Healthcare Efficiency

Here is a terse summation of previously discussed concepts: 

1. It is important to distinguish between Macro-efficiency (dealing with populations) and Micro-efficiency (dealing with the provision of individual services).  On a macro level, we might ask what is required to care for 1,000 diabetic patients over five years.  On the micro level, we would ask what resources are required to repair an inguinal hernia.
2.  “Efficiency” is mentioned in many articles/documents but rarely defined.  Added as an afterthought, as in, “Yes, we want quality and efficiency.”  Neither term is meaningful unless defined further. 
3. Many talk about over/under/mis-use of healthcare services.  These are macro level considerations and may be a matter of perspective.  What you define as overuse healthcare may be what I consider appropriate use.
4. The basic efficiency equation is Resources spent per unit Healthcare service provided.  In the numerator, one must include both time and money.  When making comparisons—either over time or between institutions—it is important to keep the denominator constant.  Reducing expenses by providing less healthcare is cheap, not efficient.
5. Improving access and quality of healthcare will actually be detrimental to efficiency on the macro level, because more patients will require more care for chronic conditions that were previously untreated or unrecognized.
6. Tools for improving macro-efficiency include prevention and disease management.
7. Tools for improving micro-efficiency include accessible scheduling, value stream mapping, and other operations management techniques.
8. Estimates of the financial impact of poor efficiency range between 30 and 50% of total healthcare costs.  At the individual patient service level, an improvement of 20% within a 12 month period is a realistic goal.
9. Our current bizarre payment system rewards inefficient providers by paying them more for a given service.  Reimbursement is structured by provider type (hospital, teaching hospital, surgery center, etc.) rather than offering a single reimbursement rate for the same service.  
10. The potential financial rewards for improving efficiency are enormous, but the savings in patient time are equally important.  Savings within individual institutions could provide additional capacity without new construction or new employees.
11. When evaluating costs, it is important to look at the entire patient care episode.  For example, if reducing drug expenses for anesthesia results in more nausea and vomiting post op, nothing has been gained.  Similarly, it may be important to look at patient healthcare needs over several years to evaluate costs for some interventions.   
12. Everyone should desire more efficient healthcare.  Patients will see reduced waiting time and fewer tests.  They will probably not see reduced out of pocket costs, unless they are in a high deductible/Flexible spending account situation.  Providers will be more productive, because they will spend less time providing the same service.  Institutions will see higher revenue, because reduced resource use creates opportunity to see more patients.
13. Governmental and institutional thinkers who traditionally write and talk about healthcare policy will have difficulty grasping these concepts, because they are not used to thinking this way.  Efficiency measures do not fit the traditional pattern for healthcare indicators.
14. Private, for-profit institutions will lead the way in improving efficiency, primarily because that is their business.  
15. Effective measurement of efficiency will require changes in accounting techniques.  It will become necessary to know exactly what it costs (time and money) to perform a given test or procedure, or to see a patient.