Thursday, June 04, 2009

Is [G]overnment [M]edicine next?

From today's Boston Globe:

In a detailed two-page letter to key senators released yesterday, the president wrote that he wants to "fully offset the cost of healthcare reform" by cutting an additional $200 billion to $300 billion from Medicare and Medicaid over the next decade, on top of the $309 billion reduction he has already proposed in the government's two main healthcare programs for the poor, elderly, and disabled. (I have provided the embedded link to the actual letter.)

I'm trying to give this a fair shake and not jump to conclusions, because the motivation is noble. The question is whether this is real cost-cutting, or appropriation cutting. If you just cut appropriations, you just dumb down health care. You get to cost-saving by reducing medical errors and harm to patients and by engaging in the kind of continuous process improvement that has been found in the most successful firms in other industries. See Steve Spear's comments on this. The items mentioned in the letter sound rather more like administrative efforts to avoid government payments than a recognition that the medical field remains a cottage industry at the actual level of care delivery. Creation of "accountable care organizations" could result in an agglomeration of inefficient hospitals and other providers, a step that could also cement in the benefits to those institutions that are already part of large systems with more market power. You do not want to create the medical equivalent of "Government Motors." Careful, here, folks.

Meanwhile, hospitals, do you see the hand-writing on the wall? Academic medical centers have the most to lose here: There is no natural constituency in Congress to provide high levels of support for graduate medical education to these high-cost hospitals. While there is a community hospital in every Congressional district, academic medical centers are much fewer in number and concentrated in just a few districts. Count the votes.


steven spear said...

American's pay to much for health care--one dollar out of seven for the economy as a whole--and get far too little in return--poor access, high costs, fragmented care, and horrendous risks of avoidable injury and harm. Government policy that shifts the needle on how much gets spent (more or less than the current $2.2 trillion) or who pays--tax payers or employers--does nothing to get us to a better place: Far better care, for many more people, at sharply _reduced_ cost.

That such an objective is achievable is without doubt. The basic problem is that care delivery is managed inappropriately. When medical science and technology were simple (and none too competent) it was sufficient to manage by specialty and field. After all, there were few of those and the heavy lifting was in pushing the boundaries of knowledge.

Today, however, the challenge is integrating various specialties--oncology, radiation oncology, oncology pharmacy, oncology nursing, reconstructive surgery, rehabilitative therapy, anesthesiology, nutrition, and so forth for treating cancer, for instance--into processes capable of delivering exceptional value on a patient by patient basis.

Those few pioneers on the vanguard of practicing process excellence have shown how to pursue perfect patient care--no falls, slips, nosocomial infections, mismedications, wrong side surgery, delays, readmissions, and so forth.

And pursuing perfection did not add cost, it liberated cost. Harm done to patients was due to broken processes and systems, but once fixed those processes and systems were not only safe--to patients and staff alike, they were effective--the right care delivered to the right person in the right way, and they were efficient--lots off great care for much less cost.

For policy to be effective, it must be directed then towards unleashing the potential value in the health care system now squandered to unreliable delivery systems.

1A: Declare 'zero' as the goal. Challenge every hospital president and clinic director to reduce the injury count to zero in a year. It has been done elsewhere, not doing so is negligent.

1B: Insist that performance measures be developed across the board. Just how good is such and such a place at knee repair, chronic illness management, and so forth.

2: Publicize those who have achieved great outcomes. Just as it takes 'transparency,' the availability of useful information, to diagnosis patients, and solve system problems, so too it will take transparency for payers and patients to know where their chances are best and their costs are least.

3: Allow choice: Let payers and patients decide which providers to use based on the measured quality of the care they provide and the cost to the payer/patient of providing that care.

Perfect care as the goal, transparency about who is moving faster in that direction and who is not, and freedom to choose the proven best providers will mean great providers (super quality at less cost) will be rewarded and lousy ones (poor quality at high cost) will be punished.

The net effect will be far more, much better care to many more Americans at a small portion of the current burden.

Steve Spear
Senior Lecturer, MIT
Senior Fellow, IHI
Author: Chasing the Rabbit: How Market Leaders Outdistance the Competition

Susan said...

Thank you, Mr. Spear for your thoughtful and insightful commentary.