Category Archives: Episode of Care

The Geisinger Experience: Realizing The Health Value Vision

Realization (ə-lĭ-zā’shən)

  1. The act of realizing or the condition of being realized.
  2. The result of realizing.

Today, I am meeting with the X PRIZE Foundation at our 2nd Health Advisor Summit meeting in Washington, DC. We have gathered a small subset of health care thought leaders, innovators, providers, payors, patients, and employer groups to discuss the design of an incentivized competition for our health care system. It has been and continues to be fascinating work.

I have been privileged to talk to some of the luminaries within the health care field, individuals that I have read about for years (Weinstein, Nussbaum, Schwartz, Pardes, etc), but now have the privilege to interact with on a near daily basis.  One of those, Dr. Glenn Steele from Geisinger Health, has been particularly enjoyable to work with. I have been impressed with the incredible work they have done at Geisinger, not just their outcomes, but their thought process and the leadership behind making the required changes to achieve the results they have.   Glenn has actively participated in the X PRIZE design, and I have been impressed with his insight, his approach to problem solving, and what his team has accomplished to date.

They are the rubber hitting the road for the value driven health movement. Dr. Steele recently presented to Congress, and the entire body of his comments are included below because they are that good . . . and provide some insight into some of the transformative new deliver and new payment models that the X PRIZE hopes to catalyze. It is a bit long, but well worth your time (highlights are mine). For those who need to go right to the punchline, here it is:

The money quote: “We have improved outcomes and have reduced costs. This is because we have systematically researched how best to deliver care, hardwired the process steps into our electronic health record to prompt us on what best practices are, decreased unjustified variation, and taken financial risk to decrease related complications.”

Healthcare Reform – Changing Reimbursement That Reflects Value

April 1, 2009

Chairman Rangel, Ranking Member Camp, and members of the Committee,

Thank you for the invitation to testify at your hearing on healthcare reform and national system changes that can support quality and value in healthcare delivery. At Geisinger Health System, we serve a population that is poorer, older and sicker than the national averages. Most of our patients have multiple chronic diseases, such as diabetes, high blood pressure and lung disease. Our patients have difficulty navigating through a complex healthcare system. They need help and we have made a concerted effort to put into place electronic and other innovative methods that will provide them with the assistance to maximize their ability to get care.

At Geisinger, we hold ourselves to high standards of assuring quality outcomes in serving these patients. For example, if a patient is readmitted to a hospital after a procedure or an in-patient stay, we believe we have failed that patient. Consequently, we have committed significant resources and have worked aggressively to bring value to healthcare and eliminate failures by redesigning how we provide care. The innovations we have instituted at Geisinger that bundle payments for acute care procedures, enhance support for primary care physicians and their care teams, better manage chronic disease and the transitions of care for patients from caregiver to caregiver, have produced significant cost savings and improved quality. Admissions for our patients with multiple chronic diseases have been reduced by as much as 50% in community sites. I believe that what we have accomplished can be adopted nationally and will achieve similar cost savings while improving quality. This would result in significant positive consequences for large payors, particularly Medicare.


I am Glenn Steele, the President of the Geisinger Health System, an integrated healthcare organization located in central and northeast Pennsylvania. Before coming to Geisinger, I spent 20 years as a practicing cancer surgeon at several Harvard hospitals and served as a Chairman of the Department of Surgery at the New England Deaconess Hospital. I then became Vice President for Medical Affairs and Dean of the Division of Biological Sciences and the Pritzker School of Medicine at the University of Chicago. Consequently, I have firsthand experience with patients, their access (or lack of) to care, issues that affect physicians and other caregivers in providing adequate and timely care, and the difficulties in juggling medical education and research, while facing ongoing changes in healthcare reimbursement.

In 2001, I came to central Pennsylvania because Geisinger offered the potential as an integrated healthcare system of developing cutting-edge approaches to increasing efficiency, value, and quality in healthcare. In short, we could attempt to transform healthcare using both our healthcare insurance product, and our clinical delivery system working together to benefit our patients. We serve a population of 2.6 million located in central and northeastern Pennsylvania. And we have an electronic health record (EHR) that was implemented 14 years ago with now more than 3 million individual patient records. Geisinger has been named as “Most Wired” by Healthcare’s Most Wired magazine six times.

