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News | Strategic Planning

Annual Conference Day 3: Former VA Secretary David Shulkin explains what the healthcare industry can learn from a government agency

News | Strategic Planning

Annual Conference Day 3: Former VA Secretary David Shulkin explains what the healthcare industry can learn from a government agency

  • At HFMA’s Annual Conference on Wednesday, David Shulkin, MD, former secretary of the Department of Veterans Affairs, said some of the VA’s strategies would serve the healthcare industry well if implemented in the private sector.
  • Benefits of the VA’s approach can be seen in areas such as patient access and population health management.
  • Among many other noteworthy sessions Wednesday were presentations on telehealth, rolling forecasting and centers of excellence.
  • HFMA's 2022 Annual Conference is only 7 1/2 months away.

For David Shulkin, MD, the transition from private-sector healthcare administration to public service was different than he’d expected.

When Shulkin went to the U.S. Department of Veterans Affairs, first as under secretary of Health during the last two years of the Obama administration and then as the department’s ninth secretary for a 13-month stretch during the Trump administration, he thought he’d get to apply the lessons gleaned from his stints in the C-suite of several health systems.

“When I went to the VA, I was going to come and I was going to teach them how to do healthcare,” Shulkin said during a keynote session Nov. 10 at HFMA’s Annual Conference in Minneapolis.

“It actually turned out to be the opposite. I learned so much in government that we in the private sector can learn from.”

He said he’d understand if attendees are skeptical about whether a public agency with a reputation for bureaucratic entanglement can serve as a guide for private-sector innovation.

However, “If you take a look at the VA and you take a look at what its results are — its population health approach toward improving the lives of people and improving health and wellness — it actually is a pretty remarkable system.”

He added, “There really are some potential advantages to having a closed, integrated healthcare system.”

The VA significantly outperformed providers of care for commercial health insurance beneficiaries in a number of 2017 process and outcome measures as gauged by HEDIS (e.g., medical assistance with smoking cessation, screening for breast and colorectal cancer, blood pressure control).

Shulkin discussed a number of the lessons he drew from his time at the VA. Although many of his ideas aren’t directly in the control of hospitals and health systems, all could improve healthcare if incorporated industrywide.

A few examples:

Focus on access. To address the wait-time crisis that plagued the VA around 2014, Shulkin granted independent practice authority to nurse practitioners. He received 450,000 calls, messages and other contacts in response to his decision, with reaction split between support and opposition.

“While it was controversial, I absolutely believe that was key to us beginning to solve the access problem for our veterans,” Shulkin said.

Shulkin also persuaded President Donald Trump to allow the VA to use telehealth across state lines. He implemented transparency by posting wait times for all VA facilities. In the biggest step, he required that same-day access to VA facilities be implemented.

Reach for big goals. With a $265 billion budget, the VA is second-largest federal agency behind only the Department of Defense.

“People say, ‘How could you make change? It's too big.’ I actually found that it was easier to reach for big change rather than incremental change,” Shulkin said.

For example, Shulkin requested analytics on the prevalence of hepatitis C among veterans and learned that there were about 167,000 cases. He asked for, and received, $1.5 billion from Congress to tackle the problem, and tasked VA facilities with contacting every veteran who had the infection to try to get them started on effective new drugs.

Today, the incidence of the disease among veterans is under 10,000, almost all of whom declined treatment.

“That, to me, is population health,” Shulkin said. “That's how you go out and proactively identify something [where] we can make a difference and be able to improve the quality of people's lives, prevent liver failure, liver transplants, the costs associated with that.”

Remove silos. With no barriers in the form of third-party payers, the VA worked to integrate primary care with behavioral healthcare. “When you go and you see your primary care physician in the VA, you actually see a team of people,” Shulkin said. “And so the primary care doctors work with the psychologists and the psychiatrists and the social workers and the pharmacists and other people in the same office suite on the same floor. It's not a referral where you need to go across town or to a different building to see somebody in mental health.”

Breaking down silos also means bringing care outside the hospital or doctor’s office and into the community. The VA has mobile health units that take clinicians to veterans’ homes as well as to shopping malls and office buildings.

