The Institute for Healthcare Improvement (IHI) is focused on improving the quality of health care. Finance plays a critical role in achieving this goal, says Maureen Bisognano, IHI's president and CEO. A tireless advocate for change, she recently shared her views on why hospital and health system CFOs should sit at the table with CEOs and clinical staff to discuss new ways to improve health care.

Q.The healthcare industry is challenged to reduce costs while improving the quality of care. What is the unique role of finance in helping hospitals overcome this challenge? What are some key characteristics of organizations that are successfully driving down cost while improving quality?  

A. The CFO's role is critical in accomplishing the two simultaneous challenges of improving quality while reducing cost. We need to take a page from the book of other industries where the CFO's role is typically what I would call an integrator. Those CFOs are playing a role in bringing together people from different parts of the organization and acting as translators and stimulators to get people to think creatively. CFOs are in a unique place to both see outcomes of care and understand the cost of those outcomes. Because CFOs can appreciate good quality and assess the impact of defects in care, they are in a wonderful place to help others understand the cost differential between higher quality, higher value care, and the costs that healthcare organizations sometimes endure when lower quality exists. CFOs are pivotal.

As for key characteristics of organizations that are succeeding in this area, one is that the CFO is always at the table whenever there is a conversation about quality. Another characteristic is that the CFO has developed his or her staff so that they understand how they can be most helpful when attending quality meetings with leaders throughout the organization-whether it's operational meetings where leaders are talking about how best to eliminate waste from administrative processes, interdepartmental meetings where leaders are identifying wastes that happen between departments, or clinical meetings where nurses, physicians, and pharmacists are discussing overutilization or the costs of defects in care.

CFOs, CEOs, and clinical leaders have worked effectively together for some time using certain skill sets and certain methods and process priorities that may not always bring forward the quality issues and strategies that need to be discussed. Health care's clinical and administrative leaders need new skills, new ways to work together, and new ways to look at care across the continuum. The more leaders head in that direction, the more they'll be able to improve quality and drive cost down.

Q.The healthcare industry is increasingly focusing on transitioning from fee-for-service payment to value-based payment. What are some of the challenges to changing to a value-based business model, and how can healthcare finance executives help their hospitals overcome these challenges?  

A. As I travel throughout the United States, I hear a lot of conversations about changes in payment systems as a result of healthcare reform. I hear a lot of people talking about bundled payments, but they're not talking about bundled care. The key to success will be having the finance person-the CFO-lead a conversation with administrative and clinical folks alike about bundled payment and then ask, "What does that drive us to do in terms of bundling care?" Answering that question will require us to begin to look at care across the continuum.

That conversation should examine how we can make sure that the electronic health record from the physician's office is in the hands of the providers when a patient is admitted so that tests are not duplicated and results are transmitted immediately to clinicians in the hospital who need those results for inpatient diagnosis and treatment. The conversation also should explore how we can eliminate duplication in the hospital and how we can make sure everybody has the information they need. Partnering with the patient and family in those care decisions will be critical. In addition, we need to understand how to link the discharge plan all the way back into the community with home health, nursing home, hospice, or primary care. All of that bundling of care is going to be critical to accomplishing the financial and quality results that we seek under bundled payment.

Q.Given that Congress is divided along partisan lines, what does the federal government need to do to drive value?  

A. As we heard in the State of the Union address earlier this year and in the responses to that address, there are some areas where we have agreement and some areas where the law needs to
be tweaked. Most important from my perspective is that there are certain things that everybody agrees upon. We should start to work on those.

One area that we could work on immediately is decreasing hospital-acquired infections. They are costly in human terms, they are costly in dollar terms, and we now have the ability to eliminate those infections. At the Institute for Healthcare Improvement, we have been working for eight or so years on how to prevent these kinds of complications for patients. Preventing often serious and avoidable infections is obviously better for patients and the healthcare system, and it drives down cost.

Another area that we could work on immediately is decreasing preventable readmissions to hospitals. Up to 30 percent of patients are readmitted within 30 days of discharge. The reason for that high readmission rate is largely a failure of the healthcare system to connect with patients' needs upon discharge from the hospital, to ensure that there's a caring system in place in the community. By reducing these readmissions, we can prevent the pain and trauma for the patient and the patient's family of experiencing a second hospitalization unnecessarily. But there is also tremendous avoided cost in getting patients into sure hands back in the community, and then helping them to stay out of the hospital and thrive.

