While the national economy appears to be getting stronger, health care has entered a national recession, Jeff Balser, M.D., Ph.D., vice chancellor for Health Affairs and dean of the Vanderbilt University School of Medicine, told a packed audience of approximately 1,100 Vanderbilt faculty, staff and students in Langford Auditorium on Wednesday afternoon while making his annual State of the Medical Center address.
In response, VUMC is on its way toward an operational expense reduction goal of 8 percent — $250 million — to be achieved by the end of fiscal 2015.
“We’re sticking to our strategy to provide extraordinary clinical care, to be a leader in medical education, and to make discoveries of fundamental importance to humanity,” said Balser. “We’re going to remain and grow as a national leader in all three areas.”
Balser acknowledged that in order to achieve the necessary expense reduction goal the Medical Center has to reduce staffing levels across all areas of the organization as new workflow, systems and processes are being designed and implemented.
“The people who have left are our friends. We find this painful because we are a caring organization. That has not changed, in spite of the economic pressure we and all health care centers in America are experiencing to deliver our services more cost-effectively. Our focus on people, those we care for, and those in our own organization, will never change.”
Outlining the challenges facing not only VUMC but nearly all U.S. academic Medical Centers, Balser identified four factors:
• Federal sequestration, which went into effect on March 1 as Congress allowed blunt across-the-board reductions to occur to the federal budget. The result of the sequester for VUMC and the nation’s other academic medical centers is causing an ongoing 2 percent reduction to reimbursements for the care of patients insured by Medicare, and a 5 percent reduction to funding through the National Institutes of Health (NIH), which supports much of Vanderbilt’s biomedical research.
• Commercial insurers also are cutting reimbursement rates in response to demands from their major customers, large corporations and employers, thus creating significant pressure on cost structures.
• The decision of many states, including Tennessee, not to expand enrollment for Medicaid means the uninsured are coming to Vanderbilt in increasing numbers.
• Perhaps most significant of all factors is U.S. demographics. The baby boomer population is aging. Every year, 2 percent of Vanderbilt’s patients are migrating from commercial coverage to Medicare, which pays Vanderbilt less than the commercial sector does.
While there are immediate challenges facing VUMC, Balser said the Medical Center’s leadership saw changes to health care emerging as early as two years ago and began to proactively focus on non-labor operational expense reductions that resulted in fewer positions being eliminated.
Through non-labor operational expense reductions as much as $70 million in savings will be captured. The Medical Center’s hiring freeze, in effect since Jan. 1, has resulted in 700 open positions that have been eliminated. These actions significantly helped reduce the number of affected staff.
Other efforts to position for the future have included the formation of the Vanderbilt Health Affiliated Network (VHAN) and affiliations with 32 hospitals throughout Tennessee and Southeastern Virginia in just the past two years.
Through the VHAN, the Medical Center intends to keep growing throughout the Southeast. “We are one of the fastest-growing non-profit affiliated networks in the nation,” Balser said.
Affiliation means that Vanderbilt’s style of evidence-based care is being exported hundreds of miles away. It means that Vanderbilt and its affiliates can work together to manage the care of entire populations.
“The old fee-for-service model of reimbursement is going away,” he said. “Managing care over time, across geography, is how health care providers increasingly are being reimbursed. And that means being part of a network. We are charting our future through developing VHAN.”
The Medical Center’s 21st Avenue campus is still growing. This year, VUMC performed 40 heart transplants and opened a new 34-bed transplant surgery ICU unit. “We are the largest transplant center in the Southeast. We will soon open a new procedure floor for our Heart and Vascular Institute,” Balser said.
Williamson Medical Center (WMC), one of VUMC’s affiliate medical centers, is constructing a new, three-story pediatric services tower, the Monroe Carell Jr. Children’s Hospital Vanderbilt at Williamson Medical Center. The new facility will offer expanded pediatric services provided by Vanderbilt clinicians, including a Pediatric Emergency Department and a pediatric inpatient unit.
VUMC is harnessing its expertise in information technology (IT) and workflow engineering to re-envision the outpatient experience, making it easier for patients to make appointments, update their personal profiles, pay their bills, view their records and even receive lab results after office visits.
The goal, Balser said, is to improve the quality of the interaction between patients and their providers — making these interactions more efficient, productive and meaningful. Many of these improvements will be supported by enhancements to the popular Web-based portal MyHealth@Vanderbilt.
