By James Bialke, Jody Hoffer Gittell, Jim Pruitt, and Dana Weinberg
The U.S. health care industry is at a critical juncture. Despite having some of the best clinicians and health policy analysts in the world, the U.S. healthcare industry is failing to deliver cost-effective quality care. McKinsey Global Institute found recently that even after adjusting for its higher per capita income levels, the U.S. spends some $477 billion more on health care than its peer countries per year. Meanwhile, we suffer from an epidemic of medical errors that threatens our wellbeing, even our lives, with such errors causing between 44,000 to 98,000 deaths annually, at costs of $17 to $29 billion.
Amidst these failures, we see several developments. First, we observe the emergence of evidence-based management with increasing reliance on quantitative metrics, a potentially positive development but one that introduces the challenge of choosing the right set of metrics, given the powerful impact of measurement on behavior, including unintended negative effects. Second, we detect a shift toward increased delivery of health care in outpatient settings, introducing new challenges for organizing and coordinating the delivery of care. Third, we find demographic shifts that have created new challenges for finding, developing and retaining health care workers. And finally, we note the emergence of some innovative labor-management partnerships that are striving to navigate these changes for the benefit of health care workers and their patients.1
The last decade has seen a proliferation of performance data for healthcare organizations, including consensus quality standards and patient safety indicators. Spurred by a growing interest in evidence-based medicine and in cost containment, these widely available data and expectations for their use are changing the way healthcare organizations operate. In particular, the management paradigm in healthcare organizations has shifted from favoring experience and individual knowledge to leaning on quantitative metrics and systematic data. The impending move by the Centers for Medicare and Medicaid Services (CMS) to “pay for performance” will likely further ingrain these trends, which herald new opportunities for improving healthcare but also new challenges. The rise of evidence-based medicine and management signals a break from tradition and a willingness to embrace demonstrated best practices; implemented correctly, this development could represent a boon to quality-improvement efforts.
There is a gap between having data and using it to achieve performance goals, however. First, the ability to use data effectively in decision-making is not an innate skill, and most managers and administrators in healthcare have little to no preparation in this area. Today, effective healthcare management requires training in research methods – formulating empirical questions, gathering appropriate data to answer them, interpreting the data, and reaching reasonable conclusions based on the (often mixed) evidence. Without this knowledge, managers are likely to rely on intuition and anecdote, even when a large body of data is available. Another gap concerns the data itself. Sometimes the metrics that prove simplest to collect or standardize across organizations also provide only limited information about what we want to measure. In data-driven decision-making, groups risk performing to a given set of metrics and, in the process, redefining their initial goals to suit the data.
Coordination of Care
The Institute of Medicine recently identified coordination as one of the most critical problems plaguing the U.S. healthcare system. A recent study by the Commonwealth Fund found that the most common quality problems reported by physicians were related to problems of coordination. Coordination of care is challenging because healthcare is complex, with high levels of specialization that are driven – perhaps inevitably – by the complexity of the human body, the human mind and the social world in which we live. But coordination is even more challenging given trends toward shorter hospital stays and increasing outpatient care. Our research has found a high level of fragmentation across different providers working with the same patient – and the lack of a clear system integrator.2 Our research also shows that most often the patient or family member plays the role of system integrator not by design, but by default. A number of possibilities have been offered to fill this gap – including a better-reimbursed primary-care provider, a case manager employed by the payer, and a “medical home” model – but practitioners and researchers are still divided regarding the best solution.
Development and Retention of Health Care Workers
By 2030, the boomers who begin retiring in 2008 will have made the U.S. population older than Florida’s population is today. Over the next few decades, the aging of the population will loom as one of the major human resources issues in the U.S., and joint efforts of health care providers and unions are likely to be a major part of the solution. In one innovative effort, Kaiser Permanente and its unions established a joint education trust fund to provide for employee education, and then established a joint partnership with a community college in Oregon to train existing employees to become registered nurses. The selection process for employees into this program involves criteria such as managerial assessment and the employee’s prior educational background and educational performance, including grade point average. Two of the participating unions – SEIU and American Federation of Teachers – are involved in the final selection of employees into the program. Kaiser Permanente pays for tuition, books and 20 hours of class and/or study time per week. In return for acceptance into this program, employees commit to remaining with Kaiser Permanente for two years upon completion.
