There isnt much Jan Jennings hasnt seen, heard or done in his 35 years in health care.
And its that experience that helps place his consulting firm, American Healthcare Solutions, LLC, as a leader on both coasts of the United States.
“Generally, it is much easier to work from the outside,” Jennings, President and Chief Executive Officer of American Healthcare Solutions, said in comparing that status as opposed to working within the system.
“First, we only serve by invitation and are focused on one problem at a time,” he said. “Unlike most other firms, those of us with a lot of gray hair do the onsite consulting and the young people in our offices in Pittsburgh and San Diego develop quantitative tools for us to deploy in the field. More often than not, our clients are struggling in one or several ways. As a consequence, they are extremely grateful for solutions to problems that have bedeviled their organization. Providing those solutions makes our work extremely rewarding.”
While hospitals and health systems across the country face a myriad of challenges, Jennings points to three that are major obstacles.
“We used to think of patients as the haves and the have nots.” he said. “Today, hospitals themselves have become the haves and have nots. Locally (Pittsburgh), if you visit one of the marquee hospitals of the University of Pittsburgh Medical Center, the quality of the facilities, staffing and overall appearance is simply breathtaking. Many of our client hospitals are struggling to make their next payroll and have not made a significant capital expenditure in five years. The implications for patients are obvious.”
Jennings said that while his firm refers “process improvement and patient safety” to others, “we observe unbelievable opportunities to improve hospital systems.”
“One of my partners has a cartoon of a theoretical machine with 8,000 moving parts that results in a single finger to scratch a cat,” he smiled. “It is a metaphor for how many hospitals operate. Patient and employee safety is put at risk as a consequence of the obvious confusion and absence of quality systems management.”
In citing the third major challenge for hospitals, Jennings said American Healthcare Solutions finds many hospital executives “simply do not have quality information at their finger tips to make sound decisions.”
“The adverse circumstances that result are poor productivity management, wasted resources in the supply chain, missed opportunities in the revenue cycle; and most important, the safety of patients and employees are poorly understood,” he said.
Jennings agrees that many challenges are similar to all hospitals i.e., inadequate Medicare and Medicaid reimbursements, soaring costs for medications, technology and labor, and the medical liability insurance crisis. Asked if these problems are more severe for community hospitals as opposed to metropolitan or regional healthcare systems, he said:
“The major regional healthcare systems are “essential” to the private insurers. As a consequence they frequently have a reimbursement advantage in contract negotiations and more money to deploy for capital expenditures, information systems and staffing. The typical independent community hospital has little or no negotiating leverage. The implications are clear and disturbing.”
One of the advantages American Health Solutions enjoys in serving numerous hospitals, Jennings said, is “the assembling of rich data resources.”
“As a consequence, when we meet with a hospital that is struggling, we often have commanding information to help get the hospital back on track,” he said. “We only do three things — financial improvement services, strategy and leadership development. Underneath each of these three broad areas are specific programs and services to improve the overall health of the organization.”
Looking at a growing theory that the problem with health care in the United States that there is enough money for hospitals and health systems but it is being spent in the wrong way, Jennings said it is “difficult to generalize with respect to whether or not there is enough money in the system or not.”
“If you look at two of Americas dominant healthcare systems, INOVA in Fairfax, Virginia and Evanston-Northwestern Healthcare based in Evanston, Illinois, they both have advantages of location and favorable payor mix,” he said. “On the other hand, both can afford to field a management team of superb quality. We have found that the rural hospitals below 50 beds and urban hospitals in poor locations both suffer from numerous common problems. They have no negotiating strength with third party payors. Their patients are often poor; i.e., uninsured or underinsured, and many patients have chronic conditions that should have been managed earlier in a quality primary care setting. Further, their management teams are often unprepared for the problems they face and have little outside support.”
Turning to the question of balanced advertising and marketing campaigns, Jennings said it is one that “has always been perplexing” to him.
“Sometimes I marvel at the imaginative marketing efforts of hospitals and health systems that deliver a brand name message while at the same time expanding their reach with inviting and meaningful programs and services,” he said. “On the other hand, as I travel around the country and visit baseball parks and other sports venues there always seems to be a sign in the outfield that says something like Henry Ford Health System. Thats all it says. I am no expert in this area, but it strikes me that this kind of branding is frequently a waste of money. Is it possible that a baseball fan will stand up during the seventh inning stretch, read that sign and decide to never go to the Detroit Medical Center ever again? I doubt it.”
Jennings sees no quick fix to what some in the healthcare industry see as a disadvantage for smaller, community hospitals in cuts in Medicare reimbursements. They dont get medical education funding but are confronted by costs for drugs that rise just as fast as the number of senior citizens.
“If there were an easy solution, Id be out of business,” Jennings said. “However, I would suggest that the notion that the University Hospital has tremendous financial advantages over the community hospital is a myth. While the University Hospital does receive some support for medical education, they far outspend these advantages.
“The most profitable hospitals in the United States are not affiliated with teaching programs, have strong programs and services that lead to high case mix indicators/multipliers and are well managed,” he continued. “Community hospitals are unfettered by the complexities of the academic medical centers, town/gown conflicts and the academic appetite for capital that would make your head swim. However, as I said earlier, this all gets turned on its head when the teaching hospitals can build systems of multiple hospitals that give them bargaining power with third party payors. This is the biggest concern for independent community hospitals as they continue down a path of independence.”
Innovations developed by the Healthcare Information Management Systems Society (HIMSS) also draw considerable attention across the country, especially in terms of information technology, electronic health records (EHR) and the sharing of appropriate clinical information among providers. Jennings said the importance of these developments “cannot be overemphasized.”
“There are now some 200 hospitals and health systems, of over 5,000 in total, in the United States with totally integrated physician- hospital (both inpatient and outpatient) information systems,” he said. “They each come with their own strengths and weaknesses. Notwithstanding, these developments are a giant leap forward. The life blood of diagnosis and treatment is medical information. The healthcare industrys willingness to tolerate the disintegration of medical information since the advent of the computer age is almost too much to comprehend. As these fully integrated systems expand, become more affordable and a new generation of care givers demand first class clinical information systems, the quality of care in American hospital will dramatically improve.”
In a related venue, the seamless national health care information network, Jennings said most industry leaders give the Bush Administration “high marks” for putting together an Office of the National Coordinator for Health Information Technology (ONCHIT).
“That is the good news,” he said. “The office has been woefully under-funded, but it is a beginning and could take on real meaning as federal policies and funding priorities change,” he said. “In 2004 an Interoperability Consortium of national IT and consulting firms emerged to support the Office of the National Coordinator to facilitate this effort. The vision for this effort is breathtaking. The dream is that a day will come when a patient visiting on out-of-state hospital or physician will be able to authorize the access to their home physician office medical records and previous hospital medical records to support their care. I doubt I will live long enough to see this come to fruition but have no doubt that it is coming!”
Look for Part 2 of this article,
Hospitals Must Take Responsibility on Costs, Errors, in next months issue of Hospital News.
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