Books and Publications

‘Healthcare From the Trenches’— A Must-Read in 2020

Yet again, another book has recently been published covering the shortcomings of the current U.S. Healthcare system. But its unique approach in allowing the voice of key participants in every healthcare transaction, namely those who provide care and the ones that receive it, make it a very worthwhile read. I am referencing “Healthcare From the Trenches” by Dr. Alejandro Badia.

There certainly is a wealth of writings over the past century criticizing healthcare delivery in the U.S., while also offering recommendations for improvement, by many frustrated medical students, interns, residents and very seasoned physicians and surgeons.  What makes Dr. Badia’s new book a good read is, not only his personal reflections on what drove him to pursue a career in medicine, the long and arduous years of training, as well as the incredible pathways he followed to become an the outstanding Orthopedic Surgeon, but also his current introspections on the challenges facing all of us in the midst of the COVID-19 pandemic, and the potential new and innovative technical and medical approaches we must all consider for a more cost-effective and accessible healthcare delivery system.

Cost of healthcare and accessing it, by far, remain our two biggest challenges, and Dr. Badia’s strong financial acumen and very successful entrepreneurial experience also provide for some great insight.  And in my introductory remarks, I said that this book gives voice to the key participants in every healthcare transaction, so you will also read about various practitioners, patients, administrators and policy makers who comment on the real life and serious problems confronting our daily lives. 

Lastly, I want to thank Dr. Badia for giving me the opportunity to provide some of my own observations in his book, regarding what I think are some of the burgeoning issues facing our healthcare industry, all drawn from my 40 years as a Hospital and Health System Executive, mostly serving urban based teaching hospitals in the Northeast.

If you’re interested in my comments, please find them below. You can also download the book here.

Sincerely,

John N. Kastanis, MBA, FACHE

Browse excerpts below mentioning John N. Kastanis from Dr. Badia’s “Healthcare From the Trenches.”

(Re-printed here with the permission of author, Dr. Alejandro Badia, FACS.)

THE ECONOMICS OF HEALTHCARE

Chapter 8 – The Hospital System Behemoths and Bureaucracy > Page 265 · Location 4365

To some degree, hospitals are struggling because of the availability of many other options. They must focus on their strong suit–caring for truly sick patients and performing higher risk procedures. While the public continues to depend too much on them, hospitals remain a big reason for the high cost of healthcare. Some of it is due to habit, but also the lack of patient education about alternatives. This becomes evident when I meet people in social situations and they ask, “Oh, you are a doctor. What hospital are you at?” I reply, “Why do you assume I’m at a hospital? I am not a heart surgeon. I’m not a vascular surgeon.” Of course, a doctor is not going to perform AAA (abdominal aortic aneurysm) resection or cardiothoracic surgery and send the patient home right after. THAT is the purpose of a hospital. Yeah, I’m a real hit at the punchbowl…. John N. Kastanis, M.B.A., F.A.C.H.E., a hospital executive with over 40 years’ experience in executive leadership roles for urban-based teaching hospitals and consultative services, offers his insights: “In the category of hospitals and health systems, labor and supply chain costs are the most significant amounts in their operating expense budgets, representing 60 percent and 17 percent of spending, respectively. The majority of hospitals have minimal or nonexistent cost accounting measures in place, and therefore, their cost-reduction initiatives tend to focus on Lean and Six Sigma, but few look at clinical variation or overall cost accounting, where the most significant savings are found. With a cost accounting system in place, hospitals can track their direct and indirect costs. Examples of direct costs include nurses, physicians, unit clerks, and lab technologists. Indirect costs include administrators, controllers, and overhead. Another best practice within cost accounting is separating all direct and indirect costs into fixed or variable costs. This type of financial data could help establish informative ratios for both labor and supply chain utilization, and yet many hospitals are still years away of identifying more cost savings. This will prove to be a big challenge as health organizations will need to cut their cost structures by at least 25 to 35 percent to compete for a place in a narrow or tiered insurance network and become a provider of choice. “Other major drivers of costs stem from regional variation in utilization of health resources. For example, the cost of a surgical hernia repair in New York City far exceeds the cost of having it done in Topeka, Kansas. Again, labor costs vary, based on different regions in the nation, with many health care workers unionized, particularly in urban areas, while manufacturing, deliveries, and storage costs tend to be much higher than rural and suburban areas. Also, U.S. healthcare administrative costs are six times the cost of other rich countries. “To date, there are still unexplained reasons for regional variation in utilization of health resources, but over the years, CMS has identified geographic variation in Medicare spending per capita with many health providers in the Northeastern, Southeastern, Southwestern states, and California providing comparable patient care with significantly higher costs to the consumer. Many scholars have concluded that this type of variation is a result of a lack of standardization of clinical procedures and treatments; over utilization; lack of evidence for treatment; and ineffective clinical performance when treatments are known. The landmark IOM (Institute of Medicine) report “To Err is Human” (1999) estimated that 44,0000 to 98,000 deaths occur each year due to medical errors, which sparked serious discussions about patient error. More recent reports suggest that while there has been progress in some areas, significant improvements in preventable harm are still needed. Following the IOM report, the Institute for Healthcare Improvement (IHI) developed an approach to optimizing health system performance. The IHI’s belief is that new designs must be developed to simultaneously pursue three dimensions, which they call the “Triple Aim”: Improving the patient experience of care (including quality and satisfaction); Improving the health of populations served by each health care organization; and Reducing the per capita cost of health care. “Most providers have embraced the Triple Aim, but in varying degrees of success, ergo the continuing variation of care throughout the nation. “Within each hospital, one of the most effective ways to improve overall patient care while maintaining quality is to have management work collaboratively with all the clinical leaders in each organization. Common approaches include the agreement on best practices for each specialty, redesign of order sets, creating new clinical pathways, and then monitoring variable costs; reduction of complications and adverse events; and length of stay. This requires access to volumes of clinical data and perseverance from all involved parties. It is a long and arduous process, but once it is established, along with periodic reviews of quality improvements, overall cost savings result from reduced readmission rates, adverse events and length-of-stay.

