New center seeks to find ways to deliver more health per dollar

Steve Fisch

Starting in August, Arnold Milstein, director of the new Clinical Excellence Research Center, will be overseeing small multidisciplinary health-care ‘SWAT’ teams of faculty and postdocs that aim to redesign how certain services are delivered.

"We don’t tell General Motors how to make cars, so don’t tell us how to run our hospitals.”

That’s what an angry hospital administrator told Arnold Milstein, MD, co-founder of the Leapfrog Group, a consortium of the nation’s largest corporations, when it required Atlanta-area hospitals to implement three patient safety standards as part of a 2001 national initiative to reduce expensive hospital errors and improve their employees’ health.

Milstein’s new safety “leaps” specified that all non-rural U.S. hospitals add computerized warnings to alert physicians of potential order errors; refer complex elective medical procedures to hospitals offering the lowest complication rates; and ensure that a specialized critical care physician was directing care in each intensive care unit for a minimum of eight hours daily.

Armed with advice from a group of safety researchers and an Institute of Medicine report estimating that 100,000 Americans died annually from in-hospital errors, Milstein, who is now a professor at the Stanford School of Medicine, succeeded in mobilizing Fortune 500 corporations to reframe America’s hospitals as “mission-critical suppliers.” The companies told hospitals that if the new standards weren’t met, they would advise their employees— most of whom were insured by the companies — to seek care elsewhere.

Many hospitals initially pushed back.

“I became the target of edgy public sarcasm at national hospital conferences,” said Milstein. “But we felt strongly that these three patient safety rules were the seatbelts and airbags of hospital care. They simply made good sense and were worth fighting for.”

Milstein’s persistence paid off. Subsequent research by scholars at Harvard showed that patient outcomes improved significantly at U.S. hospitals that adopted Leapfrog safety standards.

The medical world took note. Milstein had changed the ground rules of the U.S. health-care system, blazing a trail soon to be followed by Medicare. Indeed, as a congressional advisor on Medicare, he was the first to propose the policy that stopped hospital payments for the additional costs of treating preventable errors, such as patient falls or certain worker-spread infections.

“Dr. Milstein and Leapfrog were transformative in American medicine. Prior to the Leapfrog standards, no one was willing to draw a line in the sand and say these things are important; they save lives and need to be used,” said Peter Pronovost, MD, PhD, medical director of the Center for Innovations in Quality Patient Care at the Johns Hopkins University School of Medicine. “No doubt the Leapfrog standards saved lives, and they also ushered in a era of accountability. Though health care still has a way to go, Dr. Milstein’s courageous leadership started us down the path.”

The CERC comes to town

Milstein came to Stanford after two decades of improving health-care value in the private sector and advising the White House and Congress on Medicare policy. Since July 2010, he has been quietly laying the groundwork for Stanford’s new Clinical Excellence Research Center. CERC will train the next generation of health-care innovators to mend the inefficiencies that ail the U.S. health-care system.

The center’s goal: to bring scientific discipline to the design of health-care delivery, developing new care models that lower the complexity and cost of delivering health care, while simultaneously improving clinical outcomes and the patient experience.

“National prosperity depends on clinicians delivering much more value per dollar of health spending,” said Milstein, who often compares the transformation needed in health care to what is now under way in the auto industry.

Stanford’s decision to invest in the science of health-care-value improvement is well-synchronized with looming health-care reforms mandated by the 2010 Patient Protection and Affordable Care Act. Central to the new law are carrots and sticks to motivate health-care providers to become more efficient, less fragmented and more accountable. And Stanford — by building CERC research teams of young engineering, management and medical scientists — hopes to become a go-to source for higher-value health-care delivery models.

The new law contains diverse cost-reduction and quality-improvement incentives. Think of it as offering many X-Prizes for improving health-care value. There are bonuses for hospitals that show improved outcomes for heart failure, pneumonia and surgery. There are financial penalties for those with high rates of worker-spread patient infections. And there are incentives for clinicians and hospitals to set up “accountable care organizations” to lower annual per-capita health spending growth and improve health for large populations.

In addition, several billion dollars in government grants will fund comparative-effectiveness research, in which current treatments or treatment-delivery methods are compared head-to-head to determine which is more effective. CERC research teams will both compete for this funding and incorporate comparative-effectiveness findings from other researchers into their new care models.

Milstein’s new center will start by forming small health-care SWAT teams of multidisciplinary Stanford faculty and postdoctoral scholars, who will follow the same needs-finding methodology that has helped the Stanford Biodesign Program become a leader in medical device innovation. But instead of designing devices, they’ll analyze high-cost health conditions from onset to end game, then design, demonstrate and disseminate better, less costly ways to deliver care to patients.

It is anticipated that some of the new CERC postdoctoral scholars will be supported by training grant funds from Spectrum, which oversees Stanford’s Clinical and Translational Science Award from the National Institutes of Health.

