Healthcare's New Math

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OK, time for a pop quiz based upon reading Access Imperative by McKinsey and Company.

Dr. Dan is employed by Big Box Health Care to provide primary care health services 40 hours a week. In the last month, he averaged 24 15-minute appointments daily. 

1. His unused capacity is

  1. Eight appointments daily
  2. 25%
  3. 2 hours

Correct answer – b. Unused capacity is what percentage of the time paid is not being spent with patients. Providers are vessels to be filled and as the report indicates Unused capacity = less productivity = less access for patients.

2. How can Dr. Dan best increase his fill rate?

  1. Increase backfill
  2. Charge for no-shows
  3. Increase weekend and evening hours

Correct answer – a. While all answers are correct, Dr. Dan’s fill rate (number of appointments filled or the inverse of unused capacity) is best corrected when the office aggressively moves new patients, and waiting list patients into slots canceled more than 24 hours in advance (backfill). Charging for no-show appointments decreased patient satisfaction. Increasing convenience for patients is an excellent second choice. As stated by McKinsey, “...improving  consumer  satisfaction  may  require  offering  evening  and  weekend  appointments,  and the physician  may  have  to accept  that  their  incentives  will  be  based  on  reported  consumer satisfaction,  not  just  productivity.”

3. Dr. Dan’s, pod manager is working on the annual report of profit and loss for the clinic. Which is a realistic estimate of Dr. Dan’s financial contribution?

  1. Net profit of $50,000
  2. Break even
  3. Net loss of $70,000

Correct answer – c. As McKinsey points out, employed physicians are a net loss to health systems [1], and primary care is the least costly. Specialists represent even greater losses; surgical specialists cost health systems $180-200K annually. A pod is a new term for teams, think of dolphins and other herding mammals. 

4. Dr. Disruptive has reported to the pod manager than there is excessive paperwork to be completed and that he only has one nurse and one extender during office hours. What is the best way to characterize these “concerns.”

  1. More complaining from a newly “on-boarded and ‘older’” provider
  2. An issue of mindset
  3. A legitimate concern to be addressed to increase fill rate

Correct answer – b. This is simply, in the words of McKinsey, a mindset problem, perhaps along the lines of the old adage about mind over matter. “We don’t mind, you don’t matter.”

5. Consider this table:

 

Criteria

Most important in choosing a provider

Quality of care

41%

Consistency of care

5%

Office location and appearance

11%

Appointment availability

4%

Convenient hours

4%

Ease of getting to facility

4%

Range of services provided

3%

Customer experience of providers

3%

Out of pocket costs

11%

 

Is the following summary, true or false: “When asked  to  select  the  criteria  that  matter  most  to  them  when  choosing  a  primary  care  provider,  respondents  highlighted  appointment  availability  and times  that  meet  your  needs  as  two  of  the  top  six  factors  among  20  available  options.”

Correct answer – true. But unrelated to the larger truth, that quality of care was most important. Now since that is difficult to measure let us not bother and instead focus on that unused capacity that is reducing patient access. [2]

6. Essay question (Extra-credit) Discuss the following quotation (emphasis added)

“Improving  front  door  access  is  an  essential  part  of  an  integrated  growth  strategy,  especially  given  the  imperative  for  health  systems  to  expand  both  their  share  of  lives  and  share  of  wallet among  consumers  age  45  to  64  with  commercial  insurance.”

Instructional Notes

All of these materials can be found in a new McKinsey and Company instructive report on access to healthcare. As a global consulting firm they specialize in solutions which include best-practice appointment length, removing authority from the “individual clinic-level operators” and shifting it to our centralize overlords. The new metrics include productivity, scheduling, patient satisfaction and revenue cycle results. But the quality of care and outcomes are nowhere to be found. Now that healthcare is an industry and physicians and nurses are providers, the productivity experts have been set free to optimize operations. Clinicians continue to accept regimentation branded as best practice appointment lengths, for a better work-life balance. Patients continue to accept the prospect of lowered cost, branding them as consumers and healthcare as a commodity. McKinsey's report is an invaluable service if we become more "woke" to the Faustian bargains we make.

[1] Based on a survey of 49 large health systems employing 13,000 physicians. In part, this is because revenues generated by these physicians in terms of testing, imaging, hospitalization, and procedures is accounted for in other sectors and they are not “credited” to the clinicians who are prescribing or providing specific services.  

[2] Based on their survey of 3000 adults 

Source: The Access Imperative  McKinsey and Company