Chapter 8 – The Hospital System Behemoths and Bureaucracy > Page 267 · Location 4408

“In summary, the hospitals and health systems that consistently provide high-value care share the following attributes: 1. thinking beyond the hospital stay; 2. cutting waste, not safety; and 3. engaging the frontline team in improving the cost-effectiveness of needed care. “In reference to thinking beyond the hospital stay, many health organizations have embarked on Population Health strategies, drawing from one of the Triple Aim dimensions: improving the health of the patient populations being served. This new focus also helps in developing value-based care, inasmuch as it has major health providers looking at social determinants that are the root of many chronic illnesses, such as malnutrition, diabetes, asthma, hypertension and obesity, compounded by mental illness and substance abuse. This process has resulted in health providers aligning with managing agencies in their respective communities that oversee basic services such as Transportation, Housing, Education and Nutrition. These types of collaborative efforts will ultimately result in more denizens within each community improving their health status through improved living conditions, and thereby reducing acute episodes, and urgent/ emergent visits to the local hospital’s emergency room. “While hospital-based population health strategies are continuing to be implemented, health care executives are noticing more and more out-of-industry players entering the field with investments in infrastructure, technology, scientific research, and payment and delivery models. As a result, patients are beginning to find more affordable and more accessible options that are transforming the nation’s healthcare system. These new players are being referred to as disruptive innovators, as they are a threat to established healthcare providers and will remain so, if their strategies do not change. “The reasons technology giants such as Amazon, Google, and Apple and mega retailers CVS, Walgreens, Walmart, and Best Buy are entering the healthcare space as disruptive innovators are numerous and compelling. They include: the size and scope of the medical field; the opportunity to engage an already loyal customer base; and the need to fill the floor space that their respective stores already have. With these reasons in mind, these tech giants are well positioned to help customers find medical care more efficiently, and becoming “digital front doors” that leverage artificial intelligence (AI) and voice assisted technology to facilitate health care interactions, including: connecting with care via online scheduling; checking on home delivery of prescriptions; and managing health improvement goals. “The retailers’ interest in filling their floor space stems from the decline in product sales due to online shopping. The increasing empty space is now being converted to in-store primary care retail operations which will bring profitable services in-house, create foot traffic, and feed the pharmacy operation to compensate for the lost retail business moving to online services. Meanwhile, these storefront type services will be helping customers manage chronic conditions such as diabetes, hypertension, and asthma. Some of these new health hubs will have expanded health clinics with a lab for blood testing and health screenings. “With all these new and disruptive innovations being established, healthcare providers need to be aware, and more so, need to look outside their hospitals and clinics for new ways to connect with patients more efficiently and effectively. “Commercially insured patients increasingly prefer digital care because of factors related to value, convenience and customer service. Therefore, health care providers who don’t have strong primary care presence, need to find ways to do so or partner with retailers that can fill the gap. This way patients with serious illnesses, conditions or diseases, hospitals should strive to be the destination of choice. Also, with everyone’s interest in digital services, hospitals should continue to adopt promising new technologies, especially those focused on population health. These technologies include: Disease management using predictive analytics and wearables; home-base health care technology and virtual visits with clinicians; supply chain initiatives to improve delivery of pharmaceuticals and medical equipment. Again, all these types of innovations reduce cost in the short and long run, while increasing patient satisfaction and quality of care.” Interesting that he (Kastanis) mentions innovations in terms of today’s technology giants, again proving that my partners and I at Miami Hand Center were ahead of the curve way back in the 90s, which paved the way for Justin Irizzary and I to disrupt the healthcare delivery system to achieve the Triple Aim with OrthoNOW ®. Despite clear evidence of the major cost of hospital care to our system, in an ironic twist, hospitals spend more and more money on marketing activities, something that was never seen decades ago. On two stretches of Miami highway, one can see a series of billboards for “competing” hospitals, often one hospital’s ad directly in front of their competitor. That would not be needed if they were primarily serving “sick” people as I mentioned at the outset. E.M.S. (Emergency Medical Services) knows precisely where the nearest, and most appropriate, hospital is located for the emergency they are tending to, and internists know exactly where their affiliated hospital is when admitting their unstable patients. Some of these billboards began battling each other in their “real-time” digital declaration of E.R. wait times. Eight minutes versus fourteen minutes and so on. It became ridiculous enough that our local daily paper, always looking to disparage healthcare and doctors, published an expose’ on the topic, revealing what we all knew, that it was a lot of smoke and mirrors. Another battle involved the promotion of their possession of the DaVinci surgical robot, a tactic designed to mislead patients about the role and necessity of this high-tech contraption in their ongoing effort to compete with other hospitals in a game of “Keeping up with the Joneses.” Most proficient general surgeons will tell you there are highly specific indications for the use of this million-dollar device, while the majority of orthopedic surgeons will tell you the addition of a robot simply adds cost and much more time to the performance of a total knee or hip replacement.