We have our own health care insurance product – Geisinger Health Plan – that has nearly 235,000 members, 35,000 Medicare beneficiaries, 18,000 empanelled physicians, 90 hospitals (not including our Geisinger hospitals) and spans 43 of Pennsylvania’s 67 counties. We also lead our area’s regional electronic health information sharing platform1, called the Keystone Health Information Exchange, with (currently) ten hospitals and approximately 700 private practices sharing valuable medical information. This secure, patient-approved sharing of information means that our doctors, and more than 1,500 non-Geisinger caregivers can access patient information 24/7 from anywhere – a remote two-doctor primary care office, a multispecialty clinic, an operating room, or at 3:00 am from home.

Our patients access their own electronic health record. They can see their lab results, radiology results, request prescription refills, and email their doctors, nurses, and staff with questions anytime. And, they schedule their own appointments on-line. Geisinger has a large number of elderly patients (many greater than 80 or 90 and more and more now exceeding 100 years of age). Most have multiple chronic diseases and have family living outside of our area who follow their parents’ care through the electronic record (with appropriate patient approval). Geisinger employs about 800 physicians who see patients in more than 50 clinical practice sites; 38 of which are primary care sites in local communities. As clinically appropriate, physicians in these clinical sites admit their patients to nearly 20 local community hospitals – ensuring that patients receive most of their care near where they live. Only if necessary, are Geisinger patients treated at one of our three specialty hospitals.

Geisinger’s innovation2  is intended to attack fundamental flaws in our country’s payment for and delivery of healthcare. The U.S. suffers from a variety of reimbursement and care delivery issues that do not produce good clinical outcome. There is wide and unjustified variation in care. Fragmentation of care is rampant; our “hand-offs’ (that is, transferring important medical and family information as patients are moved from one environment to another) are disjointed and most often result in patient care that is not coordinated and is confusing to the patient. We have a perverse method of payment – one that rewards units of work regardless of patient outcome.

At Geisinger, we invest in quality and pay accordingly. Doctors who have better clinical outcomes are rewarded (financially and by recognition) and we constantly measure our outcomes against our peers, both within Geisinger and nationally. Physician, staff and site incentives are built into our system. And we reward quality and value, not just numbers of patients seen or numbers of procedures performed.


A great paradox in U.S. healthcare is that we get paid for making more mistakes. For example (with few exceptions), if a patient develops a post-operative complication that might have been avoided by proper care, we often receive more reimbursement for that case than for a comparable case without a complication. This does not happen in other industries. Why are healthcare services an exception? Consequently we believe our care design should be based on best evidence. In 2006, we started tackling the perverse payment incentives noted above by redesigning how we provide elective cardiac surgical care – what is known as coronary artery bypass grafts (or CABG)3. CABG is an episodic acute event – an event with a determined time frame from diagnosis through rehabilitation and recovery (unlike chronic disease, which stays with you for life). Our cardiology service line reviewed the American Heart Association and the American College of Cardiology guidelines for cardiac surgery and translated these into 40 verifiable best practice steps that we could implement with each patient undergoing this surgery. We hardwired these into our electronic health record so that we would be prompted to meet each identified step – or document the specific reason for any exception. We then established a package price that included costs of the first physician visit when surgery was deemed necessary, all hospital costs for the surgery, and related care for 90-days after surgery, including cardiac rehabilitation.

We named this program “ProvenCare”, since it is based on evidence or consensus of best practices by our heart experts. Pre-operative, post-operative and rehabilitation are part of the single charge. And we take the financial responsibility for any associated complications and their treatment. While our cardiac surgery outcome was already well above the national average, (and near the top of Pennsylvania’s PHC4 data set) upon initiation of this program only 59% of patients received all 40 best practice steps. Three months into the study, 86% were receiving best care. We raised that to 100% and, with few exceptions, have kept it at that high rate. As a result of implementing this “warranty” program, our patient care was better – using comparative, standardized data from the Society of Thoracic Surgery. We had a reduction in all complications of 21%, sternal infections were down 25%, and re-admissions fell by 44%. Costs for treatment fell, too. Our average length of hospital stay decreased by half a day4.

