continued from HFMA Visions, Issue 2
There were 13 delegates from each side of the Atlantic, and I was paired with Malcolm Turner, a Finance Director for a large health trust in Swansea, Wales. The exchange took place as follows:
June 22-26: U.K. delegates visited the U.S.; concluding with a symposium on Friday, June 26, in Washington D.C.
September 21-25: U.S. delegates visited the U.K., concluding with a symposium on Friday, September 25, in Windsor.
The idea is that each delegate arranges site visits and meetings when hosting their U.K. counterpart (and visa versa in the U.K.), and then all delegates travel to a single location for a symposium arranged by National HFMA on Friday of each of the two weeks. When Malcolm visited the U.S., I had arranged meetings with various individuals within Summa Health System as well as University Hospitals, the Cleveland Clinic, Affinity Medical Center and the Crystal Clinic. We also toured several of the facilities in conjunction with these meetings. I’d like to thank everyone who cleared their calendars for Malcolm and I during this time and helped make his visit to Northeast Ohio an enjoyable and interesting one, particularly Mike Rutherford and his team at Summa and Jim McNutt at SummaCare; Don Paulson, David Fye, and Mike Vehovec and his team at UH; Karen Mihalik and Anna Sulewski from the Cleveland Clinic; Jim Hutchinson at Affinity; and Jim Miltner at the Crystal Clinic. Everyone we met with rolled out the red carpet at their facilities and openly discussed the challenges that they face. When I traveled to the U.K., Malcolm reciprocated by escorting me around to several of the facilities his trust operated and arranging a variety of meetings with leaders at his and other organizations for me to hear about how they operate and to see how healthcare works in the U.K.
Comparing healthcare systems
When comparing the healthcare systems of the U.S. and the U.K., there are some major differences, but there are also differences between the countries that make up the U.K. (England, Scotland, Northern Ireland and Wales). Each of the four countries are able to make independent decisions about their healthcare delivery system despite the fact that they all report up to the National Health Service (NHS). All of my first-hand experience was in Wales, but I gleaned a lot of information about the rest of the U.K. while there. Generally speaking, the healthcare systems in Scotland, Northern Ireland and Wales were run by health trusts that are part of the NHS. The hospitals are essentially departments of the government just as much as the police and the post office. England had private foundations operating hospitals, in addition to NHS-owned facilities. The private foundations seemed to operate similarly to U.S. not for profit hospitals in that they have the ability to earn a profit and use their earnings to purchase new capital. Below is a summary of the most significant differences between the U.S. and Wales system, based on my experience.
What Revenue Cycle?
In Wales, only about 10% of all patients have private insurance; otherwise, everyone is covered by the NHS. Accordingly, there is little focus on billing and collection. The health trust I visited had only two employees that did all the billing and collection for the entire trust. The trust was essentially a governmental cost center and received a budgeted allocation on an annual basis within which it was required to manage. They had a system of HRG’s, very similar to our MS-DRG’s, but it was used for statistical reporting purposes only. Interestingly, they told me they were generally 18 weeks behind on medical records coding, and they catch up somewhat at year-end in order to file their annual cost report.
Aging Facilities
An obvious difference between the U.S. healthcare system and that of Wales was the general age and condition of the facilities. While I visited multiple sites, I only toured one facility, Morriston Hospital, which was a 350 bed, hospital in Swansea. They had a burn and plastics unit they were very proud of which had only been opened for about a year, but it seemed that the worst areas of Barberton Hospital where I work (which is by no means the best, most modern facility in the area) were in better condition than the best areas of the facility within Moriston, their newer OR suites possibly being the only exception. Morriston was a sprawling facility, including many sections that were built during World War II that were still in use. Further, in the U.S., we have private and semi-private rooms, but in the U.K.. isolation rooms are used only for the most contagious patients. My observation was that patients were generally in good spirits, watching a single, centrally located, television and chatting with their roommates. One patient told me that he liked the arrangement because he always had someone to talk to.
Wait Times/Capacity
In the U.K., non-emergent procedures generally require (what we would consider) lengthy wait times. These wait times vary depending on the procedure, but average around 18 weeks. While it should be noted that emergency procedures are performed immediately, this would be way too long for most Americans. Those that that can afford private insurance are moved to the head of the queue, but the cost of insurance is seen by most people in the U.K. to outweigh the benefits. Additionally, most people there are happy with the wait times because they have come down dramatically over the past few years (i.e. 18 months down to 18 weeks).
The wait times are caused by the fact that healthcare facilities are generally full. Interestingly, the hospital I toured was considered full on that day with ambulances stacking up outside (all other nearby hospitals were full also); however as we walked around I noticed several beds and even whole units that were empty. When I asked about this, they simply told me that those beds were not “staffed” and the money was not in the budget to staff those beds.
