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January 24, 2005

A matter of priorities | Kenduskeag businessman Dan Dauphinee on the projects he chose to fund in an Eastern Maine Medical Center simulation

By Michaela Cavallaro
Dan Dauphinee is used to making difficult decisions about capital investments ˆ— as operations manager for Old Town Lumber Co. and Northeastern Log Homes in Kenduskeag, it's an integral part of his job. But when Dauphinee was asked to participate in a mock capital prioritization exercise at Eastern Maine Medical Center in Bangor last fall, he found the conclusions were much harder to come to. "There's more emotion [in health care decisions] because it's life and death, where if you make a business decision about a saw or a new piece of machinery, it's more mechanical and more mathematical," he says.

Since 1999, EMMC has used specialized software developed by Chicago-based Strata Decision Technology to prioritize annual requests for capital expenditures, equipment purchases and improvements, since the hospital can't fund every request it receives. In early November, Strata CEO Catherine Kleinmuntz led 10 Bangor-area business people through a simulation of EMMC's annual exercise, in which the volunteer board was given a budget of $6 million, and proposals for six capital projects with a combined cost of $8.5 million.

In the half-day simulation, the volunteer board heard presentations on each of the six proposals: digital mammography, for breast cancer screening; IMRT, or intensity modulated radiation therapy, a technique for planning and delivery of radiation treatment; a multi-slice CT scanner, which can replace invasive testing for some tumors; establishment of an outpatient cardiac wellness center; PACS, an archiving and distribution system for radiology images; and robotic technology, which enables doctors to perform minimally invasive surgery.

Following the presentations, the volunteer board members scored the proposals on their impact on facility quality; market share; operating efficiency; patient, family and physician satisfaction; patient outcomes; and finances.

A few weeks later, Dauphinee sat down with Mainebiz to discuss what he learned from the experience. An edited transcript of the conversation follows.

Mainebiz: How did the exercise start?

Dauphinee: [EMMC administrators] sent, a week in advance, an executive summary report. And they picked six cases that, as it turns out, they had already analyzed. But they said, okay, let's have the citizens of Bangor analyze them and see what you would choose.

When we do that at work, we have limited capital; there are certain things that you can do and certain things you can't, and you have to make that choice. Now, when you go to the hospital, we're talking life and death. So the bar rises a little bit, the stakes are a little higher.

So I took this home and it turns out there are two projects [among the six proposals] that pertain to my family life. One is a digital mammography; since my wife is over 50 she has to [get an annual mammogram], and there are complaints from her about how that works.

I've heard that's not a fun exercise.

No, it's not. I kind of nag at her a little bit to go, and she comes back and fusses. So we sat down and read this digital mammography proposal. For one thing, it's more accurate, and you want that of course.

Also, a year ago I went in for a colonoscopy and they found a precancerous polyp. So that's, of course, an issue for me. The multi-slice CT scanner will do that outside the body. There are a couple catches: The preparation's still the same, so you've got to be all cleaned out. And if there is a polyp, they're outside and they can't take it, so you have to go back in. About 20% of the people have polyps.

So right off, those [projects] came to the front ˆ— I'm interested in those and probably a little prejudiced.

Did any of the other projects stand out?

Robotics is an interesting thing, because the surgeon is away from the patient and he does just little minor cuts. It sounds pretty great, but it's expensive ˆ— over a million bucks. So you had some preconceived ideas, and maybe even some prejudice, [about specific proposals] before you get there.

After the presentations, we got to ask questions. Some were about usage ˆ— how often are you going to use it? For robotics, surprisingly enough, it was only three or four times a day. That was surprising to me ˆ— you've got three operating rooms. Partly the low usage was because of the training [needed to use the technology]. But that was disappointing ˆ— are we going to be able to justify a million bucks and only use it a few times a day?

We also asked, what's the gain in health? Is it going to be better? The digital mammography is more accurate ˆ— that's a good thing. And then, will the patient get out on the street quicker, will they get better quicker, which will reduce medical costs and help pay back on the investment?

Bricks and mortar came up every time ˆ— where are you going to put it and how big is it going to be? The robotics takes up just a little corner in the operating room, so it's a non-issue. The same thing with these other machines that really didn't take up a lot of space. When we went to the cardiac wellness center, I thought, gee, why are we doing this when we've got gyms all over the community? But it was explained that this center will be connected to the cardiac recovery area in the hospital ˆ— it's part of the recovery. And the doctors and professional people will be there to monitor patients. So that one began to make a little more sense.

It sounds like all the proposals were sounding good.

Oh yeah ˆ— these are tough decisions. The criteria were fairly sophisticated, I thought; in fact, I called them up ahead of time and asked for their definitions of some of the financial terms, which included strategy, financial quality, market share.

I said, what are we talking about market share for in a hospital? That doesn't make any sense. And the explanation for that was, well, sometimes medical professionals can cherry-pick the things going on in the hospital that are real profit centers. They can take [procedures] away from the hospital, and it bleeds the hospital. Some of it is competition ˆ— if we can offer this service in Bangor, people don't have to travel to Portland, they don't have to travel to Boston. So although it was kind of an odd thing in the beginning to talk about market share, it did make sense once they explained it.

One of the people that was also on the volunteer board is a recruiter, Lianne Harris [president of New England Health Search in Orono]. So when we got to PACS, the computing system ˆ— which is kind of boring, right? ˆ— she said, let me tell you, you're going to recruit radiologists to the area. The first thing they're going to ask is, do you have this system. And if you don't have this system, they're not interested in leaving Boston or wherever, because they can't advance their skills. So, she said, you may have a hard time justifying that, but when I go out and recruit physicians, that's the number-one thing they ask for. So that opened some eyes. She was real passionate about that.
There was a lot of learning in the couple hours we were there.

When it came time to do the ratings, and you had to make your own choices, did you struggle with which projects to prioritize?

Sure. You knew two of them were going to drop out, so you had to weigh which of them it would be. Market share was something that I wasn't too interested in. I was a lot more interested in patient outcome. Physician satisfaction became an issue after we listened to the recruiter. Financial impact ˆ— yeah, we've got to make those tough decisions. And facility quality was what do you gain from it. So you struggle with all of those, and you've got to put down a number [to evaluate each proposal on all the criteria].

One of the questions that I had that didn't really get fully answered was, what about the payer? The answer they gave was, if this [prioritization] process is done with integrity and quality, we believe that will automatically take care of the payer's priority.

How did the results come out?

The first one that didn't get approved was PACS ˆ— image archiving and distribution, all this boring computer stuff. Although recordkeeping is important, and they're trying to get paperless. So it's a hard decision. The other one was the robotics, and I think that one went down because of [the low] usage [rate] and the lack of training. At least for me, that was why.

And then we found out ˆ— it was almost a little bit disappointing ˆ— that all six of the projects had been approved. You're thinking, well, maybe they could have thrown a few that they didn't approve [for the exercise].

What did you think of this method of choosing which projects to invest in?

You could see that before Eastern Maine did this, the squeaky wheel got the answer. So you can imagine a bunch of people sitting in a room with doctors and whatever ˆ— somebody's going to get what they want and somebody isn't, and it probably isn't going to be well organized. The guy that maybe has the biggest personality [gets his project approved]. So this makes it a science. Is it perfect? Probably not, but that's the way they chose to do it, so it's got to be progress.

What did you get out of participating in this?

Those are not easy decisions to make; I don't think running a medical facility is an easy thing. It's open to the public, it's a lot of exposure, you're going to have some criticism ˆ— maybe that's a healthy thing. There's definitely a challenge there. And when you make that decision, you've got to live with it.

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