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Dr. Jonathan Perlin: From Sick Care to Health Care

Dr. Jonathan B. Perlin is president, Clinical and Physicians Services Group, and chief medical officer of Nashville, Tennessee-based HCA (Hospital Corporation of America). He provides strategic leadership for continually improving performance at HCA’s 164 hospitals and 168 outpatient centers. Current activities include developing and implementing electronic health records throughout HCA, improving clinical “core measures” to benchmark levels, and implementing advanced patient safety programs including efforts to eliminate preventable, drug resistant, health care-associated infections.

He also has faculty appointments at Vanderbilt University as adjunct professor of medicine and biomedical informatics, and at Virginia Commonwealth University as adjunct professor of health administration.

Before joining HCA in August 2006, Perlin was Under Secretary for Health in the U.S. Department of Veterans Affairs. As the chief executive officer of the Veterans Health Administration (VHA), he led the nation’s largest integrated health system. At VHA, Perlin directed the provision of care to more than 5.3 million patients annually by more than 200,000 health care professionals at 1,400 sites, including hospitals, clinics, nursing homes, counseling centers, and other facilities. A champion for implementation of electronic health records, he led VHA performance to international and domestic recognition as reported in academic literature and lay press and as evaluated by RAND, Institute of Medicine, and others.

Prior to joining the VHA, he was medical director for quality improvement at the Medical College of Virginia Hospitals-Virginia Commonwealth University Health System.

Perlin has served on numerous boards and commissions including the National Quality Forum, the Joint Commission, Meharry Medical College, and the American Health Information Community. He is broadly published in health care quality and transformation, and is a fellow of the American College of Physicians and the American College of Medical Informatics. He has a master’s of science in health administration and received his Ph.D. in pharmacology and toxicology (performing research in molecular neurobiology) with his M.D. as part of the Physician Scientist Training Program at Virginia Commonwealth University’s Medical College of Virginia Campus.

Perlin has been recognized as one of the 15 most influential physician executives in the United States by Modern Healthcare in 2010. He has received numerous awards including Distinguished Alumnus in Medicine and Health Administration from his alma mater; the Founders Medal from the Association of Military Surgeons of the United States; and he is one of nine honorary members of the Special Forces Association and Green Berets.

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This discussion took place on January 20, 2011, in Dr. Perlin’s Hospital Corporation of America office in Nashville, Tennessee. Representing Ethix were Mark Neuenschwander, who was in the office, and Al Erisman, on the telephone. Mark heads The Neuenschwander Company, committed to promoting and facilitating wise development and sound deployment of medication-use automation, specializing in bar-code verification and documentation technologies for the prevention of errors at all points of care. In December 2010, he received the Institute for Safe Medication Practices’ (ISMP) Lifetime Achievement Award.

Ethix: Perhaps you could start by telling us about your work with the Veterans Health Administration?

Jonathan Perlin: I was invited to serve in the late 1990s as the chief quality officer working with Ken Kizer, the CEO and Undersecretary for Health. Interestingly at the time, the VA hospitals were beset with a set of challenges that are quite similar to those that affect U.S. health care today. The question of value was really on the table. The question for VA was whether it would be allowed to continue. That is to say, if one remembers the ’90s, it was a time when movies like Article 99 appeared, which had the memorable tagline, “When your hospital is a war zone, you have to fight to save lives.” It showed the VA as an inept bureaucracy.

From Sick Care to Health Care

The truth is, there were many people there who cared deeply about veterans, but their ability to organize care was hindered in two regards. First, it was hindered systematically because the regulations governing the VA system allowed for sick care for service-connected conditions, but didn’t create an environment for health care. Ken Kizer’s most fundamental contribution was to go to Congress and get them to revisit the purpose of the VA. Ultimately, this allowed the transition from a sick-care environment to a health care system. VA had been a portfolio of hospitals that offered episodic intervention, often at the end stages of a person’s life, and the vision that Ken brought forward allowed the system to be so much more. It became a health care system offering prevention, health promotion, and management of established disease.

Secondly, we had to address the broader questions of value, quality, safety, and efficiency across the spectrum of resources even beyond the hospital. It led to the building of primary care clinics, home services, use of information, and telehealth, connected all together.

As chief quality officer, what I was asked to do was build performance measurements and to identify the opportunities between the then-current performance and perfection. I then had the opportunity of working as the chief operating officer and deputy secretary of Health, and then CEO and undersecretary over subsequent six years. During my tenure, we determined that the electronic health record would be critically important in terms of stitching together all of those pieces enabling us to provide not just sick care but a health-care system. Information became the glue to connect sites of care and the patient’s personal health record with the care environment. It became the way not only to measure performance, but also to help us close the gap between existing practice and perfection. It also became a vehicle for celebrating accomplishment as we made progress.

So what do I consider my accomplishments at VA? I feel very privileged to have been part of the transformation from a sick care non-system to a health care system. This was supported by the electronic health record system, along with performance measurement, assuring we were on the path to improvement. We showed that the VA system was capable of being able to deliver higher performance with much greater compassion. I think it can act as a model for addressing health care issues more broadly in our society today.

