Thursday, June 30, 2011

The Laboratory

“Hey, Jaded Julie, we’re going to leave the crystal ball and talk about the hospital laboratory.”

“Curmudge, when you see a modern lab, you’ll think that everything in your crystal ball had already happened.”

“Some things don’t change, Julie. While clients tend to take them for granted, labs of all types have always needed to demonstrate excellent accuracy and responsiveness. And here’s another example: My industrial labs used to solve people’s problems, while clinical labs provide more than 70% of the data used by physicians to manage patient diagnosis and treatment.”

“If we are going to talk about laboratories, we should probably begin at the beginning—with the patient. My years of experience with this blog tell me that the curtain is about to go up on another of our Curmudge-and-Julie theatricals. I might as well roll up my sleeve.”

“You are going to play the patient, Julie, and here comes a phlebotomist to draw some of your blood”

“To a phlebotomist, the world consists of two kinds of people, ‘hard sticks’ and ‘easy sticks.’ Fortunately I’m an easy stick…see, that didn’t hurt a bit. My blood was drawn into little evacuated tubes labeled with my name, date of birth, specimen number, and a bar code. Of course, before starting the procedure, the phlebotomist asked me to recite my last name and birth date to be certain she had the right patient. She also smiled at me, introduced herself, and gave me an empty cup to take into the ladies’ room.”

“Here we are in the hospital basement, Julie. The morgue, down that hall, is not going to be part of our tour. When the lab was expanded a few years ago, it was relocated down here. Design of the laboratory’s space—to increase efficiency and reduce wasted motion—was one of the hospital’s first Lean projects. Our guide through the lab will be Mary Dikeman, Laboratory Manager.”

“It’s a good thing that you aren’t the guide, Curmudge. You never knew much about clinical labs, and what you did know is 40 years out of date. ‘Good morning, Mary. Thank you for taking time to show us around.’”

“Welcome to our laboratory, Julie and Curmudge. Most people don’t know how large the laboratory is and how many interesting things go on here. This is a walk through St. Elizabeth Laboratory, but it describes some of the same things that go on at any of the hospital labs.

So come on in the front door to Specimen Processing; be mindful of the phlebotomists with their carts leaving the lab to go draw blood from patients. And here comes a courier with a cart full of coolers that contain specimens from other clinics and hospitals. Once in the lab you will notice the technologists and support service technicians are emptying the coolers and then ‘receive’ each specimen in the computer; this tracks the movement of the specimens from site to site. These are sorted and then delivered to the departments such as Chemistry, Hematology, Blood Bank, Microbiology, Cytology, and Histology that will perform the testing. Located in Specimen Processing, the pneumatic tube system also brings specimens to the lab. Centrifuges sit on the counter and are used to spin and separate the cells from the liquid in some of the blood tubes when the tests require serum or plasma instead of whole blood.”

“As we go through the lab, Julie, please notice how important computers are for everything from sample tracking to operating many of the instruments. In my environmental lab, 20 years ago, all we had was Lotus 1-2-3 for sample log-in.”

“And for an old chemist like you, Curmudge, I’d better help Mary by defining some of her terms. Cytology is the study of cells, and histology is the study of tissues.”

“Regrettably, from the experience of my late wife, I have learned a bit about histopathology. “

“Okay, visitors, let’s move on to the right and head into the Blood Bank area. Here you may see boxes that held blood products that were delivered from the Community Blood Center. On the left is a Medical Technologist that has certification from the American Society for Clinical Pathology [MT(ASCP)] that is doing blood typings and cross matches to see what unit of blood will be the best match for the surgery patient. There is an instrument that uses a gel technology to help determine the antibodies that are important to finding a good blood match.

Notice the large refrigerator that holds all the blood bags and blood products. It has a special temperature recording chart that is so important to keeping the blood at the proper temperature at all times to keep it safe. There is also equipment used to prepare platelets for transfusion.”

“All I know about my blood is that it is type A-negative.”

“And Curmudge, it’s being pumped through your ancient circulatory system at glacial speed. Let’s take a break and return next week to continue the tour with Mary.”

