Healthcare Efficiency

A National Quality Forum steering committee met this week under the banner of “Efficiency and Episodes of Care.”  At a previous meeting, they had agreed not to measure the cost of an episode of care, so I was interested to see how they would spend an entire day doing nothing.  The “episode” under discussion was acute myocardial infarction (AMI), and they defined their study period as extending from one year prior to the event to one year after discharge.  This, of course, involves many providers and many “episodes of care.”  Some even wanted to involve the EMS system that brings the patient to the hospital.  Next meeting, they’ll tackle world peace.

The draft document advocated avoiding “unnecessary costs.”   Unnecessary was defined as care that is not appropriate or indicated.  Thus, the process would be more efficient if the patient only received the care outlined in a protocol, with no thought to the cost of that endorsed care.

Not everyone was sold.  George Isham suggested changing “avoid unnecessary costs” to “eliminate waste.”   A subcommittee was promptly appointed to define waste.  Robert Krughoff (of Consumer Checkbook) pressed the group to focus on cost and resource use.  Others called for a change in culture, since “everyone around the table is invested in the present.”

There was the usual angst over process vs outcome, with most favoring outcome measures.  In reality, however, outcomes are irrelevant.  If you don’t have a reliable process, a good outcome is an accident--a matter of luck.  But, as Emily Dickinson wrote:
“Luck is not chance.
Fortune’s expensive smile is earned.”
Good outcomes in healthcare should not depend on luck, but on reliable, consistent processes of care.

Elliot Fisher asked for an “uber measure to drive major change,” but the idea of cost as an “uber measure” did not occur to him.  In a conversation after the meeting, Kevin Weis rejected the idea of measuring costs of care episodes on grounds that hospitals are already as efficient as they can be, because of the DRG payment system.  In other words, “we’re so good, we don’t have to measure anything.”  This is the standard pablum uttered by arrogant academics to avoid scrutiny.    If you’re really good, you bask in the sunshine and welcome opportunities to demonstrate your excellence or discover opportunities to improve.  On the other hand, if you’re a fraud, you shun exposure and hide behind any available smoke screen.  I smell smoke.

Posted by Dr. Robert Burney at 12:20 PM | Permalink | Comments (0)

Stephen Schoenbaum, et. al. comment on AHRQ’s healthcare Quality Report 2006.  The good news is that 26 of 40 core measures improved, representing about 3% improvement per year.  The authors were disappointed in the slight improvement, and I agree.  If this were a mutual fund, I’d sell.  They also cite the occasional wide variation among states in rates of improvement.  The implicit question is, “Why didn’t everyone improve?”  The real question is, “Why did anyone?”  

Many, if not most of the AHRQ measures have nothing to do with healthcare, so any changes are not related to the quality of any healthcare provided.  For example, whether or not a woman goes to an obstetrician in her first trimester has nothing to do with the actual care she might receive if she actually went.  Factors such as insurance, income, education, location, transportation, etc. are more important influences on this metric.  Also, the  authors wring their hands over the increase in suicide rates, but it’s not clear from the NHQR that those who committed suicide ever received any mental health care.   

The lack of improvement in other factors is hardly surprising.  Practitioners and institutions will do those things that help them do what they do faster, better, or cheaper.  And,in that context, “better” means it helps differentiate them from other practitioners, thus bringing in more business.   Similarly, it could be argued that establishing practices to immunize all children completely brings more business to the pediatrician’s office, so he will do that.  Presto!  Those numbers are better, and the variation is narrower.

As the authors point out, many measures are complex, with many parties involved.  Colonoscopy is more widely done when someone else pays for it.  Pre-operative antibiotics to prevent wound infections is more successful as an institutional policy that ignores the surgeon.  (See previous posting here, “My Operation.”)   This is of proven economic benefit to the hospital tho not to the surgeon.

“The practices of high performing states should be . . . disseminated among other states.”  This assumes, of course, that the states are interested.  (Been following the SCHIP debate?)  

If we establish goals, we must apply pressure at appropriate points.  Decreasing the number of coal-fired power plants would probably do more to reduce hospital admissions for asthma than increasing practitioner visits.  

The NHQR report is a valuable benchmark, and Healthy Patients 2010 constitutes laudable goals.  But neither has much to do with healthcare, per se. 

Posted by Dr. Robert Burney at 09:28 PM | Permalink | Comments (0)

Someone is beginning to talk about reducing U.S. Healthcare expenditures in a way that brings efficiency to the table.  Most of the ideas are . . . well, wrong, but at least there’s a conversation.  In a recent Commonwealth Fund report, Karen Davis talks about options to slow the growth of expenditures.  If you look at total expenses, there are only two factors:  amount of care used and cost of care episodes.  Many economists glom onto “unnecessary care” as a convenient target, but that borders on paternalism and brings up the question of who decides?  Do we want someone in Washington deciding that you don’t need your gall bladder out or your hernia repaired?  Would you tolerate an 800 number voice advising you to take two aspirin instead of going to the doctor?

 Another option is enhanced healthcare literacy, so patients could make those decisions themselves.  Along with literacy goes the availability of information to make informed choices about whether to have that operation and where to go for it.  Paying more out of pocket heightens consumer interest.