In the rest of the country, the focus is more on sick care than health care. We need to address the issues of value, including quality, in all its dimensions; the patient experience; and compassion. The resources required to deliver care are currently under pressure all over the country, and indeed around the world.

Overcoming Stereotypes

When I mention the VA hospitals, there seems to be a negative response, based on some high-profile media reports. Yet when I examine the data for care at the VA hospitals, the results are much more positive. Is this part of the problem in health care today, that much of our impression is based on anecdotes and old information?

Let me address that in a couple of different ways. We are moving to science-driven health care where the data allow us to make better decisions. Just as there is evidence-based medicine, there is evidence-based management and evidence-based policy. If you go back to the ’90s when the VA began to measure, there were markers of problems in effective prevention and treatment of disease; there was inadequate performance in intermediate outcomes such as blood pressure control; and ultimate outcomes such as function or survival.

Evidence-based medicine: The judicious use of the best current evidence in making decisions about the care of the individual patient. Evidence-based medicine (EBM) is meant to integrate clinical expertise with the best available research evidence and patient values. EBM was initially proposed by Dr. David Sackett and colleagues at McMasters University in Ontario, Canada.

The VA sought to identify ways to provide better care and identified quality, access, patient satisfaction, patient function, community health, and cost effectiveness as the different categories for performance measurement. Identifying shortcomings identified where improvement was necessary, but identifying shortcomings opens one to criticism. So, the choice was to continue not identifying improvement opportunities or risk airing potentially dirty laundry. Veterans deserve the open dialog, though the public conversation can be difficult.

By the way, subsequently, the Institute of Medicine has identified the six domains of improved quality care: safe, effective, timely, patient-centered, efficient, and equitable. What is remarkable about these and VA’s measures is they are not just self-referential, focusing on the institution, doctors, nurses and technical quality, but are fundamentally patient centered. Consider the issue of access: The question was not just whether the particular service is available, but could you get access to the information, the electronic health record, and the patient’s personal health record. Another example: It is great that the blood pressure is controlled to 120/80, but functionally can the veteran carry groceries from car to kitchen, does he or she have enough food on any given day?

Then there is the issue of community health, thinking about a population. The new strategic “Triple Aim” from Medicare and Medicaid, under the leadership of Don Berwick, deals with health, not just with care. It also considers cost. Our country’s challenge today is similar to VA’s challenge of the last decade — improving the care of individual patients, the health of the population and controlling costs . . . in short, improving value.

When we first looked at the numbers, VA performance was not good. What we didn’t know was, in the absence of other measures, VA was exactly where the rest of health care was. Steve Asch and Beth McGlynn at Rand Corporation did a study of evidence-based preventive and treatment services, looking at health care in 12 major cities in the U.S. They looked at things like beta blockers after a heart attack, and found that preventive services were given only on average 54.9 percent of the time. U.S. health care only got it right in health care about half the time.

Our early attention at VA was focused on improving measured performance and it allowed us to really make a difference. This quest for improvement was supported by electronic health records, error checking, decision support systems, and management attention, as well as a passion for caring for veterans. McGlynn and Asch came back in 2004 and compared VA with health care across the United States. They found VA systematically outperformed all other settings on 294 measures of preventive services and disease treatment, ranging across the spectrum of illnesses from coronary artery disease to hypertension to diabetes and to mental health care.

At the same time, veterans took notice as well. The VA became the benchmark, outperforming all other health settings in the American Customer Satisfaction Index from the University of Michigan.

This was a remarkable eight-year period from 1996 to 2004, when we gathered data. Process measures like immunization against pneumonia increased from 26 percent in 1996 to 94 percent by 2004. Although this is a process measure, your really don’t have to reprove that vaccination prevents hospitalizations from pneumonia and saves lives. Still, we have some health services research to close that loop. Despite the fact that the VA system expanded between 1996 and 2004 to care for two-and-a-half times as many patients, the number of hospitalizations for pneumonia went down by half. And, because the health services research is available, we know that 5,000 veterans did not needlessly die during that time period compared with what would have been predicted were they not vaccinated.

While these data do not prove causality, it certainly is clear that there is this association between preventive services and these reductions. The summary is this: Evidence-based care, supported by measurement, transparency, and enabling systems like electronic health records can produce better outcomes. Is VA perfect? No, it is not. There is a lot that is left to do.

I am also proud of my current environment, HCA. It is like VA in that it is an early adopter of bar-coded medication administration, assuring the patients’ “Five Rights.” These are that the patient gets the right medication delivered to the right patient in the right dose, by the right route of administration, at the right time. This is something bar coding guarantees.

Using Data

So, how do safety and quality relate to value: Over that 1996-2004 period of time, the general cost of health care, unadjusted for inflation and in nominal dollars, increased by 44.7 percent. The cost of care for veterans over that same period of time went up 0.9 percent. During that period, VA achieved measurably better quality, access to care (we added hundreds of clinics during that time), benchmark improvements in customer satisfaction, and lowered death rates for preventable illness. Also during that time, VA had full deployment of electronic health records providing complete access to records across the system. This should be an object lesson for our country: With full access to preventive services and better care, VA was more efficient. Access and better care offer better value.

