5
Communicating a Value Proposition

A major barrier to improving quality is the receptivity of the management and leadership of health care institutions, Thomas Boat said.

INTEGRATING THE BUSINESS LANGUAGE

For quality improvement to have its next big impact, it must be brought to the level of chief executive officers (CEOs) and chief financial officers (CFOs), Scott Hamlin said. Hamlin offered that the concepts articulated during the workshop were the correct ones, but the next step is to incorporate the language of business into researchers’ and policy makers’ thinking. Without embracing the language of CEOs and CFOs, they can never be brought along to understand what needs to be done. CEOs and CFOs are the ones who influence boards, shareholders, and trustees’ decisions, and they are responsible for the delivery of value. Boards, shareholders, and payers all share one common language—market share.

To integrate the business language, competitive advantage must be addressed because it is the CEO’s and CFO’s primary concern. Hamlin described competitive advantage as specific characteristics of the organization that are marketable and that positively differentiate the organization from others. Researchers and policy makers must help decision makers understand how quality improvement and quality improvement research translate into competitive advan-



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5 Communicating a Value Proposition A major barrier to improving quality is the receptivity of the management and leadership of health care institutions, Thomas Boat said. INTEGRATING THE BUSINESS LANGUAGE For quality improvement to have its next big impact, it must be brought to the level of chief executive officers (CEOs) and chief financial officers (CFOs), Scott Hamlin said. Hamlin offered that the concepts articulated during the workshop were the correct ones, but the next step is to incorporate the language of business into research- ers’ and policy makers’ thinking. Without embracing the language of CEOs and CFOs, they can never be brought along to understand what needs to be done. CEOs and CFOs are the ones who influence boards, shareholders, and trustees’ decisions, and they are respon- sible for the delivery of value. Boards, shareholders, and payers all share one common language—market share. To integrate the business language, competitive advantage must be addressed because it is the CEO’s and CFO’s primary concern. Hamlin described competitive advantage as specific characteristics of the organization that are marketable and that positively differen- tiate the organization from others. Researchers and policy makers must help decision makers understand how quality improvement and quality improvement research translate into competitive advan- 44

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4 COMMUNICATING A VALUE PROPOSITION tages. The disconnect Hamlin saw between the workshop discus- sions and where the discussions needed to be to capture the atten- tion of leadership was the business model. In defining a business model, a business case is usually made, followed by case examples supporting it. In health care, the opposite seems to happen. Case studies are often used as proof of a business case, but are rarely presented in the context of the entity’s articulated business model or business strategy. Hamlin provided the following business model as an example: Cincinnati Children’s Hospital Medical Center is located in a small metropolitan area and relies on a substantial portion of its inpatient revenues to come from patients traveling from outside its primary service area; many patients must bypass multiple other options along the way. To justify patients’ efforts, or the trust of a referring physician, the Cincinnati Children’s Hospital Medical Center must have a demonstrable outcome advantage or provide a cost advantage for a comparable outcome. This is the busi- ness model and shows the importance of quality. Improved quality carries the ammunition to attack both sides of the “value equation”: product differentiation from better outcomes and/or lower costs. As an academically affiliated organization, Cincinnati Children’s Hospital Medical Center’s care is suboptimal because no patient stays in a division or department throughout an entire inpatient stay. This is one of the biggest challenges to optimizing value, Hamlin said, noting that although academic structures can inhibit quality improvement, the highly successful pieces must be built up. The CEO’s and CFO’s roles are to help each line be as successful as pos- sible. If parts of the system are suboptimal, they must work together to find a solution, not just focus on the specialties in which they are competitive. The problem is not the reimbursement system, Hamlin said, because people will always find ways to maximize profits in reimbursement systems. The real key is to improve the quality, and thereby the value, of health care. THE NEED FOR RESEARCH Research partnerships with clinical care are imperative. The research and development arm of a health care institution cannot be a separate group and must be engaged in the decision-making process, Hamlin said. Examples of success, such as those described during the first panel, can influence others to improve the quality of care they provide, Boat said. Although successful spread can occur in this manner, it will not be entirely successful without an evidence

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4 CREATING A BUSINESS CASE FOR QIR base to convince an organization’s leadership that it can improve health outcomes and ultimately lower costs. A balance must be struck between generating evidence to sup- port improvement efforts and convincing institutions to implement indicated changes, Boat recommended, adding that every quality improvement effort should include an analytic component. Before each intervention, the intervener and data analyst must know what data to collect, how to collect them, and how to analyze them. The best and most appropriate analytic tools available should be used to study each intervention because randomized controlled trials are not always the best approach. The best analytic techniques should be applied to better evaluate the potential impacts of interventions. Predictive modeling of interventions is another role for research, Boat said. The best evidence available should be used to identify health care risks and plan interventions that avoid those risks. React- ing to and reducing adverse events and waste in medical care must happen in real time. For this purpose, investigators should work with clinicians and hospital management to facilitate decision- making processes. OTHER AUDIENCES AND AREAS During this discussion, other areas for the forum to pursue arose and are summarized below. Adherence The lack of patient adherence to prescribed care prevents medi- cine from being as effective as it could be, Boat said. Although there are data documenting that 50 percent of people do not receive indi- cated care, approximately 50 percent of care also is never delivered because of lack of adherent patient behaviors. This stems from inad- equate partnering for health care planning with the true caregivers, the patients themselves and their families. There is a need for these caregivers to understand how to manage their health care; with- out this component, quality of care does not matter, Boat said. The forum should address the issue of adherence and self-management in the future because health care is really about self-care. Equity Issues of equity, especially regarding the underinsured or those with mixed copays, are challenging when developing a business

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4 COMMUNICATING A VALUE PROPOSITION case, Marshall Chin said. Hamlin agreed that this was a daunting issue, but said that if quality is not resolved first, equity cannot be addressed. Equity is not the main issue; poor utilization of resources is. Organizational Theory Organizational theory is a field from which quality improve- ment should learn, O’Neill said, referencing the field’s contributions to other industries. Organizational theorists could inform health care about the types of organizations that are more or less likely to suc- ceed in the objective delivery of health care. Of particular use would be organizational structure, hierarchy, and leadership models.