There are anecdotal reports of savings in the 20% range from process improvements in various service industries, so a figure in this range for healthcare is easily believed. But 70%? As they say, “it’s complicated.” Depends on your definition of waste. For some, waste means waiting too long or taking to long to accomplish a task. Spending more time or money than necessary in the performance of delivering healthcare. If a surgery center can do a new tubal ligation every 30 minutes, why does it take a hospital 45 minutes?
For others, waste in healthcare means providing more healthcare than they think you need. Waste is not so much in the care process but in the decision to provide the care at all. The National Patient Safety Task Force is the embodiment of this approach in the US as is the NICE commission in England. The recent article questioning the value of mammograms falls in this category as does the debate over a PSA blood test for prostate cancer. These people are looking at the health of populations, not individuals. If we cut back on mammograms, and the death rate from breast cancer goes up a bit, well, maybe that’s OK. There is a legitimate question of how much money we should spend for a life saved? We have become very accustomed to calling 911 in the event of a sudden medical emergency, but that system is not universal in the world outside the US.
Notice that the patient or customer does not appear in either of the above discussions. In fact, there is considerable debate over where the patient fits in this equation. He doesn’t make the purchase decision, and he doesn’t pay for the service. So, if the patient is unhappy, is that waste? If a quality professional devised a way to prevent this unhappiness, would the hospital be interested? Would solving this problem do anything positive for the provider’s bottom line?
A few weeks ago, I took my aging truck to the Toyota dealer to fix a rattle that I diagnosed as a rotting exhaust system. They installed a clamp and declared the problem solved. It wasn’t. They had failed to notice that the exhaust system distal to the clamp was not really attached to anything. Another visit (and $1,000) finally fixed the problem. But was this waste? The dealer got paid for everything he did, and spent little/no added time. In fact, he denied there was a problem.
“You needed the clamp anyway.”
He lost a customer, but his process for fixing vehicles is unchanged. For now, he’s busy enough to ignore my interests. Just like healthcare.
If hospital A became more efficient, would anyone notice? Would they gain market share at the expense of hospital B? No. For two reasons:
- If they found a way to do, let’s say, total hips for half the cost, they’d still charge the same amount. That’s what insurance companies pay, so why charge less?
- Chance are, there is no hospital B. Hospitals in the US are micro-monopolies and don’t compete for patients--at least not on the basis of cost.