For other high volume, hospital-based treatments, we have now considered every step in the patient’s care flow. For instance, in orthopedic surgery, why should one doctor use one set of surgical instruments and prosthetic devices and another insist on a different instrument set-up for the same procedure? That type of variation often has no medical justification, results in unnecessary costs that are passed off to third party payors (such as Medicare) and, we believe, compromises patient outcome. We have expanded our experience with heart surgery to “warranty” programs that include:

  • hip replacement
  • cataract surgery
  • obesity surgery
  • prenatal care for babies and mothers (supported by the March of Dimes) – from an infant’s conception to birth
  • centrally- managed, evidence-based use of high cost biologicals, such as EPO (erythropoietin)
  • heart catheterization

We have improved outcomes and have reduced costs. This is because we have systematically researched how best to deliver care, hardwired the process steps into our electronic health record to prompt us on what best practices are, decreased unjustified variation, and taken financial risk to decrease related complications.

ProvenCare – Chronic Disease

In reforming how we deliver care at Geisinger, it isn’t enough to simply address acute episodic care. The major challenge of healthcare in the U.S. is now chronic disease treatment and “secondary prevention”. We identified the most common chronic diseases – diabetes, coronary artery disease, congestive heart failure, kidney disease – and have applied evidence or consensus-based best practice thought to limit disease progression. Called “bundled” care, we have designed each of these steps into our care pathways and strive to achieve as close to 100% adoption as medically appropriate and feasible. In the case of diabetes, we began to track how we performed in meeting 100% of the expected “bundle” of best care for diabetic patients three years ago. Our primary caregivers have chosen to receive compensation based on how many of their 25,000 diabetic patients reach optimal levels in the practice “bundle”, not solely on how many patients are seen each day or how many tests are ordered.

ProvenHealth Navigator (Advanced Medical Home) 3, 4

Geisinger’s patient-centered medical home initiative (called ProvenHealth Navigator) combines traditional medical home models with patient engagement and is designed to deliver value by improving patient care coordination throughout the system. Our Advanced Medical Home currently covers 30,000 Medicare recipients and 3,000 commercial patients, with plans to expand this base. We understand that navigating through the complexities of any healthcare system is not easy, so we have invested in programs and staff to help support each patient’s journey, placing dedicated nurses in each targeted outpatient clinic. Over 200 Geisinger primary care physicians diagnose and treat their patients locally in 38 community practice sites. Our “embedded” nurses are paid for by the Health Plan, becoming critical members of the community practice team and, with the physicians, are expected to know the patients and their families, to follow all of their care, help them get access to specialists and social services as necessary, follow them when they are admitted to a hospital, contact or see them when they are sent home to confirm that they are taking the appropriate medication dosages, and be available for advice 24 hours a day.

Importantly, we don’t just ask these community-based clinicians to “try harder” or “work faster”; we use resources from our health plan to help redesign their work. And, we pay incentives for getting the job done. In our best practices, our sickest chronic disease patients’ admissions were decreased by 25%, days in the hospital decreased by 23%, and readmissions following discharge decreased by 53%. The payback for the health plan occurred within the first year. The benefit to patients and their families avoiding multiple hospital admissions was priceless! For these patients with multiple chronic diseases, transport to and from the hospital or clinic, choosing which doctor should be seen, coordinating their numerous prescriptions, getting their pills, making sure they take their pills at the right time – all of this is what our ProvenHealth Navigator work redesign accomplishes. Increased quality for the patient and their families actually lowers healthcare costs.


