in the healing profession”
HRs waste time
oard recertification is time consuming
hysicians as a group should not accept any
health insurance

7. Dr. Aaron Carroll
omplaining about not having a voice in WSJ
Most people have to choose between doing
God’s work and being in the 1%. Only
doctors get to do both”
oard recertification is mandated by doctors
It’s tone deaf in today’s economy for people
at the top end of the spectrum to complain so
publicly about how little they are paid”

8. Dan Munro
is criticisms are not patient-centered
rthopedics annual compensation of $413,000
4 million non-elderly were uninsured or
underinsured in 2012
00 million Americans in poverty or in the
fretful zone just above it
alf of all doctors believe they are fairly
compensated

9. • My success depends on my individual
behavior
• Individual activities lead to personal financial
success
• Individual activities lead to successful
clinical outcomes
• Strong financial and clinical performance of
my parent organization and physician
colleagues have little impact on my personal
success
• “Cowboys”
Mindset of the Traditional
Physician

10. • My success is enhanced by collaboration
• Individual activities lead to the financial success of parent
organization
• Individual activities lead to successful clinical outcomes
because of collaboration
• Strong financial and clinical performance of my parent
organization
• And physician colleagues have major impact on my
personal success
• “Pit Crews”
Mindset of the Integrated
Employed Physician

11. • Represent local physician interests at
organization-wide venues
• Secure resources for local physicians
• Rally physicians against perceived
enemy
− Hospital administration
− Insurance companies
− Competing physicians
Traditional Physician Leadership

12. • Holding physicians accountable for performance
• Working as part of a leadership team of the
organization
• Supporting decisions they may not personally
agree with
• Modeling behavior that supports the overall
organization goals
• Leader’s job is not to protect, defend, and ensure
local interests that may conflict with overall
organization interests
• Leading in an integrated aligned system is a real
job
Physician Leadership in Integrated
Aligned System

13. Administrators vs. Clinicians
roactive planners
ork well in groups
elayed gratification
d. with organization
stablish rules
eactive agents
ork well 1:1
nstant gratification
d. with profession
esent rules

14. Administrators vs. Clinicians
ollective culture
ong time frame
nstitution centered
nfluence
ospital community
xpert culture
hort time frame
ndividual centered
ontrol
ospital work shop

15. Administrators vs. Clinicians
urses, leaders
rocess oriented
hin skinned
ollaboration
Ds, Law, Engineers
utcome oriented
hick skinned
ollegiality

16. Administrators vs. Clinicians
uccessful organization needs both
ayo Clinic dyad successful leadership
either group is more important than the other
alignant administrators tend to become cynics
and victims
alignant clinicians tend to become narcissists

17. Expert Engineer Culture
Edgar H. Schein, DEC is Dead, Long Live DEC, 2003
ndividual commitment is not to employer
eople, organization, bureaucracy are
constraints to be overcome
ngineering culture disdains management and
marketing
o loyalty to customer: if trade-offs had to be
made between building “fun,” “elegant”
technologically challenging computers and
the needs of “dumb” customers, guess who

18. Partnership Requires Negotiation
ou can compete: win/lose
ou can accommodate: lose/win
ou can collaborate: win/win
ou can compromise: lose/lose

19. Margaret Thatcher (b. 1925)
British Conservative politician, prime minister.
Quoted in: Denis Healey, The Time of My Life, pt. 4, ch. 23 (1989).
Ah, Consensus…
To me, consensus seems to be the process
abandoning all beliefs, principles, values and
policies.
So it is something in which no one believes and
to which no one objects.