“It’s not that same institutional environment,” Shulkin said.

Tele-EP: A payment and care delivery system that supports the diagnostic process

“I'm here today because I need your help,” said Annemarie Sheets, MD.

“I want to see this program become a reality, and that requires collaboration and financial expertise,” she added, referring to the concept of a full-fledged tele-EP (emergency physician) model.

Key features are high-level triage followed by a rapid evaluation by an emergency physician, along with facilitated medical communication that includes patients in the decision-making process, Sheets explained during her presentation in the Consumerism track Wednesday at HFMA’s Annual Conference.

“Tele-EP translates, organizes and interprets the patient's health problem into a formal medical document, enhancing doctor-patient communication and improving collaboration between physicians,” said Sheets, who previously launched MD at Bedside, an urgent-care house-call practice.

An overarching goal of tele-EP is to improve the diagnostic process and reduce diagnostic errors in emergency medicine, Sheets said. The stakes are high, with data showing that changes in the price and intensity of emergency services added up to a $58 billion cost increase between 1996 and 2016.

“Tele-EP will reduce diagnostic error by distributing the cognitive workload and forming a diagnostic team,” Sheets said. “Tele-EP approaches the diagnostic process as a team involving the patient and subsequent clinicians. The patient is central, and more often than not, the diagnosis can be determined by history alone.”

Sheets views the model as something that “enhances rather than disrupts current systems.” She said she welcomes feedback and collaboration from finance professionals as she works to implement the concept.

“This is definitely something that is going to take a lot of effort and a lot of people working together,” she said.

Rolling forecast model arrives as pandemic strikes at North Mississippi Health

North Mississippi Health Services in Tupelo implemented a rolling forecast model as the pandemic began, giving the seven-hospital health system financial-planning data at a time when it was desperately needed.

The model was ready to go as a result of pre-pandemic planning designed to give the health system more flexibility and the ability to control the controllable, tapping into a new decision support department, said Sharon Nobles, CFO, in a session in the Leveraging Data and Analytics track. North Mississippi Health fully integrated the rolling forecast capabilities into its budget process rather than having a rolling forecast segment of the budget.

Once the pandemic was in full swing, the system’s new model forecast that it would lose $28 million a month if it did nothing, important information to have amid the early uncertainty of the COVID-19 crisis.

“Clearly this is something we could not tolerate, and we had to take decisive action regarding the cost structure,” Nobles said.

Nobles’ colleague, Adam Crouch, FHFMA, director of decision support, said North Mississippi Health’s rolling forecast model has three main parts. The first phase entailed creating a data governance structure to define budget categories and other variables.

Also, for consistency’s sake, key statistics needed to be chosen for their ability to tell the financial story of the system’s performance.

Finally, the model required the application of a strategic process looking at issues such as how external pressures will affect cost structure and volumes.

— Paul Barr, HFMA senior editor

Centralizing care models reaps financial and clinical benefits at Providence Heart Institute

Faced with a capital need that exceeded its available funds, Providence Heart Institute in Washington state restructured its operation, creating both clinical and financial benefits.

Matthew Ducsik, associate vice president of the institute, said that with $15 million in capital needs and just $4 million available, drastic changes were required. Being part of the large Providence health system gave the institute access to high-quality tools as well a level of cushion that allowed it to question the status quo, he added during a presentation in the Cost Effectiveness of Health track.

Instead of having two underperforming facilities and one strong performer, Providence Heart Institute centralized the programs in a single center of excellence with one chief of surgery.

All surgeons were credentialed at each affiliated hospital in the organization’s Puget Sound service area, and common standards and metrics for quality and affordability were adopted.

Other aspects of the restructuring included an integration of services to create a seamless experience and engagement of payers as partners.

Ducsik said in hindsight, the revamp sounds a little more seamless than it actually was, telling attendees that “the outcome might be beautiful, but the process may not be.”

— Paul Barr, HFMA senior editor

Looking ahead

HFMA’s 2021 Annual Conference has ended, but the 2022 conference in Denver is less than eight months away. Mark your calendars

About the Author

Nick Hut

is a senior editor with HFMA, Westchester, Ill. (nhut@hfma.org).

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