Monday, November 8, 2010

Passion in November

In his November blog for ASQ, Paul Borawski talks about the passion of "members of the quality community" and business leaders who have seen principles of quality managaement improve their products and services . . . and their bottom line.  One thing many in the healthcare arena don't recognize, however, is that quality is not a goal in and of itself.  One doesn't improve quality and then say "mission accomplished."  The tools and techniques of quality management are just that--tools to be used in the attainment of another goal.  The biggest problem with U.S. healthcare today (and yesterday) is that it costs too much.  Yes, we do sometimes provide too much care, and if patients took better care of themselves, they wouldn't need so much care.  But at the end of the day, individual healthcare services just cost too much.  It doesn't have to be so.  The tools and techniques in the quality toolkit can be used to reduce costs, but this has not been done in healthcare.  True, there are examples of using LEAN or other tools to make healthcare processes more efficient, but in no case has this reduced the cost of a healthcare service.  Indeed it shouldn't, because the reimbursement structure is such that no institution would charge less than insurance is willing to pay.  Imagine, however, if there were price competition in healthcare.  If you don't reduce the price you charge, you will lose market share.  Now, quality becomes a very important tool for competing in a regional market.  If you want to perform total hip replacements, you will have to find a way to do them cheaper than your competitor and to make money doing that.  Quality to the rescue.

To some extent, I think those in the academic healthcare quality community are responsible for this failure.  They have used "quality" to avoid focusing on the true goal of reducing cost.  Who could be against a focus on quality healthcare?  But ask that question again after you define quality healthcare as the same service at a lower cost.  We could use quality tools to bend the curve on healthcare costs if institutions had the motivation to do so.  It is possible.  Many industries have done exactly that, and healthcare could also.

AHRQ denies that cost is a factor in efficiency in healthcare.  The Institute of Medicine listed efficiency as one of the aims but then denied that cost was a factor in their definition.  The NQF convened a panel on efficiency in healthcare but announced at the beginning that they would not talk about cost.  (Now THERE's a feat of showmanship!)  The great fear, of course, is that price competition would reduce physician or institutional income.  Initially, this might be true, but eventually, the more efficient use of time and resources would improve the bottom line for everyone.  If you read deeply in the "Medical Home" literature, you eventually see that this is a way to improve the productivity of family practice offices.  Physicians spend their time doing things only they can do, while others perform tasks they are specifically trained to do.

Most of healthcare today is a commodity.  Generally, when products and services become commodities, the price comes down.  This has not happened in healthcare, partly because of the interjection of third parties into the purchase decision--payment process, and partly because of the monopoly that most most hospitals hold in their communities.

Once there is motivation to improve healthcare, the quality community will be ready with tools and the passion to reduce cost or move toward whateve new goal comes up.


  1. RobertG ~ Congratulations on this fine medical economics blog. I agree...improvement in quality will never result in 'mission accomplished.' the deficit [if I may call it that] in your piece, is the manner in which you choose not to address how many people this industry continues to irreparably injure or kill. In truth, we'll never be able to say 'mission accomplished' in this industry - but we won't get far down the road of positive, sustainable change if we don't have an eye on the cost of providing this commodity and an eye on the quality with which we provide it.

  2. Yes, Roy, patient safety is subject we must never forget and always improve. However, the biggest problem today is cost. Too many pundits deflect talk away from cost by invoking "quality," whatever that means. We can reduce the cost of our services. First, however, we need a reason to do so.