Donald Young, M.D., Ph.D.,

Diagnostic Insight, 1998 Interview

Donald Young, M.D., Ph.D., runs the clinical laboratories at the Hospital of the University of Pennsylvania as well as Presbyterian Medical Center. These hospitals are now part of the University of Pennsylvania Health System that owns four hospitals and about 100 physician practices; one of Young's jobs is to integrate the individual laboratory segments into a smooth-running, cost-efficient entity — while maintaining very high standards. "It's an interesting challenge and an opportunity to upgrade the quality of service," Young said. As part of this challenge, he is installing the same types of testing equipment throughout the system to ensure that all physicians obtain the same quality of lab work and that results are the same throughout the system. Besides the hospitals it owns, the health care system is also affiliated with several hospitals that refer their complicated patients to the "mother" facility. Young noted that since the development of the health system, "The kinds of patients we see now are different. The University hospital was once both a tertiary care center and a community hospital, but the community hospital aspect has almost disappeared. We recently did four transplants and one major trauma case in one night, and our busiest day ever was when we did five liver transplants," he said. "It's a change in the character of what we did in the past."

There has been some concern among the physicians in primary practice who are now part of the health system about the systemization of what they do and possible added paper work. "Even prior to the most recent round of ICD-9 code compliance regulations, the AMA has calculated that more than 40 percent of a physician's time was spent on paper work, and they fear that a health system may add to that," Young said. Young, who is Vice Chair for Laboratory Medicine in the department of Pathology and Laboratory Medicine of the University of Pennsylvania, Director of the hospital's William Pepper Laboratory, and Director of the Philip Custer Laboratory at Presbyterian Medical Center, has been with the University of Pennsylvania since 1984. Born in Belfast, at age five Young moved with his family to Scotland, where his father served as chair of pathology at the University of Aberdeen. He earned his medical degree from the University of Aberdeen and served as a lecturer in pharmacology there. He completed a Ph.D. in chemical pathology at Hammersmith Hospital and Royal Postgraduate Medical School in London. Young came to the National Institutes of Health (NIH) in Bethesda, MD, in 1964 as a visiting scientist, and became chief of the NIH ' s clinical chemistry service in 1965, where he remained until 1977 when he became chief of clinical chemistry at the Mayo Clinic. He was also AACC president in 1980 and IFCC president from 1985-1990. To unwind after 12-hour days, Young is writing a book about the effects of drugs on laboratory tests. He generally writes one book a year and has published more than 20 to date. He is married with three grown sons. In the following interview, Young discusses the workings and strategies of the University of Pennsylvania Health System.

ROBERT BAUER: Philadelphia has two big health care systems: University of Pennsylvania Health System (UPHS) and Allegheny. The Hospital of the University of Pennsylvania (HUP), the lead hospital of UPHS, has been a very profitable institution for a number of years and at the same time Allegheny has been struggling. Why is this?

YOUNG: Philadelphia has more competition between managed care companies than almost anywhere else in the country. Allegheny (of Pittsburgh) moved aggressively into the Philadelphia market in recent years by purchasing several hospitals and many physician practices. In my opinion, Allegheny overpaid for the hospitals that formed their net work and for their individual physician practices. As you might expect, their new network was not well integrated or as well managed as some of the more established institutions in the city. So it suffered from the problems of higher operation costs. Allegheny was overextended in this market. [Note: Dr. Young pointed out that Allegheny was sold in November to Tenet Health Care; consequently, as a for-profit company, Tenet undoubtedly will change the way things are.

ROBERT BAUER: Today, the number of beds in Philadelphia is roughly six per 1,000 population. By some estimates this is almost twice the number needed—a situation that occurs in other cities as well. How is the surplus created and how will these beds be rationalized?

YOUNG: There are roughly 5,000 excess beds in this city. The intense competition for patients is driving reimbursement down, which in turn creates continuing pressures to reduce costs by treating patients as outpatients to minimize the number of admissions. As a result, we have a surplus of beds. As you might expect, no hospital is volunteering to close down beds. For now, it appears that beds will be closed only when there is a situation—such as has happened at Allegheny—that forces the closure of a hospital.

We are under pressure to contain costs as our reimbursement shifts toward more capitated contracts and managed care

ROBERT BAUER: So what is HUP's strategy in this market?

