Observation Deck: The Twain Shall Meet

Conventional wisdom says that clinicians are clinicians and contracting professionals are contracting professionals, and never the twain shall meet. But forward-thinkers have always recognized that attitude as short-sighted.

Sure enough, while researching and reporting this issue of the Journal of Healthcare Contracting, which contains features on the “10 People to Watch in Healthcare Contracting” as well as reports from the VHA and Premier conferences, we kept bumping up against the conventional wisdom. We found ourselves talking to people who simply don’t buy it, and who are actively taking steps to bury it.

Two factors are driving them to do so: the desire to improve care and the desire to lower costs.

As Joane Goodroe of Goodroe Healthcare Solutions says, “There’s a realization that there is a finite amount of money [for healthcare].” That realization is forcing clinicians and administrators (including contracting professionals) to come together to work out ways to cut costs.

Forward-thinkers have always understood that if contracting professionals and administrators focus solely on cutting costs, the clinical staff will mistrust them. “We found that quality and improved patient outcomes had to be essential to the value analysis process,” says Angelo Griego, R.N., chief nursing executive for Lake Region Healthcare Corp. Fergus Falls, Minn.

The problem has been proving that by focusing on the big picture – patient satisfaction and outcomes – hospitals can also lower costs. “Models to track the financial impact of [performance-improvement] projects have been scarce and their business impact far from clear,” say the authors of the VHA monograph “Building a Financial Case for Clinical Improvement.” But with today’s improved data-gathering techniques, as well as a desire on the part of the finance and clinical sides of the house to work together, that’s changing. For example, VHA has introduced a simple electronic worksheet that can help providers determine the bottom-line impact of performance-improvement initiatives.

The news from Premier’s pay-for-performance demonstration project with the Centers for Medicare and Medicaid Services is just as dramatic: If healthcare providers practice good medicine consistently, they can drive down costs, not to mention mortality and morbidity. “Better care can indeed improve affordability,” said Arnold Milstein, medical director at the Pacific Business Group on Health, and a member of the Medicare Payment Advisory Commission.

Again, forward-thinkers have always recognized that mistrust between clinicians and administrators contributes to bad medicine and bad finances. It’s good to hear them speak out about it. Listen to these comments from a couple of the “10 People to Watch”:

  • “I have a fervent belief that the supply chain has been undervalued as a core strategy for organizations to improve their performance and the care delivered at the bedside. There’s an unending amount of opportunity.”
    – Chris Meyers Janda,
    Fairview Health Services, Minneapolis, Minn.
  • “As you begin to marry item-usage data with outcomes data, then embed that in your clinical order sets and protocols, you create an optimal process for delivering patient care.”
    – Lou Fierens,
    Trinity Health, Novi, Mich.
  • “It would be very easy to get pumped up: ‘We’re going to save this money, cut these hospital expenses, leap tall buildings in a single bound, etc.’ But what’s right with healthcare procurement, as I’ve seen it, is the focus on patient outcomes. What can we do better to improve patient satisfaction?”
    – Jack Fleischer,
    New York-Presbyterian Hospital, New York

With attitudes like these, and the data to back them up, we could be entering exciting times in healthcare.

Mark Thill About Mark Thill

Mark Thill is the Editor of The Journal of Healthcare Contracting and has been reporting on healthcare supply chain issues since 1985. He is a graduate of Dominican University in River Forest, Ill., and he received a master's degree in journalism from Northwestern University in Evanston, Ill.

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