20. Physicians Agree to
ractice evidence medicine
eet regulatory, quality, safety goals
eport quality data and outcomes
ome to meetings
se the EMR
ccept decisions made by leaders

21. Organization Agrees to
ave primary loyalty be to physicians
egotiate well to align incentives
nclude physicians in decisions
rovide clear and timely information
(membership criteria, quality scores,
improvement process, financial performance)

22. Organization Agrees to
rovide services & education to ease burdens
ee feedback from physicians
aintain confidentiality
ake meetings worthwhile & engaging
reate physician leadership training academy

23. Engaging Doctors in the Health
Care Revolution TH Lee & T Cosgrove, HBR
oble shared purpose
elf interest
espect
radition

24. Engaging Doctors in the Health
Care Revolution TH Lee & T Cosgrove, HBR
oble shared purpose
– Shifts conversation from negative to positive
– Acknowledge need for sacrifice
– Duty to patients preempts other obligations
 Urology patient story at Cleveland Clinic 2008
 Advocate huddles lead to 40% increase in safety
event reports
– Mayo Clinic: “The needs of the patient come first”
 Patients come first
 Status quo is unsustainable

25. Engaging Doctors in the Health
Care Revolution TH Lee & T Cosgrove, HBR
elf-interest
– Compensation plans tied to citizenship, quality
– One year renewable contracts
– Watch for conflicts of interest
– Reward collaboration

26. Engaging Doctors in the Health
Care Revolution TH Lee & T Cosgrove, HBR
espect
– Behavioral economics, peer pressure,
transparent data
– Partners unmasked data on MD use of imaging
led to 15% drop in orders for high cost tests
– University of Utah transparent patient
experience ratings utilized gradual introduction

27. Engaging Doctors in the Health
Care Revolution TH Lee & T Cosgrove, HBR
radition
– Mayo Clinic dress code
– Physician communication standards
– Organization must be willing to part ways with
physicians who don’t support shared purpose

28. Physician Benefits
CO participation (Medicare & Commercial)
uality rewards
FS quality contracts
arrow network participation
MR support
are Management access

29. Multicare Health System Sepsis Program
http://www.healthcatalyst.com/success_stories/how-to-reduce-sepsis-
mortality-rates-by-22
2 month decrease in sepsis mortality by 22%
.3 million dollars in validated cost savings
ealth Catalyst data approach created
algorithm to define a septic patient
eams (clinicians, techs, analysts, quality)
evere sepsis order set

30. Multicare Health System Missed Charges
http://emrdailynews.com/2010/03/30/multicare-health-system-selects-apollo-data-technologies-to-
automate-missing-charge-recovery/
redictive analytics captured $2 million in
missed charges by using algorithms
eyond rules-based charge capture software
nalyze millions of records and provide
simulations
etermine individual physician billing patterns

31. emorial Hermann
– Second largest non-profit in Texas
– 6,000 practicing physicians
– 9 Acute Hospitals, 3 Heart & Vascular Institutes
– 98 Outpatient Sites
emorial Hermann Physician Network (MHMD)
– 3,500 practicing physicians with 2,000 clinically integrated
Memorial Hermann Background

32. Memorial Hermann:
Clinical Integration Results

33. Memorial Hermann:
Clinical Integration Results
013 MSSP ACO Results
– Total savings = $33,190,528
 Actual beneficiary expenditures: $290,919,262
 Benchmark expenditures: $324,109,790
– Total payment received = $16,263,359
 50% quality performance share rate x total
savings

34. Case Study: Robert Wood
Johnson University Hospital
rganization: 600-bed Academic Medical Center in New Brunswick, NJ
hallenge: to reduce operating budget by $400,000 by targeting physicians to
assist in building momentum for performance improvement
olution: organization implemented Crimson to reduce LOS and cost
– CMO reviews Crimson profiles with individual physicians and groups, uses timeline
feature to review specific end-of-stay opportunities with LOS outliers
– Physicians are given specific action steps (such as meeting with CDI staff and support
from case managers to assist with discharge planning)
– Decision support developed tools to track improvements and report results

35. Case Study: Griswold Hospital
(pseudonym)
rganization: 300-bed Hospital
hallenge: engage physicians to help
lower inpatient costs and meet quality
goals
olution: hospital entered into a co-
management agreement with an
independent cardiology and
cardiovascular surgery group
– 70% of physician pay distributed as
hourly reimbursement for
administrative tasks
– 30% of physician pay based on their
performance against selected clinical
and operational metrics, including cost
reduction on implant devices.
Source: The Advisory Board Company