Building on what we have done at Geisinger, I have these recommendations for your consideration:

  • Establish a simple, understandable set of national goals, so we can hold ourselves accountable together for improving the quality and value of health and healthcare for our citizens.
  • Change reimbursement to reward positive outcomes, not units of work.
  • Pay for episodes of care, forcing all providers to work together across physician and hospital boundaries to achieve optimal outcomes.
  • Pay more for delivering high value primary care.
  • Fund innovation to create real or virtual integrated systems of care.
  • Consider capitation payments linked to quality outcome measures for prevention and chronic care services.
  • Help fund enabling information technology but insist on non-proprietary interoperability.
  • Do not pay for mistakes and do not pay for care that is of no known benefit.
  • Help hospitals and communities establish transitions of care programs to reduce unnecessary admissions and readmissions.

Thank you again for the opportunity to testify today and I look forward to your questions.


  1. Walker J, Carayon P, From Tasks to Processes: The Case for Changing Health Information Technology to Improve Healthcare. Health Affairs, Vol. 28, No. 2, 467-477, 2009.
  2. Paulus R, Davis K, Steele G, Continuous Innovation in Health Care: Implications of the Geisinger Experience. Health Affairs, Sept/Oct 2008. Vol. 27, No.3
  3. Casale A, Paulus R, Steele G, et al ProvenCareSM. A Provider-Driven Pay-for-Performance Program for Acute Episodic Cardiac Surgical Care, Annals of Surgery. Vol. 246, Number 4, Oct. 2007
  4. Abelson R. In Bid for Better Care, Surgery With a Warranty. The New York Times. May 17, 2007.


Filed under Episode of Care, Health 2.0, Healthcare, Innovation, Leadership, Medical Home, Quality, Uncategorized, Value, X PRIZE

Episodes of Care: You have got to be kidding

Episode (ĕpĭ-sōd) n.

1. A portion of a narrative that relates an event or a series of connected events and forms a coherent story in itself.
2. One of a series of related events in the course of a continuous account; An incident that is part of a progression or a larger sequence.

As I have referenced many times on this blog (here, here, and here), I am a big fan of the concept of Episodes of Care (EOC). I believe EOC’s are the best comparative and most functional unit by which health care value (outcomes/price) can be appropriately measured. An EOC can be defined as the set of services required to manage a specific medical condition over a defined period of time.

In the case of a right hip procedure, an EOC would include the pre-surgical evaluation, the actual surgery, the anesthesiologist, the operating room, actual hip device, post op recovery, medication and supplies, rehabilitation, and followup visits to orthopedic surgeon and primary care all bundled together for a single price. In the case of more chronic care, it would include all the care required to manage a typical diabetics care for a year. This would include the various visits, consults with nutritionists, podiatrists, ophthalmologists, primary care and related specialists.

The concepts of EOC have been around for a while, and the idea of reimbursing for care in this way is picking up momentum. This is an important ideologic transition, moving from providing fee for service pay for procedure mentality to a more comprehensive, wholistic approach to deliverying care. It also speaks to a fundamental problem of creating a retail health market and organizing health care into a service-based “product” that consumers can compare, shop, and purchase.

We are beginning to see the first “demonstration” projects that focus on the retail productizations (based on EOC) in and payment mechanisms like Prometheus. These early innovations in creating health care products in a retail environment remain too complex for mass adoption at this stage, but are still very encouraging.

The barriers to “productizing” health care services into EOC’s remain formidable. Case in point: my 5 year old nephew needs to have a tonsillectomy. This is a simple, straightforward, and relatively common procedure performed millions of times each year. In attempting to provide his parents with some guidance of cost, quality, and outcomes questions, we rapidly determined that it is next to impossible to find this information anywhere, let alone in a consumable form that could be used to make a rational health care decision (ie, which surgeon, what facility, what are expected costs, what is expected outcome?).

