Tuesday, August 30, 2011

Fortune Cookie

What is the future of “Quality” in healthcare?  First, what is the meaning of “quality” in healthcare?  For most practical purposes, quality in healthcare means “doing what we say you should do” where the “we” means academics or organizations like NQF or AHRQ who pontificate on what should be done for the sick.  Certainly, there is not even a passive nod to what the customer wants.  Many argue about who the “customer” really is, or whether there is a “customer” in any meaningful sense in healthcare today. 

In the classic, historical sense, structuring your business to please customers would bring you more customers and take market share from competitors.  But that doesn’t happen in healthcare, at least not if you view the patient as a customer.  There is no competition for patients.  No hospital goes out of business and no doctor’s office closes because the office down the street provided better or cheaper service.  Even where the service areas for hospitals overlap, there is no price competition, because everyone gets the same price.  [That may not be strictly true, but it’s too complicated for a short article.  Just pretend for now.]

So, here comes ASQ with advice on how to do things better, faster, and cheaper, and guess what?  No one’s interested.  They’re not interested, because it doesn’t get you anything.  It’s not clear that the patient makes the purchase decision in most cases, but even where there is a choice, it’s not made on price.  It’s even against the law to offer discounts or forgive the co-pay for patients. 

That may be a bit harsh.  There are metrics that patients neither understand nor appreciate, but standard techniques from ASQ can help a hospital demonstrate compliance.  And passing muster on enough of those can get you a slightly higher reimbursement from some third parties.  But not more patients or a larger market share.  The bottom line is that doing well does not provide a competitive advantage in healthcare.

Is there a future for better, faster, cheaper?  Let’s hope so.  The biggest problem today with U.S. healthcare is that it costs too much.  Healthcare services in this country are too expensive—more so than any other country in the world.  We pay our doctors more, and we utilize expensive gee-whiz technology more than anyone else.  Somehow, that has to stop.  In a truly competitive environment, it’s possible to provide the same product/service today at a lower price than yesterday but still make as much money as you did yesterday.  However, the only reason you would do this is that someone else is doing it and will put you out of business if you don’t match their price.  Process improvement tools from ASQ could help, but only when the healthcare industry is prepared to use them.

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