YOUNG: We, too, are under pressure to contain costs as our reimbursement shifts toward more capitated contracts, and more and more of our patients are in managed care. Like Allegheny, our system is broad. The difference, however, is that we are much more integrated. First, while we, also, have purchased about 100 primary care practices, we were not under the general misconception that you make money with primary care practices. These practices are important because they get patients when they are sick, and our physicians can direct patients to our hospitals. In many respects primary care practices are loss leaders, but they feed patients into the hospitals. Second, we are building a truly integrated system. We are making the expertise of specialists in the medical center available to primary care physicians. We have a system-wide disease management program that specifies the precise management of patients with particular diseases. Everyone involved works together as part of a large team: physicians, laboratory people, dietitians, social workers. The goal is to treat our patients as well as they would be treated by a specialist in the medical center—and it looks as though it is beginning to work. We are already seeing the costs of certain diseases such as congestive heart failure reduced by 50%, and the number of people with unexpected ad missions to the hospital is dropping dramatically.

ROBERT BAUER: Did this contribute to UPHS winning the National Health Care Quality award in 1998?

YOUNG: The award, in large part, recognized our disease management program, which is quite impressive. Typically, a disease management plan is developed for a specific disease such as diabetes mellitus, focusing on reducing the major complications of the disease; in this case, kidney and vision problems. To do this, we need to make sure early on that patients are followed in a systematic way through the progression of the disease—that they see physicians in a proper time frame, that organ functions are monitored appropriately, and that progress is documented on a regular basis. As the condition worsens, it is addressed promptly—often in the field, which reduces the number of diabetes-associated hospital admissions. These care plans are like the critical pathways for inpatients. They cover everything from laboratory tests to drugs to procedures. We are trying to differentiate ourselves by showing that we are truly committed to the patient in the primary care setting.

ROBERT BAUER: It seems that it would be easy to put acute care episodes into pathways rather than medical cases such as diabetes, which can span a life time. Are HUP's pathways capable of addressing long term windows and highly diverse patient events?

YOUNG: You're right—we have been more successful with surgical cases than with medical cases, simply because surgical patients and trauma cases are relatively short-term events with a more predictable patient response. But our long-term goal is to describe the life of the chronic patient in the same way. The diabetic will have the disease for his or her life and our objective, of course, is to prevent the complications that normally end it early. It is true that this is complicated by the different stages of the disease, different ages of onset, and different lifestyles, but this can be characterized if you look at very large numbers of patients. Our plan allows us to collect uniform data on the diseases so that we can make adjustments to our practices. Initially, a team meets to develop the first pathway. There is a lead individual who coordinates key players who will be involved and oversees the pathway development. Then one individual is selected to be in charge of the overall program. He meets periodically with individual physicians in our network; his goal is to link those physicians in a continuing education process. Our primary care physicians are an integral part of our health management system.

ROBERT BAUER: How is this program affecting the use of diagnostic tests?

YOUNG: We have a fair number of research studies under way to determine what is happening. The change has not been as dramatic as you might expect. As these critical pathways are being implemented, the impact on the lab is really very little. We believe that more attention needs to be given to the use of diagnostic tests. But I think one of the things to put into perspective is the contribution of laboratory costs to overall costs. We are completing an analysis of the costs of all DRGs in 1.3 million patients from 60 university hospitals. The average proportion of total patient costs attributable to the laboratory is about 6 percent for a surgical case and 9 percent for a medical case. Generally, laboratory costs are a small part of the total cost.

We want to transfer all routine diagnostic tests to our core laboratory

ROBERT BAUER: In this environment, what is the strategy of the laboratory?

YOUNG: The laboratory strategy mirrors the overall health system strategy. The University of Pennsylvania owns four hospitals and has affiliations with several others. The operating strategy is that HUP, as the major hospital, will provide support services to all patients in the other hospitals. By pooling resources, we help them treat their cancer patients better, and they'll send us their complicated cancer patients. This plan of referring the most complicated cases to the lead hospital has brought the hospital up to 100 percent bed occupancy. And, hopefully, we are improving the quality of care in the other hospitals. As far as the lab is concerned, we want to transfer, where feasible, all routine tests (not STAT tests) tests to our core laboratory and run them on the automated system we are currently installing; we hope to have it working by the end of the year. For the hospitals that we own, the-long term plan is that any diagnostic tests requiring less than three hours turnaround time will be performed locally on site, and those with a same-day turn around time will be brought to our lab and put into our system. Additionally, we will support blood banks and STAT test labs in the other hospitals. We expect our cost of providing tests to go down as the unit volume goes up. We anticipate that the send out work from our own hospitals and the affiliated hospitals will eventually come to us. Also, the physicians in our primary care network send their lab work to us. Basically, we are beginning to compete with large commercial laboratories.

ROBERT BAUER: Are support systems in place or coming on-line that will support this effort?