Let me make this real in a couple of different ways: In the early 1990s, a veteran with colon cancer was almost always diagnosed at an advanced state, with the cancer through the bowel wall or even metastatic. By 2004, almost every cancer was picked up at stage A or B, that is, at the polyp stage, not extending through the bowel wall. Obviously, it is much better for the patient to have early detection, but it is also much less expensive to take care of polyps than it is to deal with the full-blown cancer.

Let’s put this in everyday terms; what do we want in health care? Safety, effectiveness, efficiency, and compassion. What we can learn is that there is a link between policy, access, performance measurement, and technology that can not only improve efficiency, but that also supports compassionate care.

Health Care in America

That is a great background for all of health care. What do you believe are the biggest issues in health care today in America?

There are many big issues for health care in the U.S. today. The one that has the public attention is the issue of cost. But cost is really a shorthand, because the bigger issue is value-related. Value can be expressed as the mathematical relationship of outcomes to resources. So if value equals outcomes over cost, you can improve value three ways: improve outcomes, decrease resources or cost, or do both. We’ve been focusing a lot on the cost. We also need to focus on outcomes in all of their dimensions: the technical quality of care, the patient experience, the capacity to restore function, the health of the community, etc. There has been a lot of concern that with costs growing, the outcomes have not been commensurately good. We have a value problem.

But if you probe deeper, we have a society that is playing “catch up.” We are taking care of a lot of disease, much of which is preventable. We have an epidemic of obesity, due to inactivity, that leads to a forecast of adverse health consequences. I could name a hundred diseases that come from obesity. At the top of the list is diabetes. Post-menopausal breast cancer, colon cancer, and most gastro-intestinal diseases have increased likelihood with obesity.

Life Style and Health Care

So we have two major issues. First, our sick-care treatment is not delivering the value it needs to provide. And, second, we have this larger issue of a society that is not oriented toward health, causing us to slip across the gulf from potential for health into potential for sickness, which consumes great resources and causes great pain.

These are very complex issues. Perhaps the problem is we don’t invest enough in preventive services, in social support, in things like education and “walking-friendly” communities. It is interesting to look at aerial pictures of the U.S. In much of the country, we have parsed ourselves into cul-de-sacs, so that even if you are a block away from a school, a child can’t walk to school. Video of Jonathan PerlmanThey are not getting the exercise they might have had in an earlier time. Compounding this, we are no longer investing in physical education as we once did. Why am I making such a point of this? If one looks at the statistics for the cost of health care services, the sickest 15 percent of the population require over 85 percent of the resources. Sick care is end stage, it is remediation, often for things that might have been prevented.

How bad is the challenge of obesity and its consequences for our nation? Here is some data from my VA days. Most don’t know that two out of seven young adults are turned away from service not because they are unfit, but because they are so incredibly unfit that even the Army or the Marines don’t think they can get these young people fit in a reasonable amount of time.

In my home state of  Tennessee, we are in the Southern belt where there is an epidemic of obesity. This isn’t just a health challenge, but an economic issue. There was a large company that thought about relocating to Tennessee, which would have been an economic boom for the region, but they chose another part of the country. For every person locating here, they would need an extra $1,800 per year to combat the health consequences from inactivity and lack of a healthy diet. This is a national competitiveness issue for the armed forces, for the state of Tennessee, and frankly for health care because of the increased costs.

This is also a big social issue the solutions for which range from education to structure of a community. While tobacco is still marginally ahead of the consequences of obesity as the leading cause of premature death, disability, and disease, obesity is gaining rapidly.

When the first baby boomers were children, the rate of childhood obesity was 4 percent. Today the rate of childhood obesity is 21 percent. Today two-thirds of adults are either overweight or obese. But with today’s rate of childhood obesity, in 10-15 years, the projected adult rates of overweight and obesity will be in excess of 90 percent.

We’ve had tremendous gains in longevity in the 20th century. Most were not due to interventional medicine, but were due to public policy: education, immunization, and disease control. All of those were great things. If you were born in the cohort of 1900, you had half a chance of not being alive by age 54. If you were born in 1950, you had half a chance of being alive in your mid-70s.This current generation may be the very first in contemporary America to experience shorter lifetimes than their parents, by as much as five years.

Unfortunately, the generation of children born today are on course to experience two things. First, for those born after 2000, it is likely that one-in-three will develop diabetes in their lifetime. Second, this current generation may be the very first in contemporary America to experience shorter lifetimes than their parents, by as much as five years. This has been documented in a number of articles in the New England Journal of Medicine. A pretty frightening thing. We have a health opportunity. We need to keep the healthy healthy.

The other big challenge, of course, is the issue of value of health care or, more specifically, “sick care.” That takes us back to the issue of value — the relationship between the dollars we are spending and the outcomes.

Why is it that the U.S. has among the worst world health outcomes in the industrialized world, when at the same time the U.S. expenditures are the highest?

