As the dynamics of our country’s health care system change, so too must our methods of managing the intricate web of patient encounters. We have all heard the buzzwords “population health,” “bundled payments,” “full risk” and “value-based purchasing.” These phrases signal the movement from a reimbursement model predicated on frequency to one based on patient outcomes. In essence, the new reimbursement paradigm forces us to reconsider yesterday’s methods.
Traditionally, hospitals used their resources to report quality data, as required by the Centers for Medicare & Medicaid Services (CMS). They maximized reimbursements by capturing all patient comorbidities and by working with physicians to minimize the length of stay. This model improved the profit margin with medical DRGs such as CHF, AMI, stroke, pneumonia and COPD by standardizing care, improving quality and lowering costs. Surgical services were the financial engine for hospitals because of their high per-case contribution margin. Administrative oversight was limited mainly to staffing and support services since there was little need for standard evidenced-based practices. Recently, this dichotomy has expanded on a national scale with DRG improvement projects focused solely on medical disease states.
Now, however, with payment structures shifting away from a DRG-based fee-for-service, surgical services are quickly becoming a cost center. Hospitals thus require an entirely different C-suite structure, and along with that change comes the need for a new administrative skill set.
ASA has proposed a concept to address the current fragmentation in surgical care – the Perioperative Surgical Home (PSH). The PSH is a patient-centered, physician-led, multi-disciplinary and team-based system of coordinated care. It guides the patient through the entire surgical experience from decision to discharge. The PSH is above all value-based and thus provides a strategic opportunity to engage both employers and payers.
With the aim of meeting the dual goals of improving workforce health and decreasing productivity loss, employers sit at the forefront of health care redesign. This is a tremendous responsibility that demands an administrative skill set, oversight and vision currently lacking in the C-suite. Senior management positions have ballooned over the years to keep up with the complexities of medicine. In addition to the traditional positions of CEO, CFO, CNE and CMO, hospitals now have a Chief Experience Officer, a Chief Population Health Officer, a Chief Innovation Officer and a Chief Information Officer. Is the current composition and influence of senior leadership commensurate with changing health care needs? Is it time to reevaluate the C-suite?
We should base who gets a seat atop the physician executive administrative pyramid on who is capable of reducing clinical variation and fragmentation in care. Leaders should be visionary, capable of working with multidisciplinary teams and able to improve quality in measurable ways. The cost of C-suite positions is no doubt high. The positions, either directly or indirectly, need to reduce costs and improve quality under risk-based and capitated contracts. On the other hand, if there is a managerial gap in a vital clinical area such as surgical services, then organizations need to create positions that will secure the critical outcomes essential for future financial viability.
Ultimately, I ask: Is it time to break up the chief medical officer role? Historically, the CMO served as the conduit between physicians and senior management, focusing solely on inpatient medical care. In the new health care paradigm, clinical management oversight must span the entire spectrum of a patient’s episode of care. It cannot be confined solely to encounters in the hospital. This oversight is now impossible to manage with one position. It is my belief that the creation of a Chief of Medical Services (COMS) and Chief of Surgical Services (COSS) is necessary for the success of any health care system.
The Perfect Storm
The confluence of clinical
complexity, risk contracting and fragmented care has created a fertile
climate for the creation of the Chief of Surgical Services as an
integral member of the C-suite. No health care organization can succeed
without visionary leadership in the surgical specialties. Below is a
tentative list of COSS responsibilities:
1. Coexist in a shared operative environment with maximal utilization of
services by developing a sustainable infrastructure that supports the
surgeons, anesthesia and the patients they both serve
2. Decrease clinical variation with the aid of robust databases and clinical analytics.
3. Consolidate high-acuity procedures so as to reach the critical volume necessary for an efficient supply chain, specialized nursing care and standardized anesthetic management.
4. Develop surgical programs spanning preoperative assessment through post-acute care that demonstrate high quality and value for the surgical patient, in keeping with the ASA’s PSH.
5. Matrix with medical subspecialties to maximize patient preparation and perioperative management through post-acute care.
6. Develop centers of excellence for local, regional or national destination surgeries.
While the benefits in the establishment of the COSS position are self-evident, there are a number of barriers to establishing this new role:
1. It is a new idea, and health care organizations are risk averse.
2. In a climate of decreasing reimbursement, adding another C-suite position is a tough sell.
3. Most CMOs across the country have a primary care background. There is an understandable lack of local knowledge, resulting in the inability to see the gap in surgical leadership or “share the turf” with an additional senior physician colleague.
4. Nationally, surgical services oversight and visionary planning resides with a COO, who commonly lacks experience in the intricacies of surgical services and may balk at expanding the C-suite table.
There are currently too many departments and too many chiefs, which has contributed to the fragmentation in services and patient care that we now confront. Any consideration of a new C-suite position must, of course, pass the test of improving coordination and integration in the delivery of clinical services. Equally important is the ability to decrease clinical variation, resulting in higher quality and lower costs. Answering the call would be a physician executive armed with the tools of local surgical service knowledge, proven leadership skills and advanced management training. The following case study illustrates what is at stake:
EdisonHealth, Westlake, Ohio.
■ EdisonHealth selects destination hospital “Centers of Excellence” based on appropriateness of care.
■ Hospitals receive an “aggressive, all-in” payment for spine, valve or transplant surgeries.
■ Covered patients receive consultations, care coordination (similar to the ASA’s PSH approach), plus travel, food and lodging.
■ Destination surgical services are covered at 100 percent.
■ The local surgical option requires deductibles and co-payments.
■ An employer with 10,000 employees can expect 10 to 20 employees selecting the destination surgery option and up to $2.5 million in health plan cost savings.
As we can clearly see, when surgical care becomes coordinated, less fragmented, economized and based on large volume, low clinical variation, aligned financial incentives and strong, visionary administrative oversight, the desired financial results will follow.
With the addition of the newest member to the health care C-suite, the Chief of Surgical Services, we now have the opportunity to fill this senior leadership gap and ensure the viability of systems looking to prosper amid the continued paradigm shift in American health care.
Myles Gart, MD
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