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Winning and Losing in Healthcare

Written by: Mediware on Monday, June 15, 2015 Posted in: Inpatient Rehab

Last week, Mediware hosted its annual conference for respiratory and rehabilitation professionals focusing on “Reaching Peak Performance” with Population Based Healthcare. Coincidentally, Frank Cohen posted a piece on the RACmonitor eNews site about the futility of healthcare compliance and its similarity, and differences, to game playing theory by Dr. John Forbes Nash:

The Nash Equilibrium: A Study in the Futility of Striving for Healthcare Compliance. While some will argue that our healthcare system and its operation is not a game, there certainly are many winners and losers in the healthcare environment. All participants are challenged with the accountability for transparency of cost and effectiveness of their participation in the game. I immediately saw the analogy with Cohen’s paper.

To begin, the players in healthcare do not have an equal standing or role. Healthcare and games have rules.

Games have a clear objective; i.e. capture the flag, bankrupt all players, dominate the world. However, unlike most games, healthcare does not have a single clear objective for winning or losing, just rules on how to play. Providers must adhere to rules to get paid for what they do. Patients must follow prescriptions to get better. Payers have regulations to administer payment and manage the financial risks of their insured. For all involved, if you are going to play, you must agree to comply with the rules. Compliance is the entry fee for playing.

The healthcare game gets complicated when the players’ motivations, objectives and strategies to win differ. For example, a healthcare provider treats a patient and submits a claim to the payer. The provider gets paid, he wins; payment gets denied, he loses. The more the bills, the more he wins.

When the payer pays every bill submitted, they lose. Reduce the payment and the payer wins. Payers have a multitude of reasons (codes) to either deny or reduce payment for the services the provider has submitted. The more a payer must pay, the more he loses.

When patients receive care and get better, they win. Don’t follow prescriptions, they lose. If they must pay a portion of the provider’s bill and don’t get better, they lose twice. If the patient cannot pay for care and does not receive it, he loses.

Currency and volume have defined winning and losing for players in healthcare. The win-loss ratio for each player has directed their strategies and methods to achieve more wins. When winning is the player’s specific objective, each will move to win for self-interest and take every advantage at their disposal to do so. To make the matter worse, the players in healthcare do not know the rules the others are playing by, they don’t have access to each other’s information, and as Cohen identifies, players “do not know the other player’s strategies”.

The cost of playing our healthcare game has become unaffordable, requiring controls to curb spending and adding more players to recover money when rules are not followed. The additional expense of rule enforcement and revenue recovery quickly increased expense to the system without appreciable impact on outcome or efficiency. The government has stepped in to refocus upon what the object of the healthcare game should be; specifically, the health status of the nation’s population and an affordable system to assure healthcare delivery access and effectiveness. Population-based healthcare and Accountable Care policies support the objectives of Triple Aim: (1) make health care more accessible, safe and patient-centered; (2) address environmental, social and behavioral influences on health and health care; and (3) make care more affordable.

A noble purpose; but without player buy-in, objectives are just nebulous aspirations. Not all players in the new healthcare game are in total agreement. The “how does this affect me?” question perpetuates each player’s historical perceptions of winning and losing.

It is all about restoring the sense of pride in our healthcare abilities. The national push from government must utilize the diverse healthcare culture being affected and exploit its significant strengths: a deep-seated concern about patients, providers, and employers; underlying pride in the history and purpose of medicine and patient care; widespread respect for the players; and a large group of dedicated professionals.

The rules of how the game is to be played are changing, and each player is reacting by developing new strategies for winning. But this time, currency and volume are not the only objects of the game; effect and outcome define winning.

Changing the rules on how to play will not be enough, even if quality and value are criteria added for payment. Strategies focused narrowly on managing medical expenses to reduce the cost of claims while alienating the patients and providers have not worked. Understanding and agreement on common goals will be required if the healthcare game is to be worth playing at all.

Transparency beyond cost and price information will be required. Information about each player’s success strategy and rules will better enable all players to reach peak performance in their healthcare role performance. Accountability to openly share information will require an enforcement effort greater than the revenue recovery program.

The health care game will continue and some will attempt to control its costs by adding new rules. Restricting payment further will add complexity with enforcement costs, continuing to add expense and burden to providers. Rules to focus on payment without full disclosure of the strategies players use to win will not accomplish the objectives of the Triple Aim.

What has been missing is the goal to evolve the nation’s healthcare delivery system where all players are at risk and are eliminated when they are unable or unwilling to meet the minimum standards and performance objectives. The goals of the healthcare game must change from caring only for the sick to include caring for the non-sick to keep them healthy. This is not a rules-based strategy; this is a cultural shift tugging at the deep-seated values of what is expected of healthcare.

The sickness industry is overused and inefficient, spending $2.8 trillion annually. The healthcare industry is much larger ($5 trillion). Transitioning the game to a larger playing field and shifting the objective from sickness to population health management puts more resources in the game to better realize Triple Aim goals. The distribution of currency between players is not the game objective. Simplifying currency and payment rules must occur with open transparency of cost and effectiveness for appropriate and agreed upon player objectives, each understanding the win strategy of the other. Most importantly, recognizing that healthcare players are on the same team and winning is defined by the nation’s health status outcomes.

Time has come to put on our game face and join in the hunt for success.


Photo compliments of an unexpected attendee at the 2015 Mediware Annual Conference.

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