Tuesday, October 13, 2009

Fixing U.S. Healthcare

How do we fix the U.S. healthcare system? It's an issue that has sparked a great deal of emotion and debate among people for a variety of reasons. Perhaps the most important reason is that healthcare is an issue affects virtually every American in one way or another. If you have health issues, you care about the quality, cost and availability of treatment. If you don't have any current health issues, you care about how much it will affect your taxes and insurance premiums.

Another interesting angle in this debate is that it covers all facets of the issue from how to fix the system to whether or not it even needs fixing.

What is "Fixing?"

First of all, I think the term "fixing" needs to be eliminated from the issue. Healthcare is such a large and complex system that it is crazy to think it can ever be "fixed" - especially within a four-year term of an elected official. The problems run so deep and have become so ingrained that even if they could be fixed, the actions would be so drastic that they would create a shock wave that could bring the entire system crashing down.

The system needs to be improved on a continual basis - with a large number of relatively small steps so the improvements can become standardized and actually stick. Following a continual improvement approach will also assure that actions implemented result in improving the system instead of making things worse.

Unfortunately, the U.S. government does not work this way. The legislative process tends to be an all or nothing endeavor, and revisiting an issue that was addressed in a prior session of congress is looked at by the media and much of the public as a failure. . . which brings up another problem.

Fixing the healthcare system cannot be done solely by the government. It must include all stakeholders, including doctors, hospitals, insurance companies, drug producers, and most importantly, the consumers. Unfortunately, this makes the problem exponentially more complex and difficult to resolve.

What Needs to Happen

There are several components to an improved U.S. healthcare system. It is important to note that these are long-term steps - not short-term fixes, but if we start focusing on these things now, we should begin to have noticeable improvement within the next 10-20 years. It is not necessarily the American way to think that far ahead and take steps that will not bring immediate benefit, but a problem like this requires a drastic shift in thinking and it will take time.

The items listed below address the what more than the how of healthcare reform. The reasons for this include the importance of agreeing on what needs to happen before taking action and making changes. Also, some of these thoughts require a fundamental shift in thinking that will not happen overnight or through legislation. Thirdly, I'm desperately trying to keep this article short, as it could easily turn into a 1000+ page legislative document.

1. Eliminate Waste in Healthcare Processes

This involves adopting a lean (i.e., waste reduction) strategy for all facets of healthcare in order to reduce waste in processes and systems across the industry. Hospitals, insurance companies, Medicare, drug companies, testing labs, and medical practices should all learn about lean and how to apply it within their operations. It is generally accepted that a process that has not been analyzed for inefficiencies can consist of 85%-90% waste.

2. Eliminate Duplication in Testing Procedures & Equipment

There is an unbelievable amount of duplication within the healthcare industry which is expensive and adds very little value to the patient. As an example, there is an overcapacity of expensive diagnostic equipment in many hospitals. For competitive or status/ego reasons, neighboring hospitals may each purchase new test equipment instead of sharing unused capacity. This creates a need to use and pay for tests that may not be absolutely necessary in order to prevent the equipment from sitting idle.

3. Accept and Adopt More Alternative Treatments

A fundamental shift in thinking is necessary in the medical community, the U.S. government, and the public toward adopting more alternative treatments for patients. Many other nations, including Germany, are leading the way in the research and application of alternative medical treatments that cost much less and tend to result in fewer side effects for patients. This also involves providing accurate statistical information on the effectiveness of the various treatments so the patient can decide which procedure to accept.

It is strange to me that we refer to things like massage, acupuncture, and herbal remedies as "alternative," since many have been in use for much longer than "traditional" treatments.

4. Shift Focus from Reactive to Preventive Healthcare

The U.S. healthcare system is oriented toward disease rather than health. If we are going to reduce the cost of healthcare in this country, we absolutely need to shift the focus toward maintaining health instead of merely reacting when problems occur. We are overweight, overstressed, out of shape, and eat poorly - all of which lead to a slow deterioration of our health and increased need for expensive treatments and drugs. Without a fundamental shift toward preventive healthcare - meaning better nutrition, more exercise, reducing stress, and improving our level of personal happiness, we have no chance of ever significantly reducing the cost of healthcare.

This involves much more than regular physicals - since physicals are, after all, more detective than preventive. It involves things like replacing our donuts and fries with whole grains and vegetables.

The human body is a complex system, and like any system, optimization requires maintaining balance among all components. This is counter to our current system of focusing only on treating disease. We change the oil in our cars to prevent damage to the engine from occurring, but fail to follow a similar approach with our own bodies.

Okay, Let's Hear It

Being a highly emotional subject, I fully expect to receive more comments on this blog than from anything I have posted in the past. That's okay because, as someone once wrote, the more we disagree, the more chance there is that at least one of us is right. If we are to improve things in this country, however, we need more constructive - rather than divisive - debate.


Jeff Bucek said...

Well stated. I've read/heard a few other articles/interviews with people very familiar with how things work (or don't work) in Washington, and the common wisdom is that effective change will only come in steps as is stated in this article. The important thing is to get started and get past the divisiveness.

Peg Palmer said...

I agree with your points on health care. I think many of us are tremendously frustrated because Washington's approach to this is so off the mark. Tring to re-engineer the entire US health care system with one piece of huge, complicated legislation is a crazy approach. But it looks like they might just do it - and then it is likely that we'll have a real mess that will be even more difficult to clean up.

Although I agree with all your points, I would emphasize that the ready availability of data on what works, as well as how much it costs, would be powerful tools for consumers to select cost-effective courses of treatments and high value providers. This would in turn create a competitive environment where health care providers would be very motivated to improve their operations (eliminate waste, improve quality) in order to maintain and grow a profitable business. Transitioning to a system where we pay for treatment intervention for a specific health problem (e.g. knee surgery) or chronic care for a specific time period (e.g. one year of well-baby care) vs paying for each individual service would also discourage excess testing, etc. to absorb the excess equipment capacity.

I also believe that everyone should pay something toward their medical treatments. This would encourage people to look for the best value in healthcare because they have "skin" in the game. This could be true even for Medicaid or others receiving subsidized healthcare by funding a Health Savings Account that could be used to offset the cost of copays and other out-of-pocket expenses. The amount of the HSA funding could be based on the medical needs and income level of the recipient, so this is just a different way of splitting up their subsidy, not an overall increase or decrease.

Joe Jenney said...

Some years ago I was involved with a community group that addressed health care cost containment via process improvement. We worked with regional hospitals and those hospitals that worked with us demonstrated a significant reduction in the growth rate of costs.
So you are correct but we found many administrators didn't want to hear that 20% of their costs were waste. Same goes for electronic records. I am appalled at the excess cost in my local health care system but they don't see investment in software as a cost containment approach.