An example of how MyHealth@Vanderbilt is having a major impact is through a highly successful and innovative blood pressure control project. Nationwide, only about half of patients have their high blood pressures under adequate control, which increases their risk of suffering a stroke, heart disease or kidney failure.
At Vanderbilt, 20,000 patients are now interacting with care coordinators through the MyHealth@Vanderbilt portal, checking their own blood pressures at home, and receiving prompt guidance on whether their medications need to be adjusted.
As a result, more than 85 percent of these patients have brought their blood pressures under control, Balser said, twice the national average. Vanderbilt is beginning to apply similar approaches to heart disease and diabetes management.
Balser emphasized that one of the Medical Center’s major priorities is to streamline documentation and simplify data management in the inpatient environment through enhanced IT, which is intended to significantly improve the amount of time nurses can interact directly with patients at the bedside.
Already, efforts are underway and a timeline has been established to achieve this goal.
Another IT innovation is “Integrated Presence,” a way for clinicians to see “everything that’s happening at the bedside,” including vital signs, with the help of an iPad through apps that are being developed.
Advancements such as these harness the power of IT and help providers at the bedside make more informed decisions that can improve patients’ care. Integrated presence, Balser said, “is going to fundamentally change the way we deliver health care across the nation.”
In education, the Vanderbilt University School of Nursing is training the University’s largest professional student cohort, with 900 students. Half of them are also learning remotely, from 43 states and foreign countries, through innovative learning platforms that allow them to participate in a virtual classroom with VU classmates in real time.
At the School of Medicine, nearly 6,000 applicants competed for 96 slots in the entering class this year — a 5 percent acceptance rate. This increasing selectivity reflects Vanderbilt’s momentum as a national leader, and a place where leaders are trained.
Under the Medical School’s new Curriculum 2.0, medical students begin clinical training their first year in teams that include students from other disciplines including pharmacy, social work and nursing to create a more authentic learning experience that reflects the clinical setting.
When it comes to biomedical research, Vanderbilt is growing, not shrinking. While revenues through NIH have been impacted by sequestration, grants from industry sponsors for drug discovery and advanced clinical trials rose by 25 percent in the last fiscal year.
Philanthropy also rose by 20 percent this year over the prior year, and much of that investment goes to support research.
Examples of Vanderbilt’s leadership in biomedical science include its Vaccine Research Program, a major part of national efforts to stay ahead of emerging infectious diseases like influenza, and its Personalized Medicine program, which is transforming medical treatment in another way.
Within recent weeks, Vanderbilt became one of only 10 academic medical centers to receive the NIH’s BEST (Broadening Experiences in Scientific Training) grant for the ASPIRE biomedical graduate training program.
Depending upon how you count them, adverse drug events are either the fourth or sixth leading cause of death in the United States, Balser said. The consequences of drugs that don’t work or that cause serious side effects are not only harmful, but enormously expensive.
Through its PREDICT program, VUMC identifies genetic variations that affect patients’ responses to various drugs, well before patients are treated. Vanderbilt’s electronic ordering systems warn clinicians if the drugs and dosages they are preparing to prescribe to their patients may cause unwarranted side effects.
More than 14,000 Vanderbilt patients have been genotyped to date. Five drugs are now included in the “early warning” system for physicians, with more coming on line each year. Through PREDICT, patients receiving care at VUMC are avoiding serious adverse events, including blood vessel stents that clot and cause heart attacks, hemorrhagic strokes or kidney failure.
In cancer treatment and research, the Vanderbilt-Ingram Cancer Center finds the genetic “Achilles’ heel” of malignant tumors and determines which drugs will be most effective in stopping the cancer.
The program has genotyped more than 2,600 tumors (mainly breast, colorectal, lung and melanoma) has allowed targeted therapy with unprecedented life-changing outcomes for hundreds of patients since it began in July 2010.
MyCancerGenome.com, a Vanderbilt-hosted site that directs patients and their physicians to the nearest locations to receive targeted therapy, receives 1,500 visitors every week, and soon will be an app on the iPhone so that more oncologists around the world can benefit from the information found here, Balser said.
VUMC has invested in a national advertising campaign to raise awareness about Vanderbilt breakthroughs in delivering personalized care.
“We have incredible momentum, and as our reputation grows, patients, students, and the most talented faculty and staff will want to join us,” Balser said.
To view a video of the address, go here. VUnetID and password required.