The flip side is preventive care.  Many worry that patients will forgo immunizations or surveillance exams if they had to pay for them.  One proposal is to shift those cost to the insurers by exempting payment from deductibles.  Another idea is to shift responsibility for the public’s health (as opposed to healthcare) to public health departments.  Flu shots and mammograms would then be provided by your local health department.

Other ideas in the above report include:
1. Increase the effectiveness of markets by promoting competition and improving information (to consumers) on costs.  Amen to that.
2. Increase competition in the insurance industry and reduce overhead.  This speaks against those who want a single payer.  Competition requires multiple players.
3. Payment incentives to promote efficient care.  Companies today have no incentive to shop for best healthcare service prices for their employees.  They shop for insurance coverage.  There are complicated reasons why insurance carriers don’t do this either.
4. Promote patient-centered primary care.  Not clear how that would reduce cost, but I’m listening.
5. Technology.  The magic bullet.  Helpful, yes, but not the primary answer.  Providers may use technology to improve their efficiency when pressed by price conscious consumers, but not until then.
6. Improve access, affordability, and equity.  Improving access will increase expenditure and do nothing for the cost of individual services.  Motherhood ideas, but irrelevant to the theme of reducing healthcare expenses in the U.S.

But it’s a beginning.  We’ll water it and see if it grows. 

Posted by Dr. Robert Burney at 12:32 PM | Permalink | Comments (0)

A lot of angst these days over proposed cuts in Medicare payments to physicians.  Big money tussles on both sides of the issue.  The Democrats sort of don’t want to do that but sort of want the money to do other things, so sorting out the pros and cons is not a slam dunk.  

Interesting to look at this question from an efficiency standpoint.  A high school teacher of mine used to say, “Nothing ever got stronger by supporting it.”  Put your leg in a cast and look at what happens to the bone and the muscle.  Pushing old folks around in wheel chairs doesn’t develop their ability to walk.  Similarly, pouring money into the healthcare system won’t make it more efficient.  Where’s the incentive to improve if you’re still getting paid for doing it the old way?  In one sense, the best thing that could happen to healthcare would be for Medicare to cut their reimbursements by 25%.  Or, say 10% this year and promise 10% each year for the next 5 years.   That’s what the Germans did to gasoline tax, and guess what?  The people are now driving smaller cars and using less gas.  Funny how that works.  (See previous posting, 1 Jan 07, "Lessons from Germany.")

If hospitals had to work with 10% less revenue next year, they’d find a more efficient way to operate.  Or go bankrupt.  There’s a hospital in my area that’s doing just that.  Going under.  The CEO wrote to the newspaper last week that “We have this management consultant, so the problem is not with our operations.”  Sure.  Incremental changes will beget incremental changes.  When you need a stair-step improvement, you have to wipe the slate and re-design.  A new paradigm.  Usually, this doesn’t come without a crisis, and bankruptcy qualifies.  More institutions should try it.

I once visited an ambulatory care system where a new CEO told employees they would be out of business unless they: saw 20% more patients, cut the average visit time by 30% and spent less money than the previous year.  And they did.  It is possible, but it takes creative thinking and a willingness to cast off old habits.  “New Eyes.”

Posted by Dr. Robert Burney at 09:59 PM | Permalink | Comments (0)

The rising trend has been moderating some.  Increases in insurance premiums are smaller this year, because costs for insurers have not risen as much in recent years.  As Robert Laszewski pointed out in December, global healthcare costs are the product of utilization and unit cost.  Perhaps people are getting tired of going to the doctor.  Or perhaps they are afraid of going to the hospital.  Neither thought seems irrational.

Note, however, that he was looking from the insurer’s viewpoint where “utilization” means utilization per member.   There is an interesting factor that may complicate this equation next year--the uninsured.  Many organizations have been pushing for healthcare for the uninsured, and Congress seems inclined to listen, for a change.  The complicating factor is that all the solutions involve purchasing insurance for the uninsured, without any corresponding pressure on prices to make this budget neutral.  The result will be use of healthcare by the newly insured, raising our total healthcare expenses as a % of GNP.  Insurers will probably not see much change in utilization per member or in unit cost.  And, of course, the efficiency equation will probably get worse.  Providers will see previously uninsured patients now waving money at them.  Where’s the incentive to reduce costs?

Not to pick on the uninsured.  They need healthcare just like the rest of us.  But this could be done in a budget neutral fashion by applying pressure to the price of individual healthcare services.  A good place to start would be major surgery on Medicare’s complex and irrational payment scheme.  Why should hospital A be paid more for the same procedure than hospital B in the same city?  Why do they disallow a procedure in a freestanding ambulatory surgery center but allow it in the nearby hospital’s ambulatory surgery center by the same surgeon?  Of course, the politicians (aka Congress) would have to look the other way while we concentrate on creating value and improving efficiency.  Well, I can dream.  

What do you think this computer would cost if the government bought half of all computers, prices were set by Congress for each manufacturer, and no one was allowed to charge less than the government rate.

Posted by Dr. Robert Burney at 09:39 PM | Permalink | Comments (0)