Hospitals in Wales have “targets” for wait times by procedure that they are pressured to achieve, but achieving the targets at the expense of spending over budget is not an option. As a result, the emphasis of management is on increasing throughput and cost efficiency.
Speaking of throughput, another related problem is that the length of stay is much higher than in the U.S. While touring Morriston Hospital, the utilization review manager told me that she had a list of all the patients in the hospital that had been there more than 10 days and she was working to try to get them discharged. Typically, the comparable effort at a typical U.S. facility would include all patients, not just those with a stay exceeding 10 days. One reason for the long stays is the lack of sub acute facilities to transfer patients to.
Healthcare Arms Race
There is no competition for the healthcare market in Wales. Contrast that with Northeast Ohio where each city has two or more competing hospitals. While competition certainly has a positive impact on quality, it can also produce excess capacity and require competitors to continually build new and improved facilities and have the latest technology in order to keep up with the market. It was very clear to all in the exchange program that U.S. hospitals go what the British see as above and beyond in terms of patient satisfaction. They likened U.S. efforts in patient satisfaction to those of hotels, wanting the patients to have a pleasant stay, not just be returned to health.
Free at the Point of Care
The culture in the U.K. is such that healthcare is considered a right and the political mantra is healthcare is to be provided “fee at the point of care.” Accordingly, there are no charges for physician or hospital visits nor for pharmaceuticals. It seemed that when traveling with Malcolm, we paid to park everywhere (and I mean everywhere!) except at the hospitals. The only exception was a regional tertiary care center in Cardiff that had a private developer build its parking garage. The developer leased the garage and was allowed to charge a fee for parking.
Technology
Generally speaking, the technology used in healthcare in the U.K. is behind that used in the U.S. That said, the trust Malcolm worked for used Oracle for its accounting, payroll and accounts payable and I saw some innovative excel techniques used in the accounting areas. Aside from these observations, revenue cycle technology is non-existent, and there is no equivalent to our charge master, patient costing systems, or electronic medical record systems according to the people I spoke with.
Interestingly, each person in the U.K. has a unique patient number that is used by any healthcare provider they see. Do the fragmentation of the U.S. healthcare system, we have been unable to achieve this to date. In this regard, when the U.K. catches up in terms of technology, they will be well-positioned to leverage it.
Politics
As stated previously, healthcare is run by the government in Wales, and all hospital employees are therefore employees of the government. The political officials frequently use healthcare to maintain their public support and stay in office. As a result, the politicians often insert themselves in the management of hospitals in their constituencies. One example of this is the mandate that the Wales trusts reduce their costs by $32 million pounds per year . . . but without laying off any employees because that would likely result in an outcry against the elected officials. Another example is an elected official’s refusal to allow an old, outdated hospital in their town, which was deemed “unfit for purpose” by the trust management, to be closed. While I was thinking this was a difference between U.S. and U.K. healthcare, someone reminded me of Dennis Kucinich. Enough said.
Similarities
While the differences are very interesting, I learned that, ultimately, most of the issues facing healthcare managers are the same in both the U.S. and the U.K. Ultimately, those running the healthcare systems in both the U.S. and U.K. believe their system, in its current form, is unsustainable. In the U.S., we’re discussing healthcare reform legislation; and in the U.K., England in particular, they are making changes also.
Both the U.S. and U.K. are trying to cut costs out of the system. The biggest issue facing the Wales healthcare system is a government deficit that is requiring the system to trim hundreds of millions of pounds from its annual budget (a significant percentage for a small country). Another example is the NHS’s Institute for Innovation and Improvement which studied the treatment pathways that improved outcomes and reduced costs for the 50 most common HRG’s (similar to U.S. MS-DRG’s). Its recommendations were published, and the resulting cost savings figures were used to lower the national payment rates paid to private foundation hospitals in England. As a result, all hospitals are essentially forced to adopt the recommendations to avoid being upside-down on the reimbursement.
Alignment of physicians is a challenge in both systems. In the U.K., family practice physicians are generally self-employed and receive the majority of their income from the NHS on a capitated basis. Specialists are generally employed by the health trusts as hourly employees, and from discussions with Malcolm and others, it is a continual challenge for the managers of the trust to maintain the specialists’ productivity.
Quality and prevention are also significant areas of focus currently in both the U.S. and the U.K.; however the U.S. seems to be further down the quality path than the U.K.
I could elaborate on any of these subjects, but as a final word, this is an annual program of HFMA that I would definitely recommend to anyone that has the opportunity. The way the participants are paired up and spend several days with each other is a very effective way to delve into the issues, and the symposiums on both sides of the Atlantic were superb in terms of speakers and interaction. You’ll come away with a deeper understanding of the global issues, some appreciation for aspects of our current system, and undoubtedly some ideas you can implement in your organization as a result.
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