Affinity’s Kaizen Curmudgeon

Monday, June 13, 2011

The Crystal Ball 8

“Golly, Curmudge, I can hardly wait until we get to the end of Christensen’s The Innovator’s Prescription. It’s like a novel; I’m eager to learn what health care will be like in the future.”

“It’s not a sure thing, Jaded Julie. The future will depend on which of the following two philosophies of health care will be dominant. (1) Improving the value of health care can’t happen unless those who receive health services know what they cost and bear at least a share of the cost burden. (2) Some people believe with near-religious fervor that employers or the government are morally obligated to cover health-care costs. In that scenario, reimbursements are administered prices; they are insulated from market forces and the efficiencies that would result from disruptive innovation.”

“Whether it’s through taxation or cash on the barrelhead, health care has to be paid for. It sounds as if Christensen’s ideas will function better under Scenario 1. How will that work?”

“As mentioned last week, the integrated fixed-fee providers will charge patients an annual fee (capitation). Employers who directly manage their employees’ health care use a combination of high-deductible insurance (to protect against catastrophic illness) and health savings accounts (HSAs). The employer puts before-tax money in the employee’s HSA; the employee can also add (before tax) to the account. The employee pays for health care out of the HSA up to where the high-deductible insurance kicks in. Upon retirement, the employee can keep any funds left in the HSA.”

“Hey, this sounds like my 401(k). I can see where it is to the employee’s advantage to frugally manage his health-care costs and to everyone’s advantage for him to stay healthy. But what about the ‘uninsured poor?’ “

“They could use HSAs too; but instead of employers (which they may not have), governments could match by formula the HSA contributions made by the low-income citizens. Governments would also need to subsidize their high-deductible insurance.”

“Curmudge, under any system—including the present one—someone is doing well financially. It’s human nature for them to want to protect their rice bowl. What kinds of resistance is disruptive innovation likely to encounter, and how might it be overcome or circumvented?”

“Virtually every innovation we have discussed in the past few weeks will be opposed by some group or organization that wants to protect the status quo. Their most common vehicles are regulations covering certification and licensure that control who gets paid. Usually the regulations were established to protect the public; but when they become outdated due to technology, they will end up protecting the economic interests of the providers. This means that head-on attempts to bring about change in the health care system are likely to fail.”

“So are we stuck in our present system? Was everything in Christensen’s book just an intellectual exercise?”

“The feasibility of the improvements has been demonstrated by the examples in the book. Organizations like the integrated fixed-fee providers and the employers who directly manage their employees’ health care are not directly bucking the present system. They are going around it by setting up systems of their own. Their success will bring about success elsewhere as others adopt their innovations. Changes that seem impossible at present will become feasible.”

“In his book Christensen suggests that regulations will ultimately change in reaction to the innovators’ successes. ‘The focus of regulations such as licensure and certification needs to keep pace with technological change.’ ‘As care moves through empirical medicine toward precision medicine, the focus should shift to accrediting processes, and ultimately to guaranteeing outcomes.’ “

“Julie, in countries like Great Britain where the government ‘owns’ the health care system, there is no place outside the system where innovators can bring about changes. Their needed modifications will require a head-on approach, which will be extremely difficult.”

“Okay, Curmudge, is there a simple solution to all of this?”

“As I said once before, for every complex problem there is a solution that is quick, simple, and wrong. In the U.S., that sort of ‘solution’ would be to handcuff our health care system in a way that makes disruptive innovation impossible.”

Affinity’s Kaizen Curmudgeon

Friday, June 3, 2011

The Crystal Ball 7

“As promised, Jaded Julie, today we are going to share the highlights of Clayton Christensen’s observations regarding chronic diseases. The spectrum of chronic diseases is extremely wide, ranging from myopia (nearsightedness), which I have had since age 13, to Alzheimer’s, which one of my friends will likely die from before this blog is posted.”