This question has two roots. First, we have to deliver higher value for the health care dollars that are entrusted to us. But in the industrialized nations, the U.S. is in the bottom five for investment in social health, be that education, physical activity, or the general awareness that constitutes health literacy. All of the other industrial countries invest in these kinds of things for their populace. So we are heavy on our remedial care and really light on our preventive care.

The second question is, in the remedial, whether we are getting as much as we should from the dollars expended. Our country has the capacity to offer the best care in the world, but it’s also clear we don’t offer the best care consistently. There are potentially many reasons for that, not the least of which is that health care is fragmented, not as well coordinated as it should be. This combined with the undervaluing of preventive services seems to explain the result.

Let me move on to the area of technology. You have mentioned electronic medical health records. Where are we as a nation in implementing this technology? And where do you think we can go and how quickly?

This is a really exciting time. The Obama administration deserves kudos for moving electronic health records and health information technology forward. For the first time I feel that I may have the opportunity in my lifetime, and certainly in my children’s life times, to go from a doctor’s office to another doctor to a hospital and not have to fill out that ubiquitous clip board, writing down the same information again and again. It may be the first time that I’m optimistic that should I ever show up unconscious in the emergency room, they will be able to tap into information that indicates what my allergies are, what medications I am on, etc.

Information is critically important. No matter how we end up organizing contemporary health care, there are geographic challenges a patient faces in moving from one place to another, going to hospitals, doctor’s offices, or even home care. There are similar challenges connecting care over time. Wouldn’t it be nice if all of the members of the health team had good, authenticated, secure, easy-to-use information as a basis for decision making? That is really the aspiration for interoperable health care and the reason it was established in the HITECH (or Health Information Technology for Economic and Clinical Health) Act. It is quite interesting that HITECH was part of the economic stimulus or, more formally, the American Recovery and Reinvestment Act, so that whatever happened with health reform, a foundation would be put in place for higher value health care.

What do I mean by that? As with VA, information serves as the glue and fuel. Information can also serve as the system for integrating different elements of care. It serves as fuel by identifying what needs to be done. It creates virtual integration between the patient and the professional health care providers, creating a new system of care. It also provides a tremendous documentary record that can be used for research and discovery, and for social policy, allowing the health system to learn. Will physicians and other clinicians adopt computers? This horse is already out of the barn. The youngest health care professionals have grown up with computers, and they expect them. There is really a new opportunity to bring information management to an area that demands the same kind of reliability needs as nuclear energy or aviation. Health care is tremendously information intensive.

Heath care has had the second-lowest gain in productivity of all of the industries because of its lack of use of information technology.The economic effect of this is huge as well. David Cutler, the Harvard economist, reported that heath care has had the second-lowest gain in productivity of all of the industries because of its lack of use of information technology. This is despite the fact that we have all these high-tech gadgets This is partly due to our absence of advocates for information technology. Yet information can lead to better care, better quality, better safety, better decision support, better error checking, the capacity to create virtual systems, and greater efficiency. This is critically important.

We have something in HITECH called “Meaningful Use.” The act, or law, lays out the implementation structure, and the measurement of that structure. There are outcomes expected by 2015 in the third stage of Meaningful Use. I am very optimistic that our country will use information to move from the old industrial model with factory-centric care to an information-age model that creates continuity for the patient across environments.

Meaningful Use: the standards and certification criteria for the certification of electronic health records (EHR) technology so that hospitals and physicians will know that the EHRs in which they invest can perform the required functions. A companion rule, issued by the Centers for Medicare and Medicaid Services (CMS), defines the minimum EHR Meaningful Use objectives that physicians and other professionals must meet to qualify for bonus programs enacted under the American Recovery and Reinvestment Act of 2009.

We’ve aspired to having the patient at the center, and I think we will move to that. The economic challenges and information support for health care will certainly place value at the center.

Electronic Health Records

Some hospitals claim they have electronic health care records today. Does this mean they can use them in their own system, or can these follow you between systems? What is the state of where we are today, and what are the steps to get to the dream you have laid out?

In 2008–09, excluding VA, less than 2 percent of the hospitals offered sophisticated electronic health care records. In 2008–09, Dr. David Blumenthal, who recently stepped down as the national coordinator for health information technology, offered some statistics on the current state of adoption. He identified that, excluding VA, less than 2 percent of the hospitals offered sophisticated electronic health care records featuring decision support with full error checking. The challenge was that not all of those who were at the front lines of health care were using them. All of the support systems — the labs and pharmacies — were highly automated, as were non-physician clinicians, but the doctors lagged. As a profession, we’ve been the Luddites, lagging in terms of our use of technology.

The HITECH Act singles out doctors to encourage use of electronic health records The goals of the Obama administration are substantial, and there is great traction. Over the last year alone (2010), the number of doctor’s offices that moved to electronic health records increased from 27 percent to 49 percent. That’s huge. Hospital systems are more complicated than doctor’s offices, so that is tougher.

There is a parallel in health care to society more broadly: Not only do we need to have a personal-computer revolution, but we need an Internet revolution. These computers have to talk to each other so the information can get from the doctor’s office to the hospital to the rehabilitation center and, importantly, to the patients and their caregivers or proxies. This requires standards or specifications for how the information is represented, remains secure and private, and how it is transmitted to move across care environments or even within a care environment. It’s going to take a while to create this kind of interoperability.