A third area to work on is access. We now have many more patients entering the system through increases in the insurance rolls. Yet we have not effectively redesigned primary care to be able to take those patients in and begin the kind of prevention and primary care that they so desperately need.

We have made some progress on reducing infections, readmissions, and improving access-in some places. By spreading these solutions to more settings, we could provide much better patient care at a lower cost. In addition, we need innovations in the healthcare system. The current models and designs are too costly and do not provide the absolute promise of highest quality uniformly across the country. So infections, readmissions, access, and then a great opportunity to innovate and create some new models of care are areas that we can begin to work on immediately to drive value.

Q.Consumers are an important component of effective quality initiatives and play a key role in driving value. What are some of the areas that organizations can focus on to ease the transition to value-based payment for patients and obtain their buy-in? What types of incentives or models need to be in place to engage patients and their families in the role they need to play to drive value?  

A. Patients do not need to be incentivized. They need to be invited. Currently, our care processes are rushed and fragmented. A physician often spends only 10 or 12 minutes with a patient in an office visit and may not have the time, or the information on hand, to have a real conversation with the patient about options in a treatment plan. For example, a physician may prescribe a particular drug for a patient, who, upon arriving at the pharmacy, finds that the drug is too costly. Because the physician lacked drug cost information when writing the prescription, the physician and patient could not have a conversation about options. A part of the new design we need is information in the right place at the right time. Physicians need that drug cost information in their office to have effective and timely conversations with patients.

The same is true when a patient is being discharged from a hospital. The nurses and physicians often follow standardized processes to send patients home. But we have no such standardized process for receiving patients in the community. As a result, the primary care physician may not know for days or even longer that the patient has been hospitalized or what the patient orders were upon discharge. This gap of knowledge and information often leads to duplicated tests and treatments.

With new tools, new data, and redesign of some care processes, we can build in the time to have meaningful conversations with patients and their families about choice. Research shows that when those conversations take place, patients make better decisions for themselves, and most often costs drop.

Q.How can health care overcome physician skepticism about performance measurement and engage physicians in reporting and analyzing clinical quality?  

A. I see a small amount of skepticism, but I see big amounts of interest, intellectual curiosity, and inspiration, so I am very encouraged here. When a physician looks at a report, he or she wants to know, "Are these data accurate? Do these data reflect important things in the delivery of care? And do these data reflect aspects of care that I can change?" When we give physicians reports about metrics that are meaningful to their practice, I see lots of curiosity and interest in engagement. It is important to sit with groups of physicians with these data and ask: "Are these data accurate? Are they meaningful? Is the metric something I can do something about? Would patients care about this? At the end of the day, could I improve quality and drive down cost?" Physicians are excited about sharing those kinds of data and being transparent, because the data give them a clear pathway to improvement and innovation. I think they see that as much as we all do.


QA_bisognano_130Maureen Bisognano is president and CEO of the Institute for Healthcare Improvement (IHI) (, an independent not-for-profit organization that works with healthcare providers and leaders throughout the world to achieve safe and effective health care.

Previously, she served as IHI's executive vice president and COO for 15 years. She is a member of the Institute of Medicine of the National Academy of Sciences and the Commonwealth Fund's Commission on a High Performance Health System. She is also an instructor of medicine at Harvard Medical School and a research associate in the Division of Social Medicine and Health Inequalities at the Brigham and Women's Hospital.

Prior to joining IHI, Bisognano was senior vice president of the Juran Institute, where she consulted with senior management on the implementation of total quality management in healthcare settings. Before that, she served as CEO of the Massachusetts Respiratory Hospital in Braintree, Mass., where she implemented a hospitalwide strategic plan that improved quality of care while reducing costs.

Bisognano began her healthcare career in 1973 as a staff nurse at Quincy Hospital in Quincy, Mass. While at Quincy Hospital, she also was director of nursing (1981-82), director of patient services (1982-86), and COO (1986-87).

Publication Date: Friday, April 01, 2011

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