There is no question that health care costs money. But like anything we purchase we would like to get a quality product. All the States in America pay for health care and to some extent are responsible for the quality of care in each State. Control over quality is exerted through licensing and through medical and pharmacy boards. Management of the Medicaid program is very directly the responsibility of the State. How well do the States provide quality health care? The chart below shows quality and cost rankings of the States. The casual observer would conclude: the more money spent on health care the worse the quality. Does money corrupt health care or is there some other answer?
The New England Journal of Medicine reports a reduction in death rate in States where Medicaid has been expanded. This seems contrary to the previous data. The more money spent by expanding Medicaid improves quality. So does money corrupt or cure quality?
The answer to the previous question is simple: it depends on management. An effort to follow evidence based quality guidelines is usually rewarded with lower cost (see the example of asthma). It does no good to stay within budget but fail to deliver quality (money “down the drain”). The expanded Medicaid programs were showing better management and higher quality than some other State medical programs.
Sometimes, even with the best of intentions, health care money is wasted and poor quality results. Dr. Donald Berwick, previously the head of the US Department of Health and Human Services, commented on the 5 main causes of waste in health care:
- overtreatment of patients
- the failure to coordinate care
- the administrative complexity of the health care system
- burdensome rules
Connecting the dots:
If a State contracts for a highway project there are engineering based specifications on the final product. Failure to have specifications for a highway leads to a bumpy road. Failure to adequately specify evidence based health care leads to waste, high cost and low quality.
The culture of health care in some states is collaborative and quality driven, and in other states the culture is competitive and profit driven. The Midwest tends to be the former (see the chart at the top). The outcome for patients is better in a collaborative and quality driven environment. Not just anybody can lead a health care organization. The ability to build a culture of quality is essential for a government administrator or a health care CEO.
The cost of US health care is about $8000 per person per year. Other advanced countries achieve higher quality at a cost less than $5000 per person per year. Excessive health care waste (Chalice, Robert. Improving healthcare using Toyota lean production methods : 46 steps for improvement — 2nd ed. Page 21) accounts for at least 30% of the cost of US healthcare. The US must attack the problem of waste to reduce overall cost and at the same time foster a national culture of health care quality so all the States have similar high quality levels.