Big Business is Pressuring Hospitals to Cut Mistakes -- and Costs

Big Business is Pressuring Hospitals to Cut Mistakes -- and Costs
By David Brown

Larry Becker, the director of benefits for Xerox Corp., remembers his aha! moment.

Two years ago this month he attended a meeting in Washington where a General Motors executive talked about the Institute of Medicine's 1999 report "To Err Is Human." The report estimated that as many as 98,000 Americans die each year from medical mistakes.

GM has no small interest in the matter, the executive, Bruce Bradley, told the audience at the Washington Business Group. The automaker is the largest private purchaser of health care in the country, covering one out of every 200 Americans.

If the Institute of Medicine's numbers were right, he said, then 1.3 GM employees, retirees or dependents died every day from medical mistakes. If accidents were killing people in GM's plants at that rate, Bradley said, the outcry would have closed them down long ago.

"I really sat up and took notice," Becker recalled recently. "I said, 'I could do the same numbers for Xerox.' These numbers have real magnitude."

He wasn't the only one who was impressed. Sitting next to him was Renee Brownstein, at the time Eastman Kodak's benefits director. "It just kind of blew your mind," she remembered. When the meeting was over, the two shared a cab to the airport and talked about the numbers the whole way.

Today, Xerox and more than 100 other large corporations (along with a few labor unions, nonprofits and government agencies) are embarked on a campaign to reduce medical errors, increase patient safety and enhance the care of hospitalized Americans. They've drawn up a short list of specific goals they want the country's hospitals -- or at least the big ones -- to meet in the near future and, in effect, have nailed the list to the institutions' doors.

For starters, it's unusual for industrial companies to give advice directly to hospitals and doctors. It was always assumed that corporations making cars or photocopiers didn't have the expertise to engage in such meddling.

Furthermore, the campaign is premised on the idea that while the companies wield big sticks, they probably won't have to use them as they step into the touchy marketplace of medical care and treatment choice. Instead, they hope to achieve the goals of safer, better and more efficient hospital care by sponsoring what amounts to a Patients' Crusade. They want to get their employees to walk away from from poor-performing institutions.

Perhaps most important, the campaign potentially offers a more palatable way to control -- or at least slow -- increases in health care costs in the United States, which are rising steeply again after a brief lull in the mid-1990s. Against that apparently unstoppable trend, this strategy is the Sleeping Giant -- powerful, slow to wake and so big it's been overlooked by nearly everyone.

The 'Recommendations'

The main embodiment of this strategy is an organization launched two years ago called The Leapfrog Group, a collection of the country's biggest corporations that have agreed to promote and publicize three specific hospital practices:

Computer software systems that replace paper-based ordering of drugs and medical tests. "Computerized physician order entry" (CPOE) technologies eliminate errors that result from misread handwriting and can help prevent overdoses, incorrect doses, drug interactions and allergic reactions arising from medications. The more sophisticated systems also offer physicians advice on diagnostic testing.
Limiting intensive care unit (ICU) staffing to physicians specially trained in intensive care medicine. Research has shown that ICUs with so-called "closed staffing" have substantially lower mortality rates than ones in which primary care doctors manage the treatment of critically ill patients with experts providing consultation when asked.
The limitation of certain high-risk procedures to hospitals that do lots of them. The relationship between high volumes and good outcomes in coronary artery bypass surgery and numerous other complicated therapies has been evident for years. The Leapfrog Group calls this goal "evidence-based hospital referral."
The founders of The Leapfrog Group chose the three goals carefully. They consulted many health services and outcomes researchers, says Suzanne Delbanco, executive director of the Washington-based organization, and in effect asked: "If you were to come up with the seat belts, air bags and anti-lock brakes for the health care system, what would they be?" The three agreed upon are backed by overwhelming and incontrovertible evidence of benefit.

The value of the three "leaps" (as their proponents call them) may be beyond question, but that doesn't mean they're being eagerly embraced by the nation's hospitals.

"I think it's safe to say that the majority of our constituency is uncomfortable with Leapfrog," said Richard H. Wade, senior vice president of the American Hospital Association. "They are holding out a set of standards that it would be impossible for all but the most sophisticated hospitals to meet."

Only about one-third of hospitals are in a position to make the investments necessary to buy CPOE systems, which cost between about $2.5 million and $10 million, Wade said. (About one-third of hospitals break even and one-third lose money, he added.) Many have other high priorities intimately related to quality and safety, such as hiring more nurses and replacing aging facilities.