Though labor-management cooperation seems to rise and fall from prominence in the public eye, we have many examples of deliberate and sustained efforts by unions and employers to solve critical health care problems. Long-established and well-studied partnerships at Kaiser Permanente and at New York City Hospitals, for instance, continue to attract attention. Back in the mid-1990s, workers and managers came to the Twin Cities in Minnesota to study newly emerging labor-management partnerships. A few years later, the Twin Cities work collapsed, but the experience helped to shape labor-management efforts elsewhere, including at Kaiser Permanente, at New York City Hospitals, and at Group Health in Seattle.
There are other notable partnerships as well. The American Federation of Government Employees works continually with the Veterans Administration to improve quality outcomes in a system that is under tremendous stress. Michigan Nurses Association continues its work with the University of Michigan Hospital and Sparrow Hospital. SEIU Healthcare Minnesota (formerly SEIU Local 113) just concluded a new four-year agreement that includes a Strategic Alliance partnership that borrows heavily from the Kaiser agreement. If brought together for comparative analysis, these experiences have the potential to help us learn how to sustain and support the delivery of quality health care.
But these partnerships are not the only places that labor, management and healthcare converge. Recent contracts between the United Auto Workers, General Motors and Ford, for example, resulted in huge shifts of both financial and operational responsibility for health insurance that covers thousands of workers. Some years earlier, United Steelworkers reached similar agreements. Groups such as the Labor-Management Health Care Coalition of the Upper Midwest have brought together the managers of Taft-Hartley (multi-employer) health plans to find solutions to ever-increasing costs and growing demands on resources.
One final example of partnership work is the new Partnership for Quality Care (PQC) developed by a number of large health care providers and the SEIU (see www.pqc-usa.org). This group is focused on issues such as chronic disease management, cost-effective and efficient care aimed at achieving better outcomes, and health care reform that will guarantee coverage to all Americans. This group was formed consistent with the Labor Management Cooperation Act of 1978 and is continuing to expand its membership.
Upcoming Health Care Industry Council Events
HCIC is reaching out to industry leaders and practitioners to increase participation, particularly on the four issues described above. Readers are encouraged to contact any of the HCIC co-chairs with ideas for how the HCIC can bring value to the health care industry and its many stakeholders. The HCIC co-chairs are also available to make presentations to local LERA chapters or health care industry organizations on a range of issues including those discussed above.
At the 2009 LERA Annual Meeting in San Francisco, HCIC will co-sponsor a session on Sunday, January 5th called “Meeting Today’s Health Care Challenges through Innovative Employment Relations and Information Technology.” On Monday, January 6th, HCIC will host a panel discussion called “Bargaining for Benefits: Wellness as a Win-Win Strategy,” featuring Bonnie Summers of Blue Cross Blue Shield, Jim Pruitt of Kaiser Permanente, James Bialke of SEIU, and a participant from Dean Ornish. The panel will address the potential for wellness plans to reduce the costs of traditional medical benefits. Academics and practitioners are invited to both events.
1. This article is based on a panel discussion hosted by the Health Care Industry Council at the 2008 Annual Meeting of the Labor and Employment Relations Association (LERA).
2. Weinberg, D.B., R.W Lusenhop, J.H. Gittell, C. Kautz (2007). “Coordination between formal providers and informal caregivers,” Health Care Management Review, 32(2): 140-50. Gittell, J.H., F. Hagigi, D.B. Weinberg, R.W. Lusenhop, C. Kautz (2008). “Modularity and the coordination of complex work,” Working Paper.
James Bialke (email@example.com) is assistant to the president, SEIU Healthcare Minnesota. He is labor co-chair of the LERA Health Care Industry Council.
Jody Hoffer Gittell (firstname.lastname@example.org) is associate professor of management and MBA program director at the Heller School, Brandeis University. She is academic co-chair of the LERA Health Care Industry Council, and the author of a forthcoming book titled High Performance Healthcare.
Jim Pruitt (email@example.com) is director of labor relations at Kaiser Permanente National Functions. He is management co-chair of the LERA Health Care Industry Council.
Dana Weinberg (firstname.lastname@example.org) is assistant professor of sociology at Queens College, City University of New York. She is academic co-chair of the LERA Health Care Industry Council.