I have had the great privilege of chairing the Health IT Standards Committee for the Department of Health and Human Services and the Office of the National Coordinator. A challenge is to move this fast enough to get to truly meaningful results, but so fast that it’s all theoretical. David Blumenthal uses the metaphor of an escalator. If it goes too fast, it’s dangerous and you have people flying off. We need to move fast enough to achieve results and get to a higher level, but not so fast that it’s neither safe nor effective.

Here is another challenge big challenge. You want innovation, but you also need interoperability. If the standards are too rigid, you will suppress the capacity for innovation. But without standards, you cannot exchange information across disparate systems. So, we have to move at the right speed for making adoption possible and with just the right degree of specificity.

Speaking of hospitals being slow, I have always argued that every hospital has bar coding. It is just in the gift shop!

Here is a real story. The discovery moment for hospital bar coding at the VA came when a nurse (Sue Kinneck) was returning a rental car. When she returned her car, the lot attendant checked it in through use of a portable bar code scanner., She teared up, and it was not from the loss of the rental car. She had been the charge nurse on a ward where a medication error had cost a patient his life. In that moment, the proverbial light bulb went off: She saw the rental car being returned and the receipt printed, all by virtue of a bar code. If we had this for dispensing medication, we wouldn’t have the errors that cost patients their lives, she concluded.

Let me give you a personal story: My mother needed a cardiac stent, a little metal straw scaffold that holds a closed artery open. When she got the stent, unfortunately not in a hospital with bar coding, the nurse came to me and said, “Oh, Dr. Perlin, your mother is doing great. But there is just one thing that worries me. I can’t find the orders for Plavix (the medication that blocks clotting). I also can’t find any documentation that it was given. But don’t you worry, the doctor is a fanatic about this.” Beyond the love of a son for his mother, what was going through my mind as a physician was potential complications of her procedure. Inserting this scratchy metal straw has the same effect as abrading your arm on a briar. It wants to clot at the scratch. Unlike a scab on the outside, a clot on the inside leads to a fatal heart attack. It was not reassuring that the doctor is a “fanatic” in the absence of any documentation that the medication was ordered or given.

While I know this would never happen in an environment with bar coded medication administration, the situation was answered by my mother, who said she had two cups with four orangish pills that turned out to be the right medication. It was lucky she was awake enough to answer and that she had an advocate.

My litmus test for safety is that we shouldn’t have to have an advocate for the patient. I am passionate about the use of these technologies and what they mean for safety. This is what it means to deliver health care effectively and with compassion. Good intentions are not enough.

Connecting Patients and Health Records

Do you envision a day where each patient would have a chip containing all of their health care records that would be with them where ever they went?

It is ironic that my daughter’s little dog can go to the veterinarian and his whole health history is available. He can get lost and be identified. You raise an interesting point. What will the tool be to assure that the patient and his health history will meet up wherever he goes, particularly in an emergency situation? There are patients who have elected to have a chip implanted. And there are some members of our armed forces who use this technology as well.

But there are other vehicles, as well. I will be honest, I am not a fan of the record on a card or a thumb drive. If I am in an accident and don’t happen to have that record with me, this solution just failed.

We are moving to an era where information can be very secure and protected and available online. I advocate secure access to information that the patient controls and allows access to selected parties, such as their health care provider. Such a model also allow a “break the glass” type of function that would offer health care providers access to critical information in an emergency situation, such as the patient showing up in the ER unconscious. This model worked well for the VA, and I think it is good policy. This means the patients do not have to carry something with them physically. We would not necessarily need to have a chip implanted, but the information could be securely available in the right situation regardless of where the patient happens to be.

How far away do you think that is?

We have pieces of that now. There are health systems within which that happens already. Examples include VA, Kaiser, and sub-networks of HCA. But the next step is the interoperability that we take for granted with the Internet. For example, if you have a Mac and I have a PC, you use Safari and I use Explorer, we can both get to information because despite what is unique to each of our own systems, the information that is transmitted between them abides by certain fairly basic standards. With additional levels of security and privacy protections, we are moving, probably over the next decade, to the needed degree of interoperability.

This will be available for very prescribed functions for structured information over the next five years as part of the HITECH Act and Meaningful Use requirements. Let’s be very clear about this. HITECH has associated with it the capacity to offer hospitals and physicians’ offices between $20 billion and $44.7 billion of incentives to get electronic interoperability between now and 2015. Further, if those offices and hospitals don’t implement those systems that certification vendors have identified as being able to meet the Meaningful Use requirements, then there will be sizable penalties to those practices and hospitals for not implementing required capabilities. The required capabilities include security, privacy, and interoperability standards. That’s why I believe that for certain foundational elements, there will be not only use but basic interoperability by 2015. The penalties thereafter become substantial, and are substantially motivating.

