Healthcare Efficiency

In a blog for Health Affairs, Rob Cunningham actually mentioned “cost.”  Of course, he was talking about the cost of health insurance, not healthcare, but we’re getting closer.  He was reporting on the poor earnings report from UnitedHealth Group and quoted them as saying, “business is bad because the company’s products are getting too expensive.”   And he went on to question the wisdom of “trying to buy everyone into a system that we can’t afford.”  In other words, if health insurance is too expensive, why are we planning to buy health insurance for the uninsured?  That constitutes heresy in the Health Affairs world.

A long time ago, someone said, “If ordinary people can’t afford to send their kids to college, what good is education?”  Colleges have, in fact, priced themselves out of the “ordinary” market by offering ever more expensive inducements to attract students.  In healthcare, we are seeing a similar phenomenon where we promise infinite healthcare and provide “insurance” to pay for it.  First, healthcare became too expensive for “ordinary “ people.  Now health insurance is reaching the same point.  Sooner or later, we have to bring down the cost of healthcare, and health insurance premiums will follow.  
But somehow, no one wants to use the “C” word.  Instead, we talk about “value.”  Or talk about reducing the “overuse” of healthcare.  (Translation:  Overuse means healthcare that I don’t think you ought to have.)  A few places that have discovered ways to reduce the cost of caring for some chronic condition complain about lost revenue and hold out their hands for more money.  Let me spell this out:  you discover a new way of caring for, say, diabetic patients, so they don’t need to come see you so often--thus reducing the cost of their care.  Now you have holes in your schedule to accommodate new patients or reduce the time-to-next appointment for existing patients . . . and you’re complaining?  I suppose if there is no one waiting to see you, you might reduce the size of your company, but I can’t see begging for higher fees because you’re doing a better job.        But that’s the complaint from Geisinger, among others. As Cunningham states, “cost-saving innovation is a losing proposition.”  Note, however, that the concept of “cost-saving innovation” means reducing the demand for healthcare services, not the cost of individual healthcare services.  

United’s problems may  be a manifestation of a slowing economy (that’s PC for recession), and employers may back out of health insurance expenses by various means, as suppliers wring their hands over lost revenue.  However, a few low-cost providers will emerge and may eventually dominate the market.  When I bought my first car, GM was ignoring the Japanese.  Today, Toyota is having them for lunch.  In healthcare today, retail clinics provide a limited menu of healthcare services at low cost without appointments.  The GM of healthcare is wary, but keep your eye on the lunch menu. 

Posted by Dr. Robert Burney at 09:20 PM | Permalink | Comments (0)

A book mentioned before, “The Pittsburgh Way to Efficient Healthcare,” makes several good points about roadblocks to improvement efforts.  One phrase that we hear about every initiative is “the importance of leadership.”  You would think that demonstration of a better way of doing something would be enough to convince the world to jump on board.  However, life just doesn’t work that way.  Machiavelli wrote, there is nothing “more uncertain of success, or more dangerous to manage than the establishment of a new order.”  Those who bring change “make enemies of those who derived advantages from the old” and find lukewarm support from new converts who fear adversaries and doubt new things not proven by experience.  Strong leadership is required to overcome these barriers, and the effort must be repeated frequently.  

This principle is demonstrated repeatedly in Grunden’s book.  Improvements can be made in one location, but a systematic improvement throughout a hospital or healthcare system requires leadership.  

PRHI, the subject of the book, grew from a group of Pittsburgh business leaders who approached the local healthcare sector as a business.  The basic premise was that patient safety and quality of care would restore the fiscal health of the local healthcare industry.  For most healthcare workers, this is not intuitive.  Improvements cost money and take time.  No one has a surplus of either.  Juran once addressed this by having a line item added to his company’s budget for the cost of poor quality.  All the rework, rejects, and warranty work came here, and the total was greater than the company’s profit.  The corresponding items in healthcare might be time spent looking for something that’s supposed to be on that shelf, or trips out of the OR for something the surgeon needs that isn’t there.  Waste.  Re-taking an xray because you can’t find the one that was taken yesterday.  

The PRHI effort is based on the Toyota Production System (TPS), and one key tenet is use of pull rather than push in processes.  That means you don’t send work to the next step until that step asks for it.  The example in the book is a pharmacy that pushed IV medication bags to nursing units, only to find that many were not needed by the time they arrived and came back to the pharmacy.  Waste.  In my surgery center days, we pushed patients into the pre-op waiting area as soon as they arrived.  Patients then sat in their favorite hospital attire and waited for the OR to be ready.  Granted, most times were short, but not all.  The variation was huge, and some patients stayed there for hours.  We could prepare patients comfortable in 30 to 40 minutes, and could have waited for the “pull” signal from the OR.  Patients would have been more comfortable in the general waiting area, and we could have reduced staffing in our expensive pre-op area.  Where was Toyota when I needed them?