There's also more than a touch of resentment that, after a decade of what appeared to be single-minded focus by employers and insurers on controlling hospital costs, "they're now saying, okay, let's look at quality," Wade said.

The Leapfrog Group doesn't argue with a lot of that, which is why so far it has directed its campaign to a few urban areas and has avoided any threatening language.

As the Leapfrog effort begins, statistics show plenty of room for improvement. Only 5 percent of American hospitals have CPOE systems. Only 10 percent of them meet the closed-staff ICU standard. The number of institutions meeting the volume standards depends on the procedure.

About half of coronary artery bypass operations and two-thirds of carotid endarterectomies (operations that remove blockages in the arteries supplying blood to the brain) are now done at what the group considers "low-volume hospitals."

Getting the Word Out

At the moment, The Leapfrog Group is promoting the three goals mostly by publicizing them. It has created a survey and focused on getting hospitals in six regions -- Atlanta, California, East Tennessee, Minnesota, Seattle and St. Louis -- to fill it out. (A list of 10 additional target regions is to be announced next month.) The survey results are posted on the organization's Web site, www.leapfroggroup.org, as are explanations of why consumers should care about such things.

The notion that medical errors waste money "was one of the few business propositions one could take to senior management and they would accept without proof," said Charles R. Buck, who until retiring last year was head of health care quality initiatives at General Electric. "They know that when you're error-free from the customer's point of view, money just seems to fall out of trees."

In Reality

The economic pressure The Leapfrog Group's members are exerting on hospitals and doctors is subtle and will take years to bear fruit. It's not like the sudden arm-twisting that insurance companies engaged in a decade ago to get the price concessions those same employers demanded.

Consider, for example, what's happening in New York, Atlanta and Seattle.

Five companies in the New York City area, with a total of about 100,000 employees and dependents in their health plans, have agreed to pay small bonuses to hospitals meeting the first two Leapfrog goals, CPOE systems and closed-staff ICUs.

They will add 4 percent on top of whatever the hospital is reimbursed for a person's care. Of the 148 hospitals in the region served by Empire Blue Cross and Blue Shield, 10 have signed up for the program.

The companies -- Xerox, IBM, Pepsi, Verizon and Empire itself -- expect to pay a total of about $2 million in bonuses over the next three years. That would buy one hospital an entry-level CPOE system.

Maimonides Medical Center, a 755-bed hospital in Brooklyn, has CPOE and is acquiring a totally computerized patient-record system that will go into use later this year. The hospital had revenues of $512 million in 2000. It expects to receive between $15,000 and $25,000 in bonuses this year.

In the Atlanta area, Delta Air Lines has 75,000 health plan members, almost all of whose inpatient care is provided by 21 hospitals. All the institutions have filled out the Leapfrog survey, most at the request of Delta officials who met with executives of about a dozen hospitals and hospital chains.

None of the 21 has CPOE systems. None has closed-staff ICUs.

"We have indicated that these are the things that we will value in our purchasing decisions in the future," said Miles Snowden, a physician and director of health services for Delta. "We have told them that it is our goal to provide whatever incentives are necessary to have more than half of our hospital discharges occur from facilities that meet all three leaps by the end of 2004 in urban areas."

What sort of incentives?

Snowden said it begins with good publicity, and may move on to lowering co-payments for patients who choose hospitals that meet the goals. Ultimately, institutions that don't meet the goals "within a reasonable period of time" may be dropped from preferred networks of reimbursement.

"We don't believe that the system is short of money for these investments. The issue is deciding where the investments go," Snowden said.

In Seattle, a delegation from Boeing and the International Association of Machinists and Aerospace Workers has met with 18 hospital systems that run, in all, about 25 hospitals. As with Delta, the delegation's main purpose was to convey a message to the hospitals' executives that they may want to consider the Leapfrog goals when mapping out long-term budgets.

All the Seattle hospitals have filled out the survey. About half provided commitments to install CPOE systems in the next two years, and some others have said they will have them by 2004 or 2005, said Greg Marchand, Boeing's senior manager for health and welfare operations. A few meet the ICU standard, and others are working on it.

About 70 percent of Boeing's employees make their health-plan enrollment selections online. The company is promoting the campaign on its Web site.

Washington Post March 26, 2002; Page HE01