The ecosystem for innovation, once this basic interoperability platform is in place, becomes really exciting. Think of the acceleration from the first availability of the Internet to all of the things that have been created on top of it. That platform of interoperable information will lead to all sorts of greater uses to assisting patients, care providers and the coordination of care. This produces better care and removes the opportunities for error.

It’s not just safety that’s improved, but also efficiency. The last time you had your blood pressure taken, the nurse probably used an electronic blood pressure device. The nurse probably took the reading from that machine and transcribed it to a piece of paper. From there it probably went to a paper record, but since 50 percent of doctors’ offices now have electronic records, it would also be reentered there into a computerized record. Or in a hospital, maybe into an electronic record there.

Think about what just happened. This data was born digitally and died on a piece of paper. Then it was resurrected, not necessarily in a timely or error-free way, into an electronic system. Connectivity allows the data to flow directly from the electronic blood pressure device into the electronic health record.

Let’s say I am taking care of a patient with hypertension. Under the usual circumstances, the nurse might take the blood pressure at the beginning of the shift and, I hate to say it, eight hours later, the data is then entered into the electronic record. Decisions are then made on data that is eight hours obsolete. This is not because the nurse was negligent or somehow not caring, but because the systems we have created don’t support the sort of timeliness that good diagnosis and therapy require. The ability to do that not only leads to safer and more effective care, and better decision making, but here is the irony: Think of the labor that was wasted for a valued professional such as a nurse in transcribing from an electronic device into paper and then back into an electronic record. Standards for connectivity allow us to really use these devices to make information flow. This “trifecta” of safer, more effective and more efficient care – higher value – is why my colleagues and I at HCA decided to make electronic medical device interfaces our standard.

We spoke earlier about the diabetes statistics. Often, such a patient is told by their doctor to write down their blood sugar levels for a week before coming to the office. The patient’s blood sugars may be all over the map during this week. They may be hyperglycemic, and the sugars continue to damage their arteries or kidneys, heart or brain. Or they may by hypoglycemic, and they run the risk of passing out, perhaps while driving or up on a ladder.

Think about the new world. There is a device that monitors your blood sugar continuously and it fits under your watch. Suppose this device is connected to the network that relays these readings back to a medical facility where the internist or a dietician or a diabetes support person can read it. When they review the report, they may call and say, “What happened on Tuesday? Your blood sugars were extraordinarily high.” He responds, “Oh, it was my grandson’s birthday. I had birthday cake and maybe I had a little more than I should have.” This sort of data allows care providers to work with patients to allowances for life, recommending a bit more insulin if sugar intake is high, or triggering a real-time alert if the blood sugar is going very, very low and the patient has not detected that themselves. Or alerting someone if it is in the critical range.

This may seem like science fiction, but in fact there are now chips that are smaller than a dime, that can go under a watch. Some of those have Bluetooth connectivity that can link to your cell phone. The cell phone, in turn, can link to the network through a Wi-Fi environment and relay that information. There are also now medical devices for blood pressure, blood sugar, and even digital scales, that actually embed cell phones, like a Kindle, to transmit data.

Moving treatment from acting on last month’s numbers to working off the readings from the last hour offers pretty exciting possibilities for care. It points the way to better health, better outcomes, and has the potential for better efficiency. And back to our earlier discussion, this provides the ability to move from silos of care to a technological infrastructure of integrated care. This can enable us to work more effectively on health promotion, not just for remediation. From a broader social context, this offers our society the highest chance for health and the highest opportunity not to become part of that 15 percent that uses 80-85 percent of all health care resources.

Technology Downsides?

That’s a great vision. You mentioned the Internet and all the great things that came from that. But other things that came from the Internet were the dot-com bubble and pornography. It is a reminder that new technology breeds not just opportunity but also downsides as well. How are you thinking about using technology to capture the great vision you laid out but at the same time avoiding some of these huge holes that chew up money, hurt society, and don’t produce value?

A great question. First, there is a challenge to do anything because of the great economic pressure on health care today. This is one of the great things about standards. In the absence of standards, there are no market signals as to where to make an investment. You don’t want standards that are so rigid that there is no innovation. On the other hand, one does want standards and a certification process that tells vendors it is OK to make a capital investment, because this is the area that will be supported by health care providers, doctor’s offices, and so forth. The ideal, while not being overly rigid, is that there are cues that indicate opportunities in the new ecosystem of health care and health-information technology. That is not to say that innovation comes without risk. There will be false steps. But hopefully the cues are specific enough that there is a degree of confidence that investments in this particular area will pay off.

At the same time, there will be early adopters of innovation. Take our organization. As I mentioned, at HCA we are connecting blood pressure machines to electronic health records as something to improve the quality, the safety, and the efficiency of care. We think the business case is inherently compelling, but we are hedging our bets by working from the standards. Others might go even further upstream in pioneering new technologies, and some bets may have higher risks and higher rewards. Early adopters and innovators want to be successful, but there is always some risk to pioneering. This has been a part of innovation from time immemorial.

When I was managing R&D in technology at Boeing I used to say that if we didn’t have some failures, then we were not trying hard enough. But we needed to learn from the mistakes.