So, we determined to turn the experience into case study. I am going to help create a EOC for a <17 Tonsillectomy. Here is what I did with comments italicized:

  1. Diagnosis. The recurrent ear infections, repeat strep throat, persistent snoring, and behavioral problems led to a self diagnosis by a medically savvy father. Given the certainty of diagnosis, the primary care provider was bypassed (allowed by insurance plan) to go directly to the ENT specialist. ENT confirmed the diagnosis, explained rational for bypassing confimatory sleep studies (supported by JAMA article brought in by father), and discussed surgical options. Surgery was schedule for 10 days out. This particular diagnosis seemed consistent with symptoms, with literature, and with physician advise and no second opinion was sought. Additional research on the internet confirmed above.
  2. Procedure. Next was to evaluate the procedure, including asking the physician appropriate questions about the procedure, the alternative techniques, and expectations of outcome. The surgeon did an excellent job explaining the procedure and the technique, and provided some good in office diagrams and descriptions. Provider explanation of procedure was adequate and confirmed by quick online review of tonsillectomy.
  3. Providers. The next process was to evaluate which providers are required to perform this procedure. This information was gleaned from the above conversation about the procedure. Learned that the surgeon, an anethesiologist, a pathologist, and the OR team is required for this outpatient, same-day procedure. Also learned that there are typically two additional followups with the ENT and an optional followup with the primary care provider as part of a reasonable post op course. Extracting this information was difficult, and required an extensive knowledge of the health care system. Providers and staff were somewhat unsettled by this line of questioning but were open to providing it when I explained that I was a cash paying patient trying to determine what the full cost of this EOC was going to be. Insurance carrier was completely not helpful in assembling the EOC, but offered to review line item detail after the fact. This obviously misses the whole point of assembling an EOC for comparative pre-event planning.
  4. Facility. Same day surgical centers are typically more efficient business operations than hospitals (hence the dramatically lower pricing). I was able to obtain the acility related charges directly from the surgery center.
  5. Other components. This includes medication, supplies, and other miscellaneous items that should be included in the EOC. This was also difficult to obtain, despite every component provider providing this service dozens of times each week, no one had a collective view of what is involved.
  6. Pricing. Pricing information was exceptionally difficult to obtain. After 28 minutes on hold with the carrier, I was informed that they can only tell me the physician pricing – and to get that I would need a CPT code, a physician ID number, and a zip code where the procedure was being performed. I then had to chase down each individual provider (anesthesia, pathology, and surgery center) to get pricing information. Obtaining this information was exceptionally difficult – I had to repeatedly explain why I was trying to get the information, go back and get ICD-9 codes, review the insurance discount versus cash price, and be transferred back and forth between multiple administrative and billing personnel at each provider. This process will need to be repeated two additional times with two sets of different providers / facilities to have a basis of comparison.
  7. Performance. Because EOC’s are a measure of health care “value” we cannot just stop at price. We need to understand the performance characteristics of the EOC along the dimensions of proficiency (how many times has surgeon done this procedure?), ratings (what have been the patient satisfaction scores for this physician?), and outcomes (what are the quality or other relevant metrics to assess outcome of the procedure?). This was by far the most difficult component to compile. Proficiency information is somewhat available through Healthgrades, ratings information remains scant, and outcomes are essentially non-existent. These are systemic problems of measuring health care value that preclude more meaningful analysis and assessment of EOC in the short term. This is a perfect, standards-based metric development activity for one of the large government sponsored bodies to undertake (NQF, AHRQ, IOM, etc).
  8. Comparative Analysis. Finally, after approximately 12 hours on the phone (and the web while on hold) gathering relevant information for a simple tonsillectomy procedure, we were able to assemble a very crude EOC. We will need to repeat the process for two additional sets of providers/facilities for comparison. It was interesting to note the wide variability in pricing, the lack of performance information, and the difficulty in assembling this information which is so readily available for nearly every other consumer industry.

This case study was helpful to solidify my belief in the EOC as the appropriate unit to measure health care value. It was also instructive to more fully understand the challenges of trying to assemble an EOC, and the opportunity that exists for infomediary organizations to provide this information to consumers. Unlocking the silo’d information from the various providers, as part of a comprehensive EOC framework, could unlock significant value for patients, providers, and payors.

It just wont be that easy. No kidding.


Filed under Episode of Care, Innovation, Rational Choice, Transparency, Value