Most of the book is examples and case studies of improvement projects.  Some are trivial--turning down water pressure to keep splashes from setting off the GFI switch.  Others are monumental--zero central line infections in the ICU.  But all are based on application of TPS principles to healthcare.  Sometimes the $$ savings are documented, but for others, you have to read between the lines.  Time savings are quoted in reductions in stay or time to complete a task.  These are not always translated into $$.  However, when you save 10% of the time to complete a nursing task, you just created a new nurse FTE for every 10 nurses performing that task.

You come away from this book thinking, “So, why doesn’t everyone do this?”  The answer is part Machiavelli but mostly leadership.  Someone once remarked that “the problem with healthcare is that there is no one in charge.”  By that he meant that there is no one who’s job or bonus depends on running that process as efficiently as possible. 

Posted by Dr. Robert Burney at 09:27 PM | Permalink | Comments (0)

Rep. Henry Waxman began hearings yesterday on “Healthcare-associated infections: A preventable epidemic.”  Chief witness he first day was Peter Pronovost the Hopkins researcher who sparked some controversy when the HHS Office for Human Research Protection terminated his project after he had saved the state of MI $200 K per year.  (see interview:  Their reasoning was that this was “research” and he needed IRB approval.  Makes interesting reading for those fascinated with bureaucracy.  Widespread protests led OHRP to rescind their directive, but only partially.  Stay tuned.  A group from the ASQ will meet Monday with the acting director of OHRP  (ivor.pritchard@hhs.gov )

There are several types of infections to be discussed, and most are included in a new book, “The Pittsburgh way to Efficient Healthcare” by Naida Grunden.  (I bought my copy at Amazon.com.)  Naida wrote the newsletters for PRHI ( www.prh.org ) and has compiled their experience into this book.  The basic theme of PRHI was to use Toyota Production Systems to improve healthcare.  When a production line worker has a problem, they push the red button and everything stops.  A team assembles to analyze and fix the problem, not only for that worker but for the system, so no one else ever has the same problem.  Same idea was used to stamp out central line infections.  When anyone noticed an infection, phones rang, and a team assembled to analyze and strategize.  One ICU reduced their infection rate to zero.  For the year.  That not only saved lives but also saved LOTS of money.   Waxman quoted an IOM estimate that infections cost society $5 billion a year.  That’s Billion, with a ‘B.’  Seems worth doing, regardless of what OHRP says.

And that, of course,  is the justification for the subtitle of the book--efficient healthcare.  Any infection adds time and money to the hospital stay, assuming survival.  One study  concluded that the hospital would lose money on every infection, even if insurance fully reimbursed for the care.  Same care, less time, less money, that’s efficiency.

She  talks about resistance to using Toyota methods in a hospital.  “This is healthcare, and a patient is not a car.”  I’ve often wondered what it is that closes peoples’ minds.  Is there something in medical education?  Graduates of the PRHI “Perfecting Patient Care” institute sometimes return to institutions “ill-equipped to accept change.”  Large minds with small portholes.  I once remarked to an anesthesia resident that the tests she had ordered were not of any benefit to the ambulatory surgery patient.  “Oh, they must be useful.  We order them every day.”  

Posted by Dr. Robert Burney at 09:53 PM | Permalink | Comments (0)

Just when you thought there were a few certainties in the healthcare debate!  Prevention is a good thing, right?  It saves money by keeping patients from needing expensive healthcare.  An article in today’s Washington Post challenges this belief under the heading, “Prevention is often more expensive than treatment.”  Both  Democratic candidates have issued positive statements on the benefit of prevention, but McCain doesn’t see life this way.  (Check out an interesting graphic on candidate positions in healthcare.)

How can this be?  Like so many things in life, it depends on how you look at it.  If you’re a politician trying to minimize healthcare costs for the country, then prevention is not a bargain.  The article cites a Dutch study showing that “over a lifetime, healthy people incur the most cost, followed by the obese and then smokers.”  The reason, of course, is that healthy people live longer and thus have more time to spend money on healthcare.  Smokers die early.  Perhaps Medicare should issue free cigarettes to beneficiaries as a cost-cutting move.  I once advised our hospital administrator to open a motorcycle store, because it would be good for business.  Same thinking.  I remember reading (a very long time ago) that it was cheaper to let a few women develop cervical cancer than to do PAP smears on the population.   An HMO in Milwaukee tried this approach--just stamped all the PAP smears “normal” without even looking at the slides.  A few women died, but the HMO made lots of money.
However, if you’re an individual, you want that PAP smear or mammogram or colonoscopy, even if it does cost the healthcare system money.  Another way of looking at the question is to calculate how much it costs for every year of life saved.  Then, of course, you have to decide what a year of life is worth to society.  Would you spend $1,300 per year on each smoker?  How about $160,000 per year for statin therapy?  For more on these ideas, look at books by Louise Russell.

Bottom line:  before endorsing prevention as a strategy, you have to make some hard decisions.  It’s not a magic bullet.  Targeting the prevention efforts to those who most need them may improve the financial return. 

Posted by Dr. Robert Burney at 08:42 PM | Permalink | Comments (0)