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.
