Healthcare Efficiency

Someone sent me some quotes from the Institute of Medicine's report, "Crossing the Quality Chasm" that left me scratching my head.  Under the heading of "Efficiency" they talk about getting "the best value for the money spent" and cite various strategies for reducing waste and administrative or production costs.  Then, in speaking about the National Healthcare Quality Report, they state, "The scope of the (report) is limited to quality of care.  Thus, efficiency is not included."  This occurs after they have identified six aims for improving the quality of healthcare, which include efficiency.  Then, later, they say, "Efficiency is clearly related to the quality of care."  How's that for having it both ways! 

Well, "quality" has become such a slang word that you can define it any way you want, but you should be consistent.  Indeed, quality will have different meanings to different customers.  And you can decide to write a national report about all the aspects of quality except efficiency.  But then you have to publish a National Healthcare Efficiency report. 

Part of this confusion is due to a lack of business training by those writing IOM reports.  They have never had to meet a payroll.  Also, many have vested interests in preserving the status quo.  If anyone ever finds out that their institution charges 50% more for the same procedure, their job would be in jeopardy.  Large healthcare institutions have traditionally fought smaller, more efficient systems--usually politically rather than in the market place.  Look at the current battle over specialty hospitals.  

If cost is a major problem for US healthcare, we need some examples of efficient providers.  We need published benchmarks for the cost of doing a knee arthroscopy.  As patients become responsible for a greater share of their healthcare costs (e.g. HSAs), they will need information for making choices. 

Posted by Dr. Robert Burney at 05:39 PM | Permalink | Comments (1)

Both the value and the efficiency equations have cost as a factor.  Value = cost per desirable characteristic.  Efficiency = cost per unit of service.  Unfortunately, these are conceptual equations, and solving for the common variable  doesn’t produce a meaningful result.  What would be helpful depends on your goal.  Reduce cost? Whose goal is that!   Patients care about the cost of health insurance (and co-pays) but not the cost of healthcare.  Someone else pays for that!   How about value?  Well, if cost is not a factor, then value can’t be, and neither can efficiency.  Patients go to the hospital where their surgeon works.  They go to the surgeon that their primary care doc sends them to, or to the surgeon who operated on their sister/neighbor/etc.    Some patients do research, but it’s tough.  I looked at the HHS web site to compare hospitals in the DC area.  Much of the data didn’t exist.  For the key factor that interested me--antibiotics within one hour of surgery--only one hospital reported data, and the results there weren’t excellent.  Overall however, one hospital consistently outranked its peers and outperformed the national average on most of the indicators.  The Joint Commission web site is generally unrewarding, as it contains generalities and a paucity of facts.  So much for value.

 
Costs are even harder to ascertain.  Even hospitals don’t know what their costs are!

And efficiency?  Walk into any hospital ER and ask how long it would take to see an MD.  Most don’t know or won’t say.  But that’s what I care about!  It’s my time, stupid, and I don’t want to waste it in your waiting room.   But few numbers are available.
As cost becomes more important to the individual patient (I think it will), then providers will become more interested in efficiency.  If you want to reduce cost, you must become more efficient.

Posted by Dr. Robert Burney at 08:23 PM | Permalink | Comments (1)

Value, as described by Barry, is a different tho related equation.  Value = quantity per unit cost.  If the institution is efficient in providing its services, the value for the patient will be higher (lower cost).  However, this is only true in a competitive market.  When the patient has a choice, he will select the provider who gives the best value--and that will be the most efficient one.  Not many patients are value shoppers in the healthcare market at present.  Patients have relatively little choice, and tend to listen to their neighbors and friends rather than looking at objective data.  And there is information available.  A new website (www.hospitalcompare.hhs.gov) by HHS compares hospitals on specific criteria for the technical quality of their care.  This does not say anything about service quality or anything about cost.  Actually, most patients have little idea about what their healthcare costs.  Those who make choices based primarily on cost are beginning to look overseas--not only for drugs, but also for open heart surgery.  Been to Thailand lately? (www.bumrungrad.com)

As value becomes more important, efficiency will be the engine that drives better value by enabling better healthcare at lower cost.  Yes, we can have it all--better value, higher efficiency, lower cost, better technical and service quality.  But it won't happen by accident.  We have to care.  We, as patients, have to demand improvement.  And our system has to reward those who provide it. 

Posted by Dr. Robert Burney at 08:29 PM | Permalink | Comments (1)