Dr. David Kashmer, a trauma and acute care surgeon, is a Fellow of the American College of Surgeons and is a nationally known healthcare expert. In addition to his Medical Doctor degree from MCP Hahnemann University, now Drexel University College of Medicine, he holds an MBA degree from George Washington University. He also earned a Lean Six Sigma Master Black Belt Certification from Villanova University. Kashmer contributes to TheHill.com, Insights.TheSurgicalLab.com, and The Healthcare Quality Blog where the focus is on quality improvement and value in surgery and healthcare.
Kashmer’s latest best selling book, “Volume to Value: Proven Methods for Achieving High Quality in Healthcare,” was written primarily for physicians and their administrative colleagues to introduce the standard tools of quality improvement that are directly related to healthcare. His goal in writing the book is to popularize the use of these tools like Lean Six Sigma in healthcare and to provide some common examples of what they imply for the potential to improve healthcare in America. The book is available in the Amazon Store in both paperback and eBook versions at http://www.amazon.com/dp/B01J57WQDW.
In this interview, Dr. Kashmer discusses trends are that are likely to shape the future of healthcare in America, with an emphasis on improving the quality of healthcare while reducing costs.
Bill: Dr. Kashmer, over the past few years we have been hearing about how healthcare in the United States is lagging other industrialized countries. In your book you describe some expectations for changes on the horizon in healthcare reimbursement. A key point is that reimbursement has been based more on of a volume-based system and it is moving toward a value-based system. Where is this coming from and can you explain your expectations for that trend?
Dr. Kashmer: You know Bill, this all stems from the fact that the United States is a leader in many things. Unfortunately one of the areas where we lead is in waste in healthcare, and that is not optimal. We spend approximately around 14% of our GDP every year on healthcare and that dwarfs country number two which has historically been Switzerland. The country in the number two spending position varies by year, but the country in the number two spot typically spends about 7% of it’s GDP in healthcare, half that of the United States.
If we’re spending 14% of our GDP on healthcare, we need to examine the kind of outcomes we are achieving. The most classic measures of national healthcare performance are life expectancy and infant mortality rate. Routinely the United States is around twentieth or twenty-first in those typical measures. There are other measures that apply, but those are two of the very common ones that at a high level tell you the nature of the problem. Clearly the outcomes we are getting are suboptimal.
Regardless of the political leanings, the executive branch of the government has a history of failing to really make impactful improvement in our healthcare. In recent years there has been recognition of the gap with expectations, especially in light of our world-leading spending on healthcare. As a result there has been more emphasis on delivering value. About two years ago the U.S. Department of Health & Human Services (HHS) said they wanted to transition to 50% of reimbursement from the government third-party payers, like Medicare and Medicaid, to be related to value by using quality-based metrics by 2018. Again, right now, a lot of how we are reimbursed in healthcare is based on the volume, the number, of services provided. The status of the Affordable Care Act continues to be an unknown, although right now it continues. The initiative to repeal and replace was put to the side, but there continues to be interest in reactivating the discussion. My colleagues and I do think, however, that we’re going to continue moving toward a value-based reimbursement system. In all honesty, higher quality, less expensive, and less wasteful care is really the right thing to do regardless of the reimbursement.
Bill: It seems like it’s difficult to argue with the concept of increasing quality and thus value in healthcare delivery.
Dr. Kashmer: Clearly it’s the right thing to do, but there are some cultural risks. Physicians may have concerns about how quality is being defined for them (instead of with them) and may perceive that a focus on quality involves metrics that the physician cannot completely influence. This may lead to fear that the risk of bad outcomes has been transferred to the provider and will negatively affect reimbursement, cutting their pay without proper support.
Bill: How do you define value in healthcare?
Dr. Kashmer: Well, that’s a huge barrier we face. Typically we figure increase in quality and decrease in cost will yield improved value, but we don’t have one index or measure to define what value means. It’s really challenging to bring healthcare providers together on a consensus of the definition of value. I looked at the writings of Michael Porter, a well-known thinker on topics related to business strategy. He asserted a simple and straightforward definition for value in healthcare, and that is critical outcomes divided by cost. This is a satisfying definition and it makes perfect sense, but there are real challenges to applying this definition in healthcare because we often don’t have the vocabulary in healthcare to be able to define or measure the outcomes or the cost. Many in our industry have put forward definitions for value and today there are at least eight circulating definitions of value in the healthcare industry without overall agreement. I have a blog entry that lists these different measures that readers can view at http://Insights.TheSurgicalLab.com.
