In 2001, the Institute of Medicine (IOM) popularized the phrase “priority conditions” in its report “Crossing the Quality Chasm.” Priority conditions in this context refers to the chronic clinical states experienced by the greatest number of patients on a national basis. The fifteen conditions listed in the report account for more than 70 percent of healthcare effort and costs in the United States. It only makes sense to focus on treating, preventing and curing these clinical conditions. In addition to reporting on these priority conditions, this report also recommends that clinical healthcare organizations use these priorities to define their strategic or business intelligence efforts, and prescribed ways to “organize around their priority conditions.” In effect, this list of conditions provides a way to organize and tackle strategic decisions in order to get the most out of every dollar spent by the organization.
Combined with business intelligence, a priority conditions analytical application can be used in a number of ways to solve a variety of strategic, organizational and operational issues. These include improving revenues, reducing costs and waste, making more effective investment decisions, improving staffing decisions, as well as improving overall responsiveness and safety for your patients.
In other industries, this concept of priority conditions across patients is referred to as market segmentation across customer groups. In these other industries, significant time, effort and investment is put into understanding these market segments and responding to the wants and needs of these segments. For healthcare organizations, a focus on priority conditions leads to fine tuning various efforts on both the clinical as well as the business side of the organization.
To begin with, there are four key levels of priority conditions relevant to healthcare organizations. These are described first below, followed by descriptions of how these priorities can be used to better align the organization’s strategic decisions and the benefits that are possible with these alignment efforts.
Four Levels of Priority Conditions
The four levels of priority clinical conditions relevant to healthcare organizations are national, community, system and local.
National Clinical Priorities. On a national level, the top five clinical priorities reported by the IOM are cancer, diabetes, emphysema, high cholesterol and HIV/AIDS. Other significant conditions include coronary heart disease, asthma and depression. This list is pretty well known in the healthcare field. It is even used in decisions made by Medicare on payments. What is relevant to your organization regarding this national list is that many quality accreditation programs and pay-for-performance programs are based on this national list. To qualify for these types of recognition or reward programs, your organization must address these priority conditions within your patient populations. Another reason for gaining knowledge of the national priorities among your patient populations is that the priorities for research studies used to produce evidence in evidence-based medicine is aligned with these national priority conditions. The higher the priority, the more evidence available. The more evidence, the greater the possibility for efficient, effective and safer care and prevention of these conditions.
Community Clinical Priorities. While national priorities are important to understand for the reasons described above, another level that is important for your organization is the clinical priorities in your community. For example, the community I live in has a relatively balanced demographic profile in terms of age and race. In fact, the average age in my community is probably a bit younger than the state average. Another community just 20 miles to the south has a relatively unbalanced demographic profile. That community has a population that is a little older than my community. For two healthcare organizations operating in these two communities, the community clinical priorities could be markedly different. Age-related clinical conditions would be more prevalent for the older community, and would account for a larger share of the revenues, costs and clinical efforts in that community. Consequently, investment decisions such as facilities, equipment, training programs and so forth would be different for the two healthcare organizations.
Imagine the vast difference between the city I live in and a retirement community in the Sun Belt. So it is critical to understand the differences in community clinical conditions and the strategic decisions made to support operating in that locality.
System Clinical Priorities. Each clinical healthcare organization or system has a unique profile depending on the mission, philosophies and direction of the organization. In addition, the organization has a unique set of distinctive competencies and external partnerships that make up its history and its current structure. These factors will influence the makeup of the patient populations, and consequently the priority conditions of those populations. For instance, in my community, there are three major integrated healthcare organizations. One is known for delivering babies, and has a high concentration of young families. Another is known primarily as a young working family and professional healthcare organization. The third is known as a provider of care to elderly populations. These three, of course, overlap in the care they provide to the total community, but with their individual concentrations of patients comes individual sets of priority conditions. Understanding their system-level priority conditions allows them to make smarter strategic and operational decisions.
Local Clinical Priorities. Within a healthcare system, there is often a variety of patient populations and associated clinical priorities across different locations. For instance, one of the three systems described above operates clinics and hospitals in both urban and rural settings. If this was a larger city, perhaps this system would have facilities in inner city, suburban as well as rural settings. Different settings mean different priority conditions. Different priority conditions mean different strategic and operational decisions.
Using Priority Conditions Information to Fine Tune Strategic Decisions Understanding the relevant priority conditions for your organization can lead to improvement in a number of strategic, organizational and operational decisions. For purposes of this article, I have focused on five strategic areas that can be fine-tuned with analytical information on your priority conditions.
Fine Tuning Revenue Forecasts. Patients bring revenue. But not all patients bring the same level of revenue. You can use the information on your priority conditions to get a finer breakdown of the history and trends in patient revenue across various populations and make more accurate forecasts on future revenue.
Fine Tuning Investment Decisions. Using trends and historical patterns across patient groups and their priority conditions, your organization can make more informed investment decisions, such as types of facilities to build, types of equipment to purchase, types of training for providers, etc.
Fine Tuning Cost and Waste Reduction Efforts. Right now the focus of the nation seems to be on reducing wasted effort and cost in the healthcare field, especially in the clinical area. The greatest source of waste and cost for any organization is effort put into business segments, which are not producing financial, clinical or “reputation” value to the organization. Using priority conditions analysis, you can see trends in the populations you serve, giving you advance notice of where the cost and waste reduction priorities are.
Fine Tuning Staffing Decisions. Priority conditions drive medical and clinical staffing and specialty requirements. Trends in priority conditions foretell the types of staff that will be needed, what particular skills and knowledge they must have and, in general, how many of each type of staff will be needed.
Fine Tuning Recognition and Reward Program Initiatives. Understanding the priority conditions of the various patient populations you serve is essential to effectively apply and gain benefit from quality accreditation programs, as well as be rewarded in pay-for-performance programs, which are quickly becoming the norm in the industry. It wouldn’t make sense, for instance, to pursue recognition and reward programs for conditions prevalent among elderly populations, if it turns out the majority of your patients are younger. The priority conditions would be different for the two age groups and your efforts and the evidence that supports them would be lacking.
Key Benefits of Using Priority Conditions Analytical Applications
The benefits of using analytical information on your patient populations and their priority conditions are fairly straightforward from the list of potential uses for this kind of information. Benefits include:
•Potentially increased revenue as you better serve the patients with the most value to the organization.
•Better control of costs, and consequently improved profitability.
•More focused support of operational priorities, with less waste. In essence, the right mix of staff, the right types of equipment, the right facilities, etc.
•Greater support for marketing efforts that both make sense for your organization, and have evidence to back up these marketing claims to make them more effective.
Using Information You Already Own to Improve Strategic Decisions
How much do you know about your patient populations and their priority conditions? Perhaps a lot, perhaps not as much as you would like. And if you do know a lot, are you applying this information to drive your organization’s strategy in the directions that will bring increased benefits for both your organization and the various stakeholder groups you serve? Again, perhaps. Using information you already own, you can improve your strategic, tactical and operational decisions. What it takes is a structured approach to gathering and accessing your data. Business intelligence applications are the best way to accomplish this.
Thanks for reading. I look forward to your comments.