2014 U.S. News Conference – Hospital of Tomorrow (1)

This is the first part of a multi-part coverage of the conference celebrating 25 years of service for US News Best Hospitals and the Hospital of Tomorrow.

Mort Zuckerman



Mort Zuckerman US News CEO opened the conference.  Now over 25 years of “Best Hospitals Report” reviewing 5000 hospitals in 16 divisions.  The report was created to  help patients sort through hospitals and departments of find the best care.  During July their healthline portal had 6 million visitors and over 22 million views.  US News is committed to the highest quality of data and analysis for the benefit of patients.



Michael Porter PhD MBA

Professor Michael Porter is the co-author of the 2006 book “Redefining Health Care: Creating Value-based Competition on Results”. The topic he discussed is Value Based Healthcare Delivery. He stated that value for the patient is the fundamental purpose of any healthcare system and the definition of success.  The organizations that learn to do this and measure it are those which will succeed.  We measure value as the quality perceived by the patient over the cost of delivering that value.

To drive the fundamental goal of value for the patient takes a whole group of professionals delivering care around the needs of the patients.  He focused on the definition of value, what is value?  We have to think of it in the right way, value to the patient.  There are multiple outcomes for multiple conditions that determine value and we must learn to see these differences.  Cost is the total cost of the entire spectrum of care in order to obtain that determined outcome. The traditional model of healthcare has not been focused around the needs and outcomes of patients but rather around departments and specialties. But this is the transformation that we must ultimately make. We must deliver care to meet the needs of the patients.

In order to get to high quality delivery of care there are 6 different points of focus.
1. Organizational Change. He stated that the delivery of healthcare must be centered around the needs of patients.  Primary Care for instance should be focused on delivering care to groups of patients with similar needs.  Primary Care Elderly is different than Primary Care Diabetes and systems that make this change, a difficult one, are going to deliver better quality of care to the patient.

2. Measurement Change. If we are going to deliver value, we must measure value. Without data on cost or value, we are left to opinion and conjecture.  This fundamental change we must make happen over the next decade.

3. Payment Change. We must change the way in which we pay for healthcare services. Payments must be aligned in order to achieve the increase in quality we desire.

4. Real Systems Change. Right now healthcare systems are not really systems.  They are loosely joined entities that do not function as systems.  We must convert to having integrated systems that work at the right place in the right way.

5. Expand Geography. He said “we must expand our geographic footprint” to deliver care more efficiently.  Current healthcare systems service contained and local geographic areas delivering fragmented care.

6. Information Systems.  We must put in place information technology to enable the measurement and value.  EMRs are not enough, it is what an EMR can do that delivers value.  Having a patients history readily available enhances the quality of care delivered. There is no IT platform that gets this done, the delivery of high quality care.

He went on to explain a study in Germany, where they organized teams around patient problems and the multiple specialists and primary care in teams were able to enhance the quality of care and reduce the cost by 20% in one year and “almost overnight”.  This sounds very much like the way that hospital systems have cardiac care teams or oncology teams where specific unique problems are addressed by the teams. At this point in his talk, I am not seeing what is so dramatic.  The delivery of care to patients is very complex.  The ecosystems and interactions are actually very efficient between physicians, in my experience.

He is suggesting that volumes of care for specialty must be aggregated because the larger the number of cases an institution does the better the outcomes. This statement seems contradictory to his initial premis and direction, he is now saying that specialty care must be hypertrophied by volume.  He stated that we must focus on outcomes and not the procedure but the illness entity.  We must standardize and measure the same thing in the same way.

What outcomes matter?  Survival is of course important but there are numerous primary and secondary outcomes associated with the care delivered.  Primary outcomes such as survival, complications, success, time of operation, blood loss are all important.  Secondary outcomes such as pain, re-hospitalization, infections or side effects.  Finally tertiary outcomes reveal the long term success or failure of the intervention or care.  These are important measures of “success.”

To have true cost reduction in healthcare we must understand the cost of a particular condition of the patient and compare it with the value.  Current costs are by department and this tells you nothing about true costs in an itemized manner in order to reduce those costs.  What is the cost of resources needed to deliver the support services for that patient?  Currently this information is elusive.  If we can understand true costs then we can make rapid improvement in reduction.

He explained that the differenced in pay from the lowest to the highest paid (doctors) is the largest of any industry.  Doctors get paid much more than nurses and so on down the line.  We must utilize the licenses of all healthcare personnel to the maximum of their ability.  This will allow for a more efficient system of care.  At this point in his talk I am thinking, “you have not been to medical school or seen what it takes to become a doctor, nor have you seen the burden of supervision of all healthcare personnel who make frequent errors!”  Also, “I know many nurses that make as much as some doctors and nursing care is three shifts of 8 hours and is more costly than physicians.”
In my opinion, you can not replace a private physician who knows you better than any EMR or system.  

He went on to say that global capitation in payment of care, such as the flawed ACO (reworked HMO) models are not working.  In his opinion, bundled payment of care is the way to go, paying for the spectrum of care for a particular condition.  To me this made a lot of sense, in obstetrics bundled payment has existed for over 30 years, one payment to the doctor for the entire 9  months of care, including the delivery and two week post partum visit.   Applying this to the spectrum of care for all types of surgeries makes sense. He also went on to say that in Sweden, the bundled reimbursement is well underway and implemented. The patient at one year would also provide quality assessment and outcome and a high score allows for a bonus payment of 10% of the total initial charge for the surgeon.  This is a value based bonus system which has worked well in Sweden.

He is seeing a expansion of hospital affiliations, “you don’t have to own it, you can affiliate with it” he said. You can begin to get many of the benefits of value with affiliation and larger geographic service areas.  This helps organizations to reduce service duplication and enhanced quality of care by enhanced specialization around patient needs.


Michael Porter is the author of 18 books and numerous articles including Competitive Strategy, Competitive Advantage, Competitive Advantage of Nations, and On Competition. A six-time winner of the McKinsey Award for the best Harvard Business Review article of the year, Professor Porter is the most cited author in business and economics.


by Jose Bolanos MD

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