Zeke Emanuel: 5 strategies hospitals need to survive

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Twenty percent of hospitals will close by the end of the decade, predicted bioethicist Ezekiel “Zeke” Emanuel MD, PhD, during a keynote address at the Boston Children’s Hospital Global Pediatric Innovation Summit + Awards.

How can hospitals make the cut and stay alive? The only way is to deliver high-quality, low-cost care that elicits patient allegiance, said Emanuel, a former health advisor to President Barack Obama, the chair of the Department of Medical Ethics & Health Policy at the University of Pennsylvania, and the author of Reinventing American Health Care.

Making bold predictions is hazardous, Emanuel acknowledged. But, he joked, “We can do better than dart-throwing monkeys.” To outperform the monkeys, he called on some data.

If the $3 trillion U.S. health care system were its own country, it would be the fifth largest economy in the world—so more money is not the answer. “We don’t need another dime,” Emanuel said. Instead, hospitals need to spend smarter. And to do that, they need to better understand patients, health policy and economics.

Show me the money
The key to affecting change and containing costs is focusing on patients with chronic conditions like asthma, diabetes and cancer, Emanuel said. He cited two data points to back this statement up:

  • 10 percent of patients consume two-thirds of health care spending
  • 84 percent of health care dollars are spent on chronic conditions

Improving quality and reducing costs, Emanuel said, hinges on tertiary prevention—retaining patients with established chronic illnesses and keeping them healthy.

5 things hospitals need to survive
Emanuel offered five key survival strategies for academic medical centers:

  1. Find better ways to measure and prove quality.US News & World Report rankings are the worst way to assess quality,” Emanuel said. The Affordable Care Act will drive competition on meaningful quality measures, he added. Meaningless measures like reputation surveys and inventories of high-cost equipment will be replaced with meaningful metrics like readmissions and preventable errors.
  2. Follow the 80-20 rule. The majority of health-insurance buyers opt for lower-tier plans. “Hospitals can’t survive on gold and platinum levels,” Emanuel said. “Providers have to be included in lower-tier networks.” That means offering high-quality care at a price point that competes with community hospitals for the bread-and-butter conditions — like simple surgery, ear infections and asthma — that comprise 80 percent of health care costs.
  3. Go lean. Adapting and scaling lean processes reduces costs substantially and gets everyone from department heads to janitors working on same page, Emanuel said.
  4. Provide VIP care for the chronically ill. What’s VIP care? Standardized care, team-based care, HER defaults for the team and, most importantly, shifting care out of the hospital. “Digital [technology] and telemedicine mean fewer unnecessary tests and faster recovery,” Emanuel said. “This is an area that is going to explode.”
  5. Focus on service. Do something about excessive paperwork, long wait times and rude staff. Academic medical centers now have to compete with CVS for patients, Emanuel said. “You need to focus on patient allegiance.”