“Fail fast, fail small, and move on.”You make a great point. You asked earlier about my role at the VA and what was part of my legacy there. When the secretary asked me, “What would be the number one thing you could do to improve patient care?” I said we needed to close the gap between the perception of value and the actual value as measured by quality and efficiency of care. And I thought this could happen through the transparency of performance measurement and the full deployment of electronic health care records. Through my role as chief quality officer, chief operating officer and chief executive officer, I got to see that through to fruition. But that is not to say there was not learning along the way to get to this innovation. In fact, we had an adage that was, “Fail fast, fail small, and move on.” Obviously, the goal is success, but “chunk” complex projects to that a misstep is small, not catastrophic. This is a lesson I carry into my work at HCA.

So parse your risk into chunks that aggregate together into something really substantial. But parse your risks into small enough chunks so that if you fail at any one step you haven’t failed at the whole project; rather, you have failed on some learning component.

Across our current HCA system with 164 hospitals, over 400 physician practices, 200,000 health workers, and 125 outpatient centers, this scale is daunting. We need to make some pretty sizable bets. So we are betting with the standards and the incentives that go with those. And in the process we are also seeking to innovate. Such innovations are pieces of the greater whole.

Let me give you another example. One of the things electronic health records are potentially very good at is not just creating continuity across different sites of care, but also allowing connectivity between the different care givers. But if I, as a physician, want to alert someone else, such as a nurse, that I have just entered an order, do you ping that person and interrupt every moment of their day? Or are there other approaches? There are some emerging commercial products that produce electronic alerts at the workstations. They include color-coding and images that say whether it is really important to attend to an order or a lab value now, or that indicate something is not urgent but needs to be done before the end of the day. You can give those signals without interrupting workflow. We’ve built a living “work board” to share that kind of information, and have taken it from prototype to production.

Our big bets are hedged, not only because we are betting with the standards, but also because we are learning in chunks that can fail. No move is ever made that can potentially harm the patient. That is where there is a hard and fast line. Just let me say for the record that the biggest protection for the patient is moving from paper to electronic records. At the VA in 1996, four out of 10 encounters did not have the benefit of past history. By 2004, the electronic chart was available 99.9985 percent of the time. Even in that remaining small percent, the issue was “brown outs,” not complete loss of access to information.

It is a whole lot easier to make safe, effective, compassionate decisions when the basic information is available. Think about the health care encounter. The patient might be there to follow up on a biopsy to rule out cancer. Imagine if that encounter begins, “So why are you here today?” That’s not effective or efficient, and it is certainly not compassionate.

Before HITECH, that 40 percent uninformed visit rate was the going rate right across the country. By 2015, I think it is quite likely that 90 percent of encounters will, at a minimum, be informed by rudimentary information or more because of interoperability across the country.

Incentives for Improvement

It seems to me that technology for health care struggles with an incentive problem from the market. When I go to the doctor’s, I don’t ask what it costs because someone else is paying for it, assuming I have insurance. Other than the government coming in and saying we are going to mandate these things, how do you move health care forward when you don’t have the market incentives in the system?

That is really the key question. There is very little incentive for coordinating services or for managing preventive care. If one looked at the history of “fee-for-service,” starting with the assumption that individuals and institutions are rational economic actors, one would have to say that the incentives for fee-for-service boil down to the more you do the better you do, financially. It is great that people’s ethics guide them to want to do good for society, that there are systems for accreditation and certification and continuing education. I think the data would say these things are necessary but not sufficient.

If you take the sum of the expenditures for Medicare, Medicaid, plus social security, plus the interest on the debt, even after health reform, by 2025, those four things add up to every last dollar of revenue into the treasury.The new incentives are changing rather rapidly under the cost pressures for the broader economy. On the federal side, look at the numbers. If you take the sum of the expenditures for Medicare, Medicaid, plus social security, plus the interest on the debt, even after health reform, by 2025, those four things add up to every last dollar of revenue into the treasury. This translates into cost pressure on health care. In the private sector, employers and individuals are facing similar challenges.

So the fee-for-service incentive is changing. Instead of paying for how many times you do something, the market will increasingly be paying for outcomes. And that leads to a better operationalization of risk. This is emerging now in a couple of different ways. It is coming faster in the commercial portion of the system, just because there is greater agility and smaller scale, but it is also part of the federal program.

There are a number of approaches to this. The emergence of “fee-for-value” is enforced by what is called “network narrowing,” where employers, businesses, insurers, and third-party administrators move the business to those providers (doctors, hospitals, other health care providers) who demonstrate measurably better outcomes at lower cost. That is one way of moving the incentives from volume to value. Another is moving toward those health care providers who have electronic health records, or who have become centers-of-excellence. So the new set of financial incentives would be, the better you do against the outcome measures, the better your access to patients and volume growth, hence the better you do financially.

Network narrowing is a permutation of where the worse you do, the more excluded you become. Pay-for-performance, which is a piece of the current law in Medicare that requires “value-based purchasing,” is the idea of paying more for better services. Just to use the incentives metaphor again, in pay for performance, the better you do, the better you do. Taken to its logical end, this means you would not pay for avoidable health care conditions such as hospital-acquired infections, any more than if your car fell of the lift while you were getting tires, you would accept a bill for repairing the car that had been dropped. The same is increasingly true in health care.