“I understand that Christensen divides chronic diseases into two major categories: (1) Intuitive chronic diseases. Their lack of clarity in diagnosis and treatment necessitates the type of medicine practiced in a multidisciplinary solution shop. (2) Rules-based chronic diseases. A single practitioner can diagnose and prescribe evidence-based or rules-based therapy.”

“Let’s look at the first category, Julie. Dyspnea (difficulty breathing) is a symptom common to several pulmonary diseases that could involve interdependent molecular pathways, genetic differences, and environmental factors. A definitive diagnosis might require extensive tests interpreted by a team of experts who can knit together their extensive experience. Their judgment would guide the decision between rigorous but unpleasant therapy and palliative care. For pulmonary medicine, highly regarded solution shops include Mayo and National Jewish Medical Center.”

“Let’s be a bit more up-beat, Curmudge, and talk about the second category, the rules-based chronic diseases. With these diseases, diagnoses and treatments are usually straightforward, but a common problem is getting the patient to comply with the prescribed therapy. For some, the effects of noncompliance are evident and unpleasant. Celiac disease is an example; if the patient doesn’t avoid eating foods containing gluten, he/she most often will have gastrointestinal problems. At the other extreme is obesity, where the results of noncompliance are more subtle and usually delayed.”

“There is also a reimbursement issue for the provider. He/she will be reimbursed for diagnosing and prescribing but not for calling the patient to remind her to take her medicine, watch what she eats, and come in for her periodic check-up. More generally, there is no procedure code for keeping the patient well. According to Christensen, ‘the fault is the misapplication to chronic diseases of a business model that was developed for the practice of acute medicine long ago.’”

“It seems to me that Christensen has laid the groundwork for eventually solving some of the problems that are plaguing health care. In short, how are we (not you Curmudge; this may take longer than your expected lifetime) going to pull this off?”

“Christensen has described the so-called ‘integrated fixed-fee provider.’ ‘They don’t need to orchestrate a disruptive value network; they can create it.’ Obviously, this must be a very large organization like Permanente in California and Intermountain Healthcare in Utah. Most of the essential elements of health care that we have discussed—the disruptors and the disruptees—are under the corporate umbrella. Care is provided in the most cost effective venue. The annual fee paid by each patient provides an incentive for the organization to maintain their wellness—not to just treat their illnesses.”

“Don’t forget, Curmudge, Christensen’s criteria of an ideal entity for managing a health care system: (1) have a long-term perspective, (2) make money by keeping us well, not beginning when we become sick, (3) care about us personally, (4) be geographically nearby and convenient, and (5) be able to make needed changes decisively. Hey, that sounds like something an employer could do.”

“And some do, Julie. Christensen’s example is Quad/Graphics.”

“Of course. They’re next to highway 41 just south of Fond du Lac.”

“They operate four medical centers—free to employees and their families—offering family practice, internal medicine, pediatrics, OB/GYN, minor surgery, lab work, rehabilitation , and physical exams. Quad is self-insured and contracts with local hospitals and specialists for advanced care. Their emphasis is on wellness, and they have programs to combat chronic illnesses. Their physicians and nurse practitioners are salaried employees.”

“I read about another company in Wisconsin, Serigraph, that ‘took the problem of employee health insurance costs into its own hands.’ Their CEO even wrote a book about it, The Company That Solved Health Care (1). For your continued study, Curmudge, there’s a pretty good review of the book in Amazon. The important teaching is that these companies have found ways to make the ‘employers as integrators’ concept work.”

“A more general conclusion is Christensen’s five- to ten-year forecast regarding integrated fixed-fee (IFF) providers. ‘Where they use disruptive business models to provide better care at lower cost, they will prosper; and overall health-care costs will drop without a compromise in quality or convenience. This is because quality comes from correct integration, and lower costs come from low overheads that are enabled by focus.’ ”

“I think his examples are easier to understand than his summary. By the way, is there more to this story?”

“Actually, Julie, there is. And we should be able to wrap it up next time.”

Affinity’s Kaizen Curmudgeon

(1) Torinus, John. The Company That Solved Health Care.