Monday, August 17, 2009

Health Innovators Series: Herbert Pardes, CEO of New York Presbyterian Hospital System

Herbert Pardes shares his thoughts on the power of healing relationships and how the PRIZE model can be a catalyst for innovation within healthcare

In 1999, Dr. Herbert Pardes was elected President and Chief Executive Officer of NewYork-Presbyterian Hospital. As the former director of the National Institute of Mental Health and Assistant Surgeon General of the U.S. Public Health Service, he was well positioned to assume the top leadership role of one of the largest hospital based systems in the United States. He has also served as Vice President for Health Sciences and Dean of the Faculty of Medicine at Columbia University College of Physicians & Surgeons. Prior to this he was the Director of the Psychiatry Service at Presbyterian Hospital. For over three decades he has played a major role in the affairs of NewYork-Presbyterian Hospital and understands the challenges and opportunities within the current health care reform era. The X PRIZE team caught up with him earlier in the year to get his take on how to improve the health care system.

Can you give us your background?

My name is Doctor Herbert Pardes. I’m president and CEO of the New York Presbyterian Hospital in New York City. We are one of the largest hospital systems in the world and consist of a complex of institutions in the city as well as in Connecticut, New Jersey, and an affiliate in Texas. We deliver about 20 to 25 percent of the healthcare in the greater New York area which consists of clinical care, health education, and medical research.

What challenges do you face in providing care to your patients?

We can do so much more in healthcare today than we could just a short 20 to 30 years ago. Those of us who are in healthcare find our greatest pleasure in being able to help people and this has been very satisfying progress. As a result, many more people are living longer and the demand for complex healthcare is very substantial. As a result, the cost of healthcare has become very expensive. So our biggest challenge is how to provide the greatest amount of help to human beings while being sensitive to the cost issues for the nation and the population in general. This is a very difficult balancing act, and we attempt to find the way to extract maximum benefit for the dollars being spent.

How has the burden of administering the health care system changed during that same time?

I think one of the things that could help a lot would be a reduction in administrative requirements and the excessive oversight. I am not trying to minimize the value of oversight, but I believe it can be done in way to minimize the energy and the effort required to respond to oversight. As an example, in a recent study of nursing care, it was found that when you measure the amount of healthcare a nurse provides at the bedside, that the average nurse spends only 28 percent of their time at the bedside and 72 percent on other work. My feeling is that is imbalanced and should be corrected by taking off some of the unnecessary demands and freeing up the nursing staff to be more available to the patients.
In terms of reimbursements issues, what challenges do you face?

Well, reimbursement is an enormous problem for people in healthcare. There are a very large number of people in this country who are uninsured; there are a large number who are underinsured. Even people covered by Medicaid and Medicare represent an entire population whose reimbursement does not meet the cost of their care. So a hospital like ours loses money on Medicaid, loses money on Medicare, and in addition provides healthcare for people who are either underinsured or uninsured. While we do receive a modest subsidy from the government to compensate for our care, we lose money on everyone of these patients. We offset these losses by how we charge for our commercial care and in this sense we are a microcosm of the country. Our current payer mix is 30 percent Medicaid, 30 percent Medicare and some 30 percent or so commercial care. The remainder is people who pay for themselves or are uninsured. Reimbursement has been the toughest nut for all of us to crack and remains a very big, unresolved problem in healthcare.

What do you think about issues like pay for performance and incentives?

I’m in favor of pay for performance and I actually helped to draft the initial principles the joint commission used to create the current pay for performance efforts. I do not, however, favor reducing people’s revenue if they can’t meet the performance because what you’ve often got is an institution that may have limited resources, can’t do the job, and by taking more resources away from them they get into a vicious downward cycle. On the one hand, I think that having goals, setting targets, and having people strive toward better performance for quality, safety, and efficiency are very good. I am for incentives just as I am in favor of competition but we need to be careful that what looks like a good program does not become twisted as a means to artificially cut dollars for health care.

What are the greatest challenges we face in terms of the healthcare industry as a whole?

Well, first of all, I think that our country needs to once and for all move toward total coverage and total access so everybody can access the benefits of healthcare. That can sound like it’s gonna cost more money, and it probably will cost some more, but it’ll have more total savings associated with it. There are a lot of people who come to emergency rooms after their disease is well along, and as a result they’re suffering more and we are all paying more and our opportunity for success is also diminished.

I’d much rather see a system wherein a healthcare professional looks after your general health, pays attention in a preventive way to good health practices, diet, exercise, regular colonoscopies, etc, etc. This style of health care should results in a life of less major illnesses and less time suffering from major illnesses. I believe we could create a much healthier population but its foundation is in universal health care coverage.

We should not have the current disparities and inequities between different populations. We should focus on investments that have a clear health benefit, as well as a clear improvement in population health that can work more, contribute more, and produce more. This clearly helps the economic welfare of the country as well as the health interest of the country.
Why do you think a prize or competition is a good way to address these issues?

I think this country is built on competition, and I like competition. It stimulates people to do more, to try harder, and provides a built in rewards system to people who have done a good job. A prize creates some interesting competitive dynamics as well as the motivation for many people to strive for the prize. I think the catalyzing effect of the X PRIZE model can have a very stimulating effect on driving innovation. I commend the people behind the concept of the X PRIZE and am eager to see how it can be applied to health care.

What outcomes do you hope to see from this process?

I would like to see more innovation in healthcare. I would like to see particular attention to the interpersonal nature of healthcare, and a significant reduction in the preventable problems that are currently plaguing our system. Let me give you an example. One of the most common illnesses in the United States is diabetes. It’s known that if a person having diabetes handles themselves in such a way as to keep their blood sugar within normal bounds, the likelihood of the complications of diabetes is dramatically reduced. Now, in our hospital right now, if you and I went for a walk through, we would probably find something in the neighborhood of 1 in 4 people having diabetes, and the reason they’re in the hospital is not necessarily for the diabetes itself but for vascular problems, eye problems, heart problems, kidney problems, surgical problems, or vascular problem related to the underlying disease. If we could get people to handle themselves as they should, despite the fact that they have diabetes, the likelihood is the number of patients with those various complications would be dramatically reduced, and the nation would save considerable money.

My feeling is that if we can introduce both the most personal, responsive and sensitive healthcare system, it can have a dramatic impact on how people handle their health care problems. Think about a patient walking into a forbidding institution, with professionals they don’t know, who are not friendly or supportive, and it makes the person feel terrible; if you didn’t feel terrible before you will as you travel through this type of health care journey.

In contrast, if you have people who care about you, show it, patient-sensitive, friendly, understanding, try to help you, you begin to feel like there is this coordinated, caring team on your side. There is just a dramatic difference on how the patient feels and how they perceive their own health is a key indicator on how they actually do. So for me, I see this personalization of the health care system as having two key effects: 1) getting patients more engaged so that they become better stewards of their health from the beginning, and 2) a system evolves that is personalized, coordinated, and delivers the type of care in the way the patient can best receive it.

Any final thoughts regarding health care?

I think that people who become nurses, medical technicians, doctors, pharmacists are in this area of work for one primary reason: it feels good to help people get better. If you can then aggregate that effort into a systemic concept of improved health delivery that is more patient focused, achieves better outcomes, and saves the nation money in the process you are going to have a lot of people feeling terrific on both sides of the table. I think this is not only an exceptionally useful deployment of the prize model but that the X PRIZE should take enormous credit for stimulating this movement.
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