Health care leaders are stepping up to these incentives. Gary Kaplan at Virginia Mason, under his great leadership, has stepped up to this. HCA has stepped up to that. Don Berwick, at a health care conference a couple of years ago, referred to this approach as a seismic change in health care. The direction is set. We are moving from a fee-for-service model where more is better, to a fee-for-value model where better is more. This takes those who have gone into health care, administrators and clinicians, back to their first principles. That base commitment that made health care people want to be doctors, nurses, administrators, or pharmacists in the first place. It moves us the economic rationale from “the more you do the better you do” to “doing well by doing good.”

I am pretty excited about this. Yes, it is complex. And yes, it is shattering to the status quo. But that sort of incentive creates a great pull for the good use of technology, good coordination care, and use of electronic health records and bar coding, that frankly has not been incentivized by the previous system. So this is an exciting time.

Evaluating Health Care Legislation

We have talked a bit about the new health care legislation throughout this discussion. But perhaps you could talk specifically about it. We have a strong pull from some of the populace to try to withdraw the bill and yet you have spoken positively about aspects of it. How do you view it?

We are very committed to the access this legislation provides. I personally am very committed to the idea of being measured on value and I think the legislation introduces that. We have a looming economic crisis in our country, and we have got to deal with these issues. So whether it is this bill or a successor bill, this horse is out of the barn. It is not going back in. I think it is important for our country to really concentrate on the value proposition.

By the by, there is a lot of posturing, but just to be very clear about the structure of this bill, one has to understand that this bill was scored by the office of Congressional Budget Office as a deficit reduction. That means repeal requires a couple of things. First, it would require alternate mechanisms for deficit reduction. Those are hard to come by. So even if one’s fundamental belief is, accurate or not, that this doesn’t reduce the deficit, it was scored that way and one would need to come up with another way of reducing the deficit. Point two, it would require a super majority, a veto-proof majority, to lead to repeal. So this is the law of the land. It does some incredibly important things. It takes 32 million adults who had been disenfranchised, who were excluded from consistent access to health care, and makes health care available to them.

Think about the VA experience. There were things that may not translate from VA to the broader environment, but broader access, technology, and coordinated care across a range of locations led to better health status across the veteran population, which led to lower costs. That took a long time. Preventive services and, especially disease management, has a payback, but it’s over the longer haul, not over the short term.

We need to think about a couple of things. We need to think about the longer term value of population health and the shorter term value managing disease effectively. But the second point is, in the absence to consistent access to health care, how do you promote health or manage disease for someone who might be at risk? Think about obesity and diabetes. How do you prevent or manage the diabetes if their only access to health care are is a random presentation to the emergency department? It’s more effective, efficient, and compassionate to offer ongoing health care to people, rather than just to be there at the end stage, however well that is done.

In the net, is the legislation a step in the right direction, a misstep, how do you view it?

It is absolutely a step in the right direction. The questions it raises would not have been avoided in its absence. So we must grapple with those issues. And the legislation is a platform for enfranchising 32 million people with new access to health care and the possibility to health promotion and disease prevention, as well as launching a meaningful discussion about value in the delivery of health services.

Personal Motivation

What personally motivates you to do what you do? You are obviously passionate, and I want to know where this comes from, what drives you?

The opportunity to act on policy in a large system is like being a doctor on a large scale. It is wonderful to help make an individual patient healthier, and it is also wonderful to help a large population, whether veterans or the large population we are privileged to serve here at HCA, get healthier. Or at a policy level, to help the whole population gain improved health and care through better IT standards, and the promise of better health and care with greater efficiency — that’s incredibly motivating.

I didn’t set out to be an administrator/policy person. I was quite happily working away in molecular neurobiology. But my very first patient was a heart transplant patient, and this was my introduction to clinical medicine. I went to his room to find him and he wasn’t there. First I was worried, but then I went to the nursing station and was told, “Oh, Mr. so-and-so is out on the deck getting some air. I found the patient, and the air he was getting was tobacco flavored! He was smoking through his tracheostomy 10 days after a very successful heart transplant.

I came back after the excitement of my very first patient being a heart transplant patient, completely deflated. I went to the attending physician, and my mentor, and said, “Can you believe …” and he rolled his eyes and said, “yes.” But if you want to do something, why don’t you talk with the dean? So I went to the dean. He said we had always wanted to make the hospital smoke free, but he had been told by the governor and legislature that we should do so at our own peril.

I worked with a couple of more senior colleagues, and I’m pleased to report that by the end of that year, the campus was smoke free. The ability to make a change at a policy level quickly demonstrated how those things that cause one to want to be a doctor and care for people could also be translated to caring for a population, an institution, or an organization. And that is very gratifying.

I like fixing things, and this is like being a doctor to a system, and that is rewarding. I consider it the pinnacle, not that we went from paper to electronic in the VA, but that 5,000 people didn’t die of avoidable pneumonias because they were vaccinated. Knowing that policy choices make that possible is exciting.

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