“CERC represents one very important component of a new pan-university effort to focus on and better coordinate programs in the broad area of population health sciences to identify innovative strategies to improve the health care of the country,” said Harry Greenberg, MD, the medical school’s senior associate dean for research and Spectrum’s director. (Other components of Stanford’s population-sciences effort are the hiring of Steven Goodman, MD, PhD, in the newly created position of associate dean for clinical and translational research, and the work of John Ioannidis, MD, DSc, who was recruited last year to lead the Stanford Prevention Research Center.)

Going to Boeing

A good example of the types of care models that CERC will be developing is illustrated by a pilot study recently completed by Milstein and colleagues for Boeing Co.

This trial set out to test whether strengthening up-front primary care services for Boeing employees suffering from severe chronic illnesses would reduce downstream expenses for emergency room visits, unplanned hospitalizations and missed work days. Milstein had designed the new intensified care model with a national research team of engineers, managers and clinicians. It was funded by the Robert Wood Johnson Foundation and the California HealthCare Foundation.

At the end of an initial 12-month, 700-patient pilot study, overall annual health-care cost of participants’ care dropped by 20 percent, hospital admissions dropped 28 percent and patient-reported sick days dropped 57 percent. Pilot study findings were disseminated via the policy journal, Health Affairs.

To launch the study, Milstein partnered with three Puget Sound clinics to build chronic care teams staffed with primary-care physicians, specially trained nurses, pharmacists and behavioral-health specialists. These clinics were paid a $50 to $100 monthly care intensification fee in addition to primary care fees. Boeing employees and spouses with unstable chronic illness were invited into the program after being identified through employee self-referral, physician referral and analysis of Boeing’s health insurance data. (Chronically ill employees and their spouses, who comprise 10 to 20 percent of those insured by U.S. employers, account for the majority of annual health-care expenditures.)

Participating patients received an in-depth 60-minute physician intake exam and a personalized care plan that included frequent self-management support by a personal nurse. Patients had round-the-clock access to clinical team members via phone, email and required home visits. Team members held daily meetings to discuss patient progress and to coordinate care with medical specialists and hospital staff.

For Boeing, one of the fringe benefits of the new care model was dramatically improved employee satisfaction. One participant said, “I have been helped more in the last six months than years of seeing multiple doctors.” Yet another said, “My blood pressure is now normal after being high for many years… I once felt doomed. [Now] I feel like a new person.”

Shifting gears

Physician involvement is key to accelerating the adoption of new care models, wrote Milstein and Victor Fuchs, PhD, professor emeritus of economics and of health research and policy, in a recent commentary in the New England Journal of Medicine.

“Once a better way of doing things is discovered in the health-care industry, it’s been estimated to require an average of 17 years before it becomes standard operating procedure,” said Milstein. “But we don’t have the luxury of time. We need much faster value improvement.”

While the new health-care law will expand coverage to millions of Americans, many of the strongest cost-containment provisions were pulled out at the last minute to get it through Congress. This leaves the United States with a system that still spends much more on health care per person than in any other nation, and lags behind other wealthy countries in quality.

The burden of these rising costs threatens to gridlock our entire economy if we don’t act quickly. If current trends continue, total annual U.S. health-care spending will reach more than $4 trillion by 2017, accounting for $1 out of every $5 the nation spends, according to government estimates.

So why are U.S. heath-care costs so high? Milstein believes that one driving force is a reimbursement structure that provides few incentives for rewarding quality and low per-capita cost of care. Without tying payments to better outcomes and lower total cost of care, health-care providers that use unnecessary services or deliver valuable services wastefully are better rewarded than their higher value competitors.

But even after incentives are fixed, changing the care delivery methods of health-care professionals and their support staff — many of whom are used to doing things a certain way — can be challenging. A key to Milstein’s past successes has been his engagement with all stakeholders in the process, not just the policy makers.

Robert Rebitzer MBA, a former leader of Accenture’s health industry practice and vice president at United Health Care, who has observed Milstein for many years and is now helping with CERC, said, “Arnie believes that innovation is best designed by listening to those on the front lines of health-care delivery — patients and clinicians — and incorporating relevant knowledge from other scientific disciplines such as operations research, organizational behavior, industrial design and human factors psychology.”

CERC’s advisory team is now narrowing its list of value-improvement targets for the coming academic year and selecting young innovators for its new postdoctoral fellowship. On its potential target list is care for morbid obesity, chronic abdominal pain and extremely time-sensitive conditions such as strokes.

The first class of CERC fellows will arrive on campus in August and will spend their first weeks in a design-methodology boot camp. Next, they’ll immerse themselves in field-based needs finding, followed by innovative care model design. And finally they’ll implement and fine-tune their freshly designed care models with industry partners before conducting outcomes research to demonstrate and improve their effectiveness.

And if Milstein’s vision crystallizes, health-care providers will line up to test-drive Stanford’s innovative care delivery models as they roll off the assembly line.

Think of it as a “cash for clunkers" program. Clinicians will be able to trade in gas-guzzling models — rife with waste despite clinicians’ best efforts — for a much better alternative: fundamentally redesigned care models that offer more health-per-gallon of health insurance.

Kris Newby is the communications manager for Spectrum, the Stanford Center for Clinical and Translational Education and Research.