Healthcare costs in the United States are rising faster than economic growth, making it unaffordable for an increasing proportion of the population. The problem is compounded by the aging population, the healthy opting out of insurance thereby increasing costs for those insured, and the fee-for-service model. As a result of this problem, the following symptoms have emerged: lack of easy access for patients needing care; lack of awareness (patients not adapting healthy lifestyles; providers not having access to complete patient information); lack of resources (for example: not having an adequate patient to provider ratio); proliferation of wastes (in Lean we talk of nine wastes such as waiting, transportation, mis-utilization of skills, providing excess care, providing under care, etc.); and variation (between regions, between hospitals, among providers, etc.).
Some Strategic Imperatives for Healthcare in the Future
My suggested solutions to this problem are the following. While this is not an exhaustive list, it provides a good starting point to ensure high quality care, with excellent outcomes designed and delivered to the citizens of the country at affordable costs:
- Elimination of waste: Value is defined by the customer of the process or service. Healthcare should pursue eliminating wastes in the process using simple tools such as Lean, 5S and more advanced methodologies such as Six Sigma and Theory of Constraints subsequently.
- Payment should be based on value over the period of time rather than the fee for service model. The value model will empower and enable partnership between the provider and the patient and will reward adoption of a healthy life style and reduce costs in the long run, while improving the quality and outcomes.
- Economies of scale: Instead of having several facilities that offer similar services in the same geographical area (and thus leading to inefficient use of resources), healthcare should develop models such as focused factories that can do high volume cases at lower costs and higher quality. One example is Shouldice Hospital in Canada, which only does hernia repairs, but has a very standardized process with excellent results. Another example is the Hridayala Hospital, India, which specializes in heart surgery and is planning to build a hospital in the Cayman Islands (WSJ Nov 21, 2009).
- Solution shops: Solution shops by their very definition are healthcare providers that are geared toward treating complex or emerging health issues where treatments are complex. Reimbursements for these treatments involving solution shops should be based on fee-for-service model as it requires expertise and custom diagnosis and treatments.
- Innovation: Organizations including government should foster innovation that simplifies complex diagnoses and increases the precision and accuracy of the diagnosis. The goal should be to move "treatments" from solution shops to focused factories to increase value (see points 2 and 4).
- Harness the power of technology: For example, empower the patients with easy access to health information, transferability, enable seamless interface and integration and between patients and providers. This technology enabled facilitated network should help transfer of information on demand, in real time, among patients, providers and support network of hospitals, pharmacy, researchers, etc.
- Role of Government: Government should make healthcare a fundamental right for every citizen in the country. In addition, it should promote companies and research (NIH, FDA) that deliver "precise medicine" and "personalized medicine." It should facilitate standardization and ensure equal and easy access. Government should ensure safety of treatments while accelerating the time (of the products) to the market and should foster competition to keep prices down.
How Can We Be Part of the Healthcare Solution?
In a recent policy statement, the Joint Commission* stated, "It has become common wisdom that 30 to 40 cents of each health care dollar is wasted, that is, spent on no-value-added activities; whether or not that wisdom is valid, it is a fact that the proportion of the U.S. Gross Domestic Product (GDP) devoted to health care spending is 50 percent greater than in any other country and growing, without any evidence that health care in this country is better. In fact, healthcare outcomes in the United States lag those of other countries that spend proportionately less on health care." This translates to over a trillion dollars wasted each year.
Let us start the new year and the next decade looking at the variations in the care delivered in our hospitals, in our departments, in our counties; the medical errors that lead to harm and suffering to our patients, the mis-utilization of the resources taking the health care provider away from providing care, the overuse of care (for example, treating viral infections with antibiotics) and underuse of care (not managing chronic diseases such as diabetes and blood pressure). We have simple tools such as 5S, spaghetti maps, check sheets for tackling simple problems and some sophisticated know-how such as analysis of variance, Design of Experiments to systematically solve the problems and sustain the gains. Let us share our expertise and know-how to make healthcare affordable to all.
Reference
http://www.jointcommission.org/publicpolicy/efficiency_waste_reduction.htm, Accessed 12/5/09.