YOUNG: In the hospital, we have pneumatic tube systems and computer terminals in place on the nursing stations. With our new robotics system, test results will be ready in about 20 minutes from the time the specimen hits the track. When specimens come by pneumatic tube, results could be ready in as little as 30 minutes from draw time, instead of "by noon" like it is now. The goal is that when a physician anywhere in our system places an order, it is transmitted directly to our hospital information system terminal for processing. The nurse or physician will type in the patient's ID and indicate the diagnostic tests to be done. These data go to the laboratory information system via the Hospital Information System that then sends the signal back to the nursing station and prints out a bar-coded label, which carries information about what tests need to be done on that particular specimen. The blood is drawn and the label is put on the tube. The bar-coded specimen reaches our laboratory by pneumatic tube and then literally all we have to do is take the tube out of the container from the pneumatic tube system and insert it onto the hematology or chemistry track. The chemistry track contains the automated centrifuge and can do all the aliquoting as well as create sub-tubes for all diagnostic tests that are not performed directly on the track. For our primary care practices, test results will be printed on the printer in the physician's office. Because of the way the computer terminal functions, we also hope to reduce the number of errors. Screens are brought up that show the most common tests. When the nurse points and clicks different tests, those tests are ordered. And when we have built the entire disease critical pathway, we will be able to use the terminals to show the most appropriate diagnostic tests for each patient based on his care pathway.

We could support more point of- are testing if procedures evolve and prices drop

ROBERT BAUER: If you are turning tests around in 30 minutes, will point of care testing have a role at HUP?

YOUNG: We are not wedded to the concept of a large robot, even though we think this is the way we would do it at the moment. In the future, if point of-care testing were to evolve and prices were to drop to a level competitive with those of the laboratory, I think we could support more point of care testing. We've set up a point of care testing committee that has the authority to say whether somebody may or may not conduct point of care testing and to decide what instrument will be used. The laboratory role is to provide quality assurance. The laboratory has a key role in this program. Decisions are made based on clinical need versus cost. In fact, we support our trauma program with point of care testing now even though it is more expensive. We believe that it is appropriate to do some testing in helicopters or immediately upon arrival of patients. It's not that point of care testing can't be done here, but the case of why it should be done must be presented to the point of care testing committee. We permit some point of-care testing in the intensive care nursery. A key point is that everything will be done the same way so we can relate, for example, a prothrombin time in a physician's office to any other prothrombin time that was done in the health system. We perform a large number of bedside glucose tests all on the same device. We have also developed a protocol that indicates when it is appropriate to perform bed side glucose testing.

ROBERT BAUER: What has been the committee's impact on bedside glucose testing?

YOUNG: The number of tests is substantial, but less than it used to be. It was about 250,000 per year and we are now down to about 180,000 within the hospital. We feel that there is reason to reduce this number further, but this effort is rather low on our priority list now. We have many other higher priority "crises" to deal with in the hospital.

ROBERT BAUER: Laboratories looking at robotics systems seem to be torn between buying a generic system or acquiring closed robotics from instrument manufacturers such as Abbott or Roche. How did you arrive at your decision?

YOUNG: We felt it would be better for us to have a universal track that allows us to go to what ever manufacturer has the best analyzer so we are not locked out of a Bayer analyzer just because we have a Roche track. We can, hopefully, interface everyone's devices to our universal track.

There are a lot of concerns about DRGs – but we’re stuck with them

ROBERT BAUER: In closing, what major trends do you think are sustainable and will really play into the long-term development of the market—and which ones probably won't be with us long-term?

YOUNG: It is going to be increasingly difficult with reductions in reimbursement to be able to deliver the level of service we would like and remain profit able. I think we are stuck with DRGs for a while. There are obviously a lot of concerns about DRGs, especially with how broadly they are defined. The DRG lumps together many people with different degrees of illness at different degrees of severity. A certain number of outliers has been excluded, but the normal DRG still covers many different degrees of severity with the patient. I have a sense that Medicare and Medicaid will continue to focus on reducing the DRG payment. I think capitation payments will increasingly be challenged because there is a real concern among both patients and physicians that many shortcuts are taken that are not in the patient's interest. I think there are enough bad experiences that are beginning to get the attention of Congress. Outpatient fee-for-service payments are likely to be re placed by a form of DRG that I think will be more procedure- than disease-focused. An office visit would be a procedure. An EKG would be a procedure. But this change is going to be slow to evolve. I expected that it would already be in place by now, but it hasn't happened. We have invested much money and effort in developing a molecular pathology laboratory. These tests will have an increasingly important role in medical practice. We are very concerned about.

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