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January 29, 2006

Costs, Healthcare, Healthcare

That's right.  Healthcare twice.  When talking about efficiency, you must consider cost and two aspects of healthcare--the technical aspect, and the service aspect.  The technical part is what CMS is looking at when they ask about conformance to standards of care.  Are you treating your diabetic patients according to established professional standards?  Did surgical patients receive antibiotics within the two hour window pre-op?  These are relevant questions, related to the technical quality of care.  But there are two problems:  1. Most people just don't understand or don't care or can't take the time to search for the answers.  They go with what their neighbor says.  2. Fudge factors.  No provider wants to look bad, so everyone plays the "my patients are sicker than your patients" game.  Their statistics are multiplied by a fudge factor prior to publication, and the resulting numbers are all but useless.  (The Enron syndrome!)  CMS and others are putting forth a major effort to educate patients about what the questions are about and why the answers are important.  And there's some evidence this is working.  A little bit. But they still fudge the answers.

On the service front, patients do understand this.  How easy to make an appointment.  How long in the waiting room.  Again, some don't care.  My neighbor waited 3 hours in a surgeon's office but told me, "That was OK, because he's very good."  But some do.  My neice left the Northwestern Univ. ER after waiting for 3 hours.  A recent study on access in the DC area by some Georgetown Univ. students reported doctors offices were occasionally rude to them on the phone.  Rude??  To a customer??  Sometimes it's hard to be polite to a customer who is hostile and comes with a "You owe me ..." attitude.  But that's what life is about in a servce industry like healthcare. 

Cost, of course is the numerator in the efficiency equation.  But both aspects of healthcare must be controlled in the denominator.  Robert Samuelson, writing in the Washington Post last Thursday, suggested that most Americans don't really care about cost.  We see the costs of our health insurance (at least most see part of these costs), and there are those annoying co-pays and deductibles, but most of us don't see (or pay for) the real costs of our healthcare.  For most, health insurance is what pays for healthcare. 

None of these factors will become important until Americans have some choice.   When health insurance becomes truly "insurance," when health insurance only kicks in when we have spent at least 10% of our income on healthcare, then cost will be important.  At that point also, service and technical quality wll also become important.   If i'm putting green money on the table, I want an appointment tomorrow, and the receptionist better smile when I walk in!  Then, we'll be talking about providing the best value for the lowest cost.  Efficiency, of course, is the way to beat your competitors in that game.

January 03, 2006

Rewards for Efficiency


“Hospitals are not rewarded for efficiency.”  Numerous people have made this statement, and it is largely true.  You would think that getting a fixed fee for a given DRG would prompt efficiency, but somehow this has not worked.  If a hospital makes a mistake that leads to higher costs, it gets paid extra for correcting the mistake.  (e.g. wound infections.)  Furthermore, the least efficient institutions have the highest reimbursement rates.  This has also been said of “quality” (defined as doing the “right” things, from a technical standpoint).  If an office follows the rules for care of diabetic patients, those patients make fewer office visits, and the practitioner loses revenue.  This latter argument belies the time saved which could be used to see other patients, thus generating more revenue.  Why does efficiency get short shrift in healthcare?  Partly, I think, because of tradition.  When money is short, we whine, and Medicare increases reimbursement rates.  Partly too, there is no incentive.  Efficient institutions (e.g. surgery centers) get paid less than inefficient institutions providing the same service.  Finally, there is a lack of appreciation for what increased efficiency could do.  A recent letter to the Washington Post bemoaned the lack of funds for preventive care for the uninsured.  I have been a patient in the institution where the writer works, and it is a model of inefficiency.  A modicum of attention could make a large dent in care for the uninsured.  
With all these negative comments, are there any positive examples?  Of course!  Generally from people who have to be efficient to do it at all.  Community health centers have always impressed me.  Look also at “Innovations in Medicaid Managed Care” .  We can provide healthcare efficiently.  We just have to want to.