Ezekiel Emanuel, M.D. chair of the Department of Medical Ethics and Health Policy at the University of Pennsylvania and a former adviser of health policy to the Office of Management and Budget (OMB) during the implementation of the Affordable Care Act (ACA), spoke with conviction on the direction needed to curb spending in healthcare in front of a packed crowd at the Digital Health Conference in New York City.
The Digital Health Conference, the annual event of the New York eHealth Collaborative, a collaborative nonprofit that implements statewide health information exchange (HIE), is being held this week at Chelsea Piers in Manhattan.
Emanuel, a famed author as well as the brother of Chicago Mayor and former White House Chief of Staff Rahm Emanuel, told conference goers about the direction medical centers and hospitals will have to take to curb spending, gain efficiencies and improve care, as the ACA takes further effect. The ACA, he said, will force hospitals to change the way they practice care and operate due to reimbursement cuts and consumer choices in health plans. Those that don't adapt their business model, he said, will have a hard time staying in business.
It's important for these provider organizations to look to where the money is being spent, Emanuel said. He specifically noted that 83 percent of health spending is made up of people chronic illness and most of the spending is done at hospitals. His solution for hospitals to improving quality and saving money is tertiary prevention for people with chronic illnesses. This comes through five different practices, which he laid out to the crowd.
For this tertiary prevention to be done, he said there needs to be an improved method of monitoring quality. The outspoken Emanuel called the U.S. News and World Report's annual ranking of hospitals, "utter total crap." "We need a better way to measure quality. We will have a better way. The big institutions...they care about quality. They need a way of justifying higher costs," he said to the crowd.
Emanuel's next said hospitals will have to adhere to the 80-20 rule, whereby different institutions will have to focus on different specialties to maximize efficiency. Commodity care, he said, doesn't need to take place in a high-end medical center.
The third practice to save costs and implement effective tertiary care was the adherence of lean principals. He said it's effective in ensuring that everyone's view, from the janitor to the department chief, is counted into improving efficiencies within the organization.
Emanuel then talked about the importance of providing VIP care to the chronically ill. "The key here is standardizing care based on professional guidelines, focusing on team-based care, using electronic health records to get the team on the same page, and shifting sides of care out of the hospital, and using digital and telemedicine to the max," Emanuel said.
Emanuel went into detail about each element of this VIP care, in particular telemedicine, which was his fifth practice for effectively implementing tertiary care prevention and lowering costs. Emanuel said that telemedicine will move care out of the hospital, decrease hospitalizations, ER visits, hospital-acquired infections and falls, and readmissions rates, and increase physician productivity. It will also be cheaper, he said.
"We're going to move. Hospitals are going to decrease of this," Emanuel said. "The hospital won't be the locust of care that it has always been." In the future, he predicted that because of this changing model, many hospitals will convert to outpatient facilities. Those that stay in business will become significantly leaner.
He noted that technology itself cannot bring about this change. Emanuel said that a value-based reimbursement system--with capitation, bundled payments, and two-sided risk--is needed to give high quality, low cost care a business model. "If we really want the digital medicine of the future, we're going to have push hard on payment reform," he said.
Earlier in the keynote, Emanuel talked about the progress of the Affordable Care Act. He pointed to lowered readmission and hospital-acquired infection rates, a decreased rate in health spending, and a 4.6 percent drop in the uninsured as hallmarks of its success. He also cited a survey of hospital executives, which reported that a majority believe the U.S. healthcare system will be better in 2020 than it is today.