36. Case Study: Covenant Health
System
rganization: five-hospital integrated
delivery system in Lubbock, TX
(corporate parent of CHP, a 310-
physician CI network)
hallenge: design clinical integration
program initiatives that will include
inpatient quality and cost goals,
including supply chain improvement
olution: system created “hospital
efficiency contract” with its 300-
physician affiliated CI network that
included several inpatient quality and
cost measures chosen by hospital
staff.
– Efficiency contract strengthens
alignment between the health system
and physician network goals
• Impact: decreased cardiovascular
device costs by $400,000 and
improved quality of services
− After one year, hospital generated far
more in cost savings than it had
invested in the CI program
Source: The Advisory Board Company

37. Case Study: Burley Medical
Physicians’ Group (pseudonym)
rganization: 70-physician group employed by a small health
system in the South
hallenge: engage physician in cost management
olution: Burley’s leaders calculate the contribution margin ratio
for both PCPs and specialists, using it as the basis for
discussion improvement opportunities.
mpact: increased the average contribution margin from 18.5%
in 2010 to 22.7% in 2011
− By holding PCPs accountable for the costs of inpatient cases performed on

38. Tactic: Hardwire Future Options
• University of Tennessee Medical
Center (500-bed AMC)
• 16.9% savings on $4.7M CRM
supply basket
• Hospital also unlocked additional 3%
savings by meeting volume triggers
• Total Savings: $793K
Tactic: Improve Incumbent Pricing
• Enloe Medical Center (391-bed
medical center)
• Incumbent bids creatively and
unlocked 19% savings on $3M
basket of orthopedic implants
• Total Savings: $566K
Tactic: Leverage Alignment
• Munroe Regional Medical Center
(400-bed community hospital)
• Non-employed orthopedists in
intensely competitive market agreed
to demand-matching protocol after
learning premium prices
• Total Savings: $400K
Tactic: Put a Price on Preferences
• Beaumont Health System (1,750
bed, three-hospital system)
• Physicians learned price difference
for preferred items and agreed to
shift to reach 14.4% savings on bone
and tissue supplies
• Total Savings: $618K
Other Examples of Significant Cost
Savings

39. 3939
The Curve

40. APPENDIX
40

41. Formula for
Organizational Change
D + V x L > R
D = Dissatisfaction with how things are
V = Vision of what is possible
L = Leadership needed for success
R = Resistance to change

42. Symptoms of Resistance
uperficial agreement with change with no
commitment or follow-through
low progress
pathy
xcuses for lack of engagement or progress

43. Stages of Acceptance
enial
nger
argaining
epression
cceptance

44. Addressing Resistance
eaders cross bridge first by coming to terms
with own concerns
elp physicians let go of expectations that
cannot be met
et out the news
isten to and honor resistance

45. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
aster, flatter, more interconnected world
reater capacity for innovation, self-
management, personal responsibility, and
self-direction
rganizations need employees who have
higher level of independence, self-reliance,
self-trust, capacity to exercise initiative

46. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
here is a mismatch between world’s
complexity and our own
educe the complexity of world
ncrease our own complexity
eaders need to run and reconstitute their
organizations (norms, mission, culture) in an
increasingly fast-changing environment

47. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
ardiologists tell patients they will die unless
they change
nly one in seven are able to change
here is a gap between what we want and
what we are able to do
eople want to do more than one thing and
they often conflict; we are a living
contradiction

48. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
olumn 1: Improvement goal
olumn 2: Doing/not doing that work against
the goals in column 1
olumn 3: Hidden competing commitments
olumn 4: Big assumptions

49. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
olumn 1 goal: Sources of input (yourself, your
colleagues, your family)
olumn 2: All the things you are doing or not
doing to work against your goal
olumn 3: If I imagine doing the opposite of
the things in Column 2, what is the most
scary feeling that I will have
olumn 4: Some will be true, some will be
false, some will be uncertain

50. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
EO/Father collective immunity
olumn 1 (Improvement goal)
– To be a better listener
– To be able to stay in the present
– To be more patient

51. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
EO/Father collective immunity
olumn 2 (Doing/not doing against goal)
– I allow my attention to wander
– I start looking at BlackBerry
– I think about best response to what is said
– I think about what person should do rather than
listen

52. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
EO/Father collective immunity
olumn 3 (Uncon. hidden commitment)
– To not look stupid
– To not be humiliated
– To not feel out of control
– To not make a big mistake
– To not allow someone else to make a mistake

53. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
EO/Father collective immunity
olumn 4 (Big assumptions)
– I assume limited number of chances with
daughter and they will stop listening if I am
stupid
– I assume it is a disaster if kids ridicule what I
say
– I assume wife wants me to solve problems she
shares with me
– I assume helping is always a matter of telling
other what to do

54. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
rescribing narcotics: The doctors’ immunity
map
olumn 1 (Commitment)
– Prescribe narcotics appropriately
– Treat pain appropriately
– Not be seen as place to get narcotics easily

55. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
rescribing narcotics: The doctors’ immunity
map
olumn 2 (Doing/not doing instead)
– Not taking time to do narcotic contracts
– Writing prescription without taking full history
– Not taking time to take complete pain history
when request comes at end of visit
– Not firing patients from the practice who violate
contract

56. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
rescribing narcotics: The doctors’ immunity
map
olumn 3 (Hidden competing commitments)
– Need to stay on time
– Need to believe patients
– Need to be liked by patients
– Need to avoid stress of patient confrontation

57. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
rescribing narcotics: The doctors’ immunity
map
olumn 4 (Big assumptions)
– If I’m late, I am an inefficient physician
– If I don’t believe my patients, I am not their ally
– If I respond thoroughly to every request, I will
fail at my other important work
– If I’m not liked by my patients, my reputation will
suffer
– If I don’t ensure all possible pain is treated, I
may fail to reduce suffering

58. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
eople that have succeeded
hange both mindset and behavior
ecome focused observers of their own
thoughts, emotions, behaviors
indset changes are in direction of seeing
more possibilities
ake risks to challenge assumptions; use data
around consequences of new action

59. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
alendar exercise
urvey of colleagues, families, friends
iography of big assumptions
unning a test of one’s big assumption
– SMART
– Safe and modest
– Actionable
– Research test

60. Immunity to Change
Robert Kegan & Lisa Laskow Lahey, 2009
adder of inference: our tendency to adopt
inaccurate beliefs based on selective
observations, false assumptions and
misguided conclusions
ata_Select data_Add meanings_Make
assumptions_Draw conclusions_Adopt
beliefs about the world_Take actions based
on beliefs

61. Gamification
he use of game thinking and game
mechanics to engage users in solving
problems
ompetition, achievement, status, self
expression, altruism, closure
niversity of Washington FoldIt
CSF Benioff Children’s Hospital
yandus COPD simulation software

62. What Makes Gamers Keep Gaming
John Tierney, NY Times, Dec 7, 2010
hy are virtual worlds more interesting than
school work?
an games be used to solve real world
puzzles?
hy can’t life be more like a video game?

63. What Makes Gamers Keep Gaming
John Tierney, NY Times, Dec 7, 2010
hy do games create flow so easily?
ard fun: overcoming obstacles in pursuit of a
goal
nstantaneous feedback
ontinual encouragement from computer and
friends
layers get rewards for progressing to higher

64. What Makes Gamers Keep Gaming
John Tierney, NY Times, Dec 7, 2010
amers fail over and over again
hey remain motivated
eep going until they succeed
iero: proud

65. What Makes Gamers Keep Gaming
John Tierney, NY Times, Dec 7, 2010
One of the most profound transformations we
can learn from games is how to turn the
sense that someone has ‘failed’ into the
sense that they ‘haven’t succeeded yet’”
Tom Chatfield

66. What Makes Gamers Keep Gaming
John Tierney, NY Times, Dec 7, 2010
ikipedia took 8 years and 100 million hours of
work
eople play World of Warcraft in a single week
200 million hours

67. Gamification
e-Mission game from HopeLab treatment
adherence improvement in children with
cancer
CSF Benioff Children’s Hospital
– CLABSI cost $16,500 per patient
– LevelEleven Compete app encourages nurses
to compete on mundane tasks associated with
good outcomes

68. Gamification
ane McGonigal. Reality Is Broken: Why
Games Make Us Better and How They Can
Change the World. NY: Penguin, 2011