Posts Tagged congressional management style

US Healthcare Diagram — results are what count

us-healthcareThe U.S. healthcare system is going to change or at least be updated in the coming years.  So, when congress tinkers with the system what might be good changes and what might be bad changes?  That is the $3 trillion dollar question!  It would be fair to say most people and most congressmen do not understand U.S. healthcare — the prevailing notion is overwhelming complexity and way too much cost.  However, this blog is going to make the case the key to understanding and the key to making changes is to keep your eyes on the results.

What results?  It’s not complicated, it has to do with measurements.  Consumer Reports and J.D.Power know we want to buy value.  And, value in this case is the reasonable cost for wellness, longevity and successful treatment of disease.  That’s it, three things.  Whatever changes or tinkering are contemplated we just need to know those three things will be getting better and simultaneously costing less.  Politicians have a really bad habit of saying the changes they propose will do the job.  Nobody can predict what will work — there are always unintended consequences — so, any proposal must include a dedication to measuring the outcomes we want — if the change does not work it needs to be discarded as soon as possible.  And, discarding what does not work can’t wait for the next election and should not wait until tomorrow.  Simply, we want results, and we want the data as proof.  On a hopeful note, if something works, keep doing it.

The above diagram describes U.S. healthcare.  It is more simple than the systems in other countries.  The system is linear — people, illness and unlimited money on the left side pass to the results on the right side.  This is a flow diagram of the system.  The complexity can be hidden by thinking in terms of the five boxes.  Later, some of the complexity will be discussed.  First, consider the boxes:

  1. Money to pay for the system.   The money people earn is paid to the health care system.  Money is money — it does not matter if the money comes by way of taxes, insurance or cash.  Funds that do not come from insurance come from the other sources.  This is the cost of U.S. healthcare which is about $3 trillion.  Don’t pay the money, you don’t get healthcare.
  2. The healthcare providers.  Traditionally we only think of doctors, hospitals and drugs.  We often overlook the other things in the box.  Things we don’t like, things healthcare providers would like to see in another box.  These other things are hugely expensive and fully under the control of the healthcare providers.  Unnecessary treatment is perhaps one of the worst — treatment or tests that are not needed.  For example, an EKG done as part of a yearly exam on a healthy person.  Profit is in this category.  Clearly, no profit, no healthcare system.  But, profit beyond what is needed is just waste for the system — it is money that leaves the system and does not come back.   Inefficiency comes in many forms.  Failing to prevent diseases early, only to spend more money later is supremely inefficient.  Corruption is a problem in every human endeavor.  Errors turn huge amounts of money into waste.  The money spent on medical liability suits is just the tip of the iceberg.  Money spent to prevent errors is minuscule compared to the money spent on drug marketing.
  3. Who gets healthcare?  Everybody.  The aggregate need for healthcare is fairly stable for the system.  But, for an individual the need is hugely variable — an auto accident is not predictable.  And, when disease strikes most of us can not afford the cost without insurance.  Statistics show 50% of Americans do not have access to $4oo for an emergency.  The very people who don’t have emergency funds are the very people who do not want to purchase health insurance.  Sadly, those people end up in bankruptcy while the system grudgingly provides the care.  Now that more people have insurance those without may find less compassion from the providers.  Many feel there are freeloaders in the system — people who do not contribute.  Does a birth defect, mental illness or low IQ make people freeloaders — that’s an ethical question which is beyond the scope of this discussion.
  4. Waste.  In monetary terms this about $1.5 trillion dollars per year with a huge death toll in the US.  A hospital acquired infection is very expensive and kills many of those affected.  The high profile infections from spinal injections are just the tip of the iceberg, again.  Re-hospitalization for an unresolved health problem is another example.  Paying $800 for a $10 epinephrine injector is another example.
  5. The results.  We want those good results.  Not just for cancer patients, not just for heart attack victims, not just for you, but for me too.   We don’t want promises, we want results.  In this age of smart phones and millions of apps there is no excuse for failing to have the data to prove the system is working in our hands every day.  We want the results today, not after several years of scrubbing the data in some moldy university.  We all must keep our eyes on the results and hold our elected officials accountable.

Complexity.   Medicine is a science and by its nature is very complex.  Open heart surgery is a good example — there are few people who understand the issues involved.  But, the system, from the patient’s view does not need to be complex.  In one country the cost of hospitalization is $400/day — the people there know exactly how much the illness will cost.  In another country, the prices of office visits are posted in the waiting room — it does not matter what insurance company you might have.   In another country all the providers use the same medical record system — not a big deal to move or see a consultant.  We seem to tolerate the complexity of our system and think it should be as difficult to understand as heart surgery.

The US pays about twice what other countries do for similar or better care.  There is enough money in our system now.   Our problem seems to be in the area of wasted money and effort.  It seems unlikely that just reducing payments to providers will reduce errors and wasted money — this supply-side economics does not get to the real problem.  More than likely, lower payment to providers will only result in lower income for them and perhaps more errors and unnecessary services.  But, if it works, do it.

Back to the initial warning.  Keep you eyes on the results of the system and the cost.  Whether any economic hypothesis proves correct is irrelevant.  What matters is the system must move in the right direction, always.

There is a lot to recommend the quality improvement method called “Plan – Do – Study -Act” or PDSA.  The idea is to plan a change to a system of care,  do the plan, make measurements to study the results then act to change the system to get better results.  This is an ongoing process.  Congress seems to be mired in a system of management which is one hundred years out of date — if anything, that’s what needs to change first.

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