American healthcare providers insurance
Healthcare Efficiency
- Costs2007
Right behind the Iraq war, healthcare cost is the subject voters want to hear about most. But, like imigration, it’s a subject candidates don’t want to talk about in detail. Important here to distinguish between healthcare costs and health insurance costs. True, they are related, but if you want to minimize the money spent, the tactics are different. General principles still apply--if you want to decrease the amount spent, you can decrease the unit cost or the number of units. For healthcare, that would mean decreasing the cost of a unit of healthcare (an appendectomy or an office visit) or reduce the number of appendectomies. The latter approach is called “demand management” and there’s a lot of evidence that it works. Providing protocol-based care for chronic conditions, such as asthma or diabetes reduces the need for healthcare services down the road. This thinking is behind much of the effort at NQF, and it should work--but not tomorrow.
But what about appendectomies? Hard to reduce the incidence until we can design kids without an appendix. That leaves us with reducing the cost of individual healthcare services, a.k.a. efficiency. We could start with the diagnosis--does it really take an MRI? A lot of complaints from those with gray hair that current kids rely too much on technology, in effect treating numbers or reports rather than patients. As a medical student, I went with a surgeon to see a young woman with abdominal pain in the ER. After seeing the patient, the surgeon asked the husband, “Has she had this problem before?” The answer was, “Doc, I’ve never seen her look worse.” And on the basis to that statement, we went to the OR and repaired her ruptured ectopic. No tests, no xrays.
And next? Let’s assume a Dx of appendicitis. The OR nurse pulls a card for Surgeon Jones and assembles the instruments and supplies that he typically uses for an appendectomy. These are run thru the autoclave and laid out on a sterile table in the OR. But, in this hospital, the surgeons got together 6 months ago and agreed they would all use the same instruments and supplies for appendectomies. The Hospital sterile supply room has pre-assembled all the instruments, and a contractor furnishes all supplies in a sterile pack. The OR nurse now has two sterile packages to open, and she’s ready. Faster, better, and cheaper. An appendectomy in this hospital costs 20% less now than a year ago.
Cynics among readers will ask what happens to that 20%. Today, it would go to the hospital bottom line. In a perfect world, it would help them to compete in a price-sensative mark place where efficiency is an advantage.
Bottom line: it is possible to reduce the cost of healthcare thru two strategies:
Macro-efficiency or demand management. Doing the right things for chronic diseases, so patients won’t need as much healthcare in the future.
Micro-efficiency at the individual service level. Virtually any service can be improved, but it takes powerful motivation. There’s nothing like the knowledge that you’ll be out of business unless you beat your competitor’s prices.
Translating these efficiencies into lower costs for the consumer requires transparent price competition. Making rules about how chronic conditions “must” be treated won’t do the job. These rules become a cost of doing business and won’t accomplish the goal in and of themselves. You just can’t make enough rules.
Health insurance costs? These are different but related. A lot of healthcare isn’t included in health insurance. Americans pay more out-of-pocket expenses (see also CMWF reports) for healthcare that anyone else in the world. Bad or good, it’s reality. When’s the last time your health insurance bought you a pair of glasses? A bottle of aspirin? A Band-Aid? A face lift? Well, you get the idea. The 15% or so that we spend out of pocket isn’t included in health insurance, but it is in the cost of health care. If health care costs were lower, our costs would be lower. As individual service costs go down, so does the aggregate expense for healthcare for the country as a whole.
Adding health insurance for the uninsured will NOT reduce the cost of health insurance or the cost of health care. In fact, the total amount paid for each of these will increase after the next election. Regardless of who wins, everyone loses financially. The unit cost for each will not change, because there is not reason for change. The total cost will go up, because more people will be getting more healthcare. This, of course, is one reason provider groups are pressing for this benefit to the uninsured--more revenue for them. What’s missing is downward pressure on prices.
Next time: more on why it costs so much. - Benchmarking
Two meanings for this word: a line in the sand. A performance level to be sought after. A standard of the industry.
OR, a way to improve what you do be emulating others who do similar things, not necessarily in the same industry. For example, an airline and a hospital have both benchmarked with the Indianapolis 500 pit crews to turn over something faster--race cars and airplanes or operating rooms, it’s the same process.
I recently heard a Xmas concert by the Washington Chorus, directed by Eric Stark, and I thought, “This is what healthcare needs.” In addition to the many and varied voices of the Washington Chorus, he had the following resources at his disposal:
An organ. A BIG organ.
The National Capital Brass and Percussion.
The Woodlawn (high school) Chamber Singers.
And Mr. Stark was in charge and in control of everything. The singers sang when he wanted, and the instruments played when he wanted. He had an effect--a sound--that he wanted to create for the benefit of the audience. He was providing a service. You could take the same talented musicians, and the performance would not be the same without a conductor.
And that’s what we have in healthcare. A group of talented individuals without a conductor. No one in charge. No one in control. No one making eye contact with each performer to ensure a coordinated performance. Ostensibly, there is someone “in charge” tho you’ll get arguments over who that is. Want to test this? Go into the ER or the OR of your local hospital and ask several people, “Who’s in charge of this operation?” Is it the hospital administrator? The Director of nursing? The Medical Director? The anesthesiologist? The surgeon? And generally, there is no one in control, which is another question. Who is monitoring the process of care to make minute by minute adjustments or summon needed resources at exactly the right moment? Who monitors outcomes and redesigns the care process to constantly improve the outcome?
For the Chorus, Mr. Stark was in charge and in control. The outcome was wonderful, but I bet it wasn’t so at the first rehearsal. It just kept getting better and better. Maybe he gives lessons.
- Convenient Care
http://www.minuteclinic.com/en/USA/
The definition of efficiency includes saving time as well as money, and that precludes sitting in a waiting room. It may come as news to some that saving patient time also counts in this equation. Mothers complained about bringing their little darlings to the surgery center 60 minutes prior to surgery. So, we cut the time to 30 minutes, and, despite dire predictions, nothing bad happened. Oakwood hospital in Dearborn, MI pioneered the 30 min door-to-doc time in their ER. (The guarantee is now down to zero min.) It can be done, but first you have to care.
Apparently, patients do care about saving time. MinuteClinics and other “retail healthcare” establishments are gaining traction. Open 7 days a week. No appointment necessary. Prices posted on the door. Try that with your family doctor. The concept has not been endorsed by the medical establishment, and has been largely ignored. (I remember when General Motors took this attitude with Japanese cars.) But look who’s coming to dinner! The Mayo Clinic. They h