Chapter 14 – Where do we go from here? Healthcare 3.0 > Page 487 · Location 8297

Hospital Executive (Kastanis) -“Commercially insured patients increasingly prefer digital care because of factors related to value, convenience, and customer service. Therefore, healthcare providers who do not have strong primary care presence must find ways to do so or partner with retailers that can fill the gap. For patients with serious illnesses, conditions, or diseases, hospitals should strive to be the destination of choice. Also, with everyone’s interest in digital services, hospitals should continue to adopt promising new technologies, especially those focused on population health. These technologies include disease management using predictive analytics and wearables; home-base health care technology and virtual visits with clinicians; supply chain initiatives to improve delivery of pharmaceuticals and medical equipment. All these types of innovations reduce cost in the short and long run, while increasing patient satisfaction and quality of care. “On the aggregate scale, patients do not understand how a single-payer or Medicare-for-all insurance program will work, nor where the funding will come from. As we have seen national health systems already established in other countries struggling with access, quality, and financial issues, it would be difficult for our nation to try to implement something better.

Chapter 14 – Where do we go from here? Healthcare 3.0 > Page 487 · Location 8308

“Starting with financial challenges, most of us don’t realize that each state will have to include more funding for their share of a single payer system, providing care to every resident. In our current payer system, Medicaid services in each state are funded only partially by the Federal government. States with disproportionate numbers of Medicaid beneficiaries already have overburdened expense budgets, particularly the “blue” states that have expanded their Medicaid eligibility requirements, and subsequently have serious budget overruns. With a single-payer system in place, more pressures will develop in providing funding for all state residents. This is the reason so many governors and state legislators have not further pursued this endeavor, as they have in the past. It is not affordable without levying significant new taxes on their constituents. “As for access and quality of care, most national health systems suffer from lack of capital, resulting in antiquated facilities and no replacement of equipment and technology, while adopting priority waiting lists for patients to get the care they need. In the U.S. we are not accustomed to this type of health care delivery, and we could easily fall behind in quality of care if federal and state funding is curtailed, such as we have seen in Great Britain, Canada, and other rich European countries. Certainly, if a single-payer system is implemented in the U.S., a significant increase in payroll taxes will need to be imposed, and it probably still will not cover the cost of delivering the amount, scope, and quality of care that we are now very used to. “I think the most important message to the public is that we have an evolving health care system that is less than perfect, but still has many of the best medical centers in the world with many medical advances that are being discovered in record rates. These advances alone will provide different and improved modes of care, prolonging life and improving the quality of the lives we live. We must all be patient and understanding of the fact that our health care delivery system will need to continue its transformation while still grappling with: ongoing financial pressures and the rising costs of care; changing consumer expectations; new disruptive innovators; and empty hospital beds and underused facilities. “In the meantime, with all the new technologies available to us now and in the future, we must move beyond the current, reactive ‘sick care’ model to one that is more continuous and preventive. What will get us closer to that more effective model of care includes new technologies, such as: Artificial Intelligence (AI); Wearable devices and quantified health data; Genomic and precision medicine; and Telehealth and virtual care. If hospitals and other healthcare providers prioritize the implementation of these technologies, they have the potential to proactively optimize health and wellness, detect disease at earlier stages and improve the treatment of acute and chronic conditions. Mr. Kastanis, having run some of the more prestigious hospitals in the American Northeast, makes an excellent point about the American psyche. We will NOT tolerate the waits, inefficiencies and limited technology access that often comes with the classic single payor system. We discussed Canada earlier. Our current inefficiencies are due to the hurdles we have been discussing throughout the book: overblown bureaucracy, hyperregulation and needless complexities such as the cumbersome E.M.R. systems. It is not generally due to deficient funding or lack of political will to serve our needs. He does address the emerging consumerization of medicine and it will be up to the healthcare systems and clinicians to adopt these effectively. Unbridled competition can bring down costs, but we must unleash the classic American free-market system that Dr. Julio Gonzalez and so many others espouse.