Lung Cancer Screening’s Five Forces

I was struck by the tweets after the Center for Medicare Services’s (CMS) recent payment ruling on lung cancer screening. Some called the decision unfair, but here is my favorite:Untitled.png

This tweet, combined with the official response from the American College of Radiology, more clearly describes CMS’s decision.  Let’s review this decision using an economic industrial model known as Porter’s Five Forces.

Adapting this model and illustrated by the title figure, we can see that CMS has a monopoly over the Medicare population. The threat of health insurance substitutes in the over 65 population is almost nil. Customers (ie patients) effectively have no control over CMS’s decisions through the federal rule making process; their only recourse is a legislative fix that is lengthy and cumbersome. Finally, there will be no new entrants into the risky and expensive senior health insurance market, which is why Medicare was created in the first place.

Civilian hospitals that choose to offer lung cancer screening must compete using the inner circle of Industry Rivalry. Applicable tactics from Wikipedia include:

  • Sustainable competitive advantage through innovation
  • Level of advertising expense
  • Powerful competitive strategy
  • Firm concentration ratio

Innovation is perhaps the most important force that will allow hospitals to offer lung cancer screening to patients. Computer aided diagnosis, standardized reporting using patient centered Lung-RADS, and even some level of physician extender or automated draft reports and clinical registry entry will help practices keep costs down to a level that allows a small profit margin. In an urban market where there is a low concentration ratio, patients are more likely to find an innovative practice to provide this important service.  Rural patients may have to go without being screened.

Dr. McGinty and the ACR are correct; CMS’s decision will certainly limit access to this life and cost saving service. However from the perspective of CMS and the Five Forces, the decision is not unfair. The question of logic depends on your perspective and mission. As CMS’s primary mission is “an effective steward of public funds” , one might argue that their decision is logical as they are forcing innovation within the marketplace.

However, CMS’s position ignores the downstream costs of those who are not screened and must be treated for advanced stage lung cancer later. It also ignores the increased pain, suffering, morbidity, and mortality of advanced stage lung cancer.  Thus, a more holistic mission might be to allow access to lung cancer screening for ALL Medicare patients by restoring a higher level of reimbursement and reducing regulatory hurdles for this service.  From a temporal and patient centered perspective, CMS’s decision is completely illogical.

Finally, local practices would be wise to ignore the noisy commentary from our federal bureaucrats and push innovation locally, so that they remain sustainable and all patients will have access to quality care.

The Importance of Human Resources in Customer Service

A contracted mobile CT scanner brought in to support a VA hospital CT construction project sits idle in a parking lot due to a lack of human resources. With a rumored cost to taxpayers of approximately $45,000/month there are no technologists available at the institution to run the scanner and provide veteran access to this important imaging service. Furthermore, the absent human resources has prevented timely access to CT services during second/third shifts, and weekends, affecting the Emergency Department and inpatient veterans who need scans. Many of these after-hours studies are being outsourced to a local private hospital, requiring the added cost of ambulance transportation.

Meanwhile, daytime scans are being performed on an in-house low quality 16 slice hybrid SPECT/CT machine, potentially displacing veterans who need nuclear medicine exams.

As the idle mobile CT unit continues to collect dust in the parking lot one employee quipped, “I hope that thing is gone before the snow flies or it will burn.”

Let’s hope it is another mild winter. More attention needs to be paid to the relationship between VA Human Resources and veteran access.  As Human Resources is the link between internal customers (employees) and external customers (veterans and their families), their mission is critical.

A Duty to Scan

Imagine a Veteran’s Hospital where taxpayers have provided tens of millions of dollars of CT and MRI equipment. Imagine that hospital has a 8-12 week backlog of veterans who would benefit from these exams and salaried radiologists ready to interpret the images and pass that knowledge back to the organization’s customers.

Continue to imagine there is a bottleneck; the technologists needed to move veterans through the scanners are not available. Does that Veteran’s Hospital have a duty to hire as many technologists as possible and maximize the capacity of those scanners? Does the hospital have a duty to scan, and is it negligent not to do so? If a principle mission of the Veteran’s Hospital is responsible stewardship of taxpayer resources, the answer is yes. Let me explain.

Currently our Veterans Administration has the ability to outsource clinical duties to private hospitals when demand cannot be met internally. However, when they do so in Radiology, taxpayers must reimburse a small piece of the investment that the private hospital made in their own scanner. This is known as the technical component of the fee and that private hospital will send a bill to the taxpayer that includes it. If the scanner at the VA were being run at peak capacity this technical component paid to the private hospital would be justifiable. However, if there is idle capacity in the hardware at the Veteran’s Hospital, taxpayers are effectively buying something that they have already purchased.

Stewardship of taxpayer resources would suggest there is a duty to scan within the VA system and that outsourcing of imaging is only appropriate when that VA equipment is being run on weekends and second shifts. It is critical to have an administration and Human Resources department that understands this duty.

Veterans Affairs Mission Statement: Set and Fixed in Metal

I took a course in marketing recently. The first lesson taught was the importance of knowing who you are as an organization. This knowledge, distilled into a mission statement, can serve as the central piece of what should be ongoing internal and external dialogues. If you do not know who you are, you are going to have difficulty with your employees and customers. But this knowledge alone is not enough. When you are not transparent about your needs, values, and intentions it is difficult to partner with anyone, be they the person at the counter, in the next office, or on the other side of your bed.

Most hospitals market poorly; this is often a product of not clearly defining, adhering to, or effectively translating their missions. Perhaps it is not surprising that our largest heath care system, the Veterans Administration, often struggles with marketing. Here is the VA mission statement as imbedded in a recent job posting.

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So, the VA’s mission goes back to the days of President Lincoln. While he may have been our greatest president and one of our greatest leaders, I am sure he knew nothing about modern medicine. Furthermore, the statement relegates women to the role of grieving spouse in a military where only men go into battle.

Thankfully, orphans of veterans are significantly less prevalent today than in Lincoln’s time. The vast majority of our veterans return alive; but the wounded are missing limbs and carry psychological scars that are not easy to diagnose or treat. These injuries greatly impact their families and children in a way Lincoln could not have imagined.

The job posting which carries this mission statement tries to make up for its inherent sexism with the tag line about caring for “the men and women who are America’s Veterans” but succeeds only in making it more awkward and wordy. Our military’s and country’s current values of equal opportunity and modern health care are not supported by this mission statement. How many outstanding healthcare workers and potential employees might be discouraged by its implied lack of sensitivity, or worse, awareness? It is time for our Veterans Administration to update their mission statement. In the process of doing so, they may clarify, inform, and unify their sense of purpose and identity. Distilling this awareness into a clear and concise mission statement may in turn elevate the organization and enhance communication between their employees, within the American culture, and with their veteran customers.