Thursday, April 26, 2007

Convergence II

Those who would like to understand why information technology has had so little impact on the cost and quality of health care can get a clue by reading the Convergence II section of the chapter entitled The Triple Convergence in Thomas L. Friedman’s best-selling book The World is Flat.

I ignored the book for a time because of my annoyance with Mr. Friedman for being an apologist for the War in Iraq when I thought he knew better. But when it stayed on the best seller list for two years, and when people I respect continued to recommend it to me, I swallowed my bile and bought a copy. I’m glad I did.

Convergence II is based on the principle that, in Friedman’s words “introducing a new technology….is never enough to boost productivity. The big spurts in productivity come when a new technology….is combined with new ways of doing business….” He cites a number of examples to support his point.

In other words, as long as doctors and nurses and hospitals continue to do what they have always done in the ways that they have always done it, adding computers to the mix doesn’t help much and can even make things worse.

So if information technology is to play a useful role in the reform and redesign of our health care system, health care leaders have to imagine the new and more efficient ways of providing care that computers make possible and then overcome the barriers that stand in the way of implementing them, including the entrenched culture of health care, its professional guild system, and public support of both.

Tuesday, April 17, 2007

Replacing Fee-for-Service

Any serious effort to reform or redesign the health care system will have to include doing something about the fee-for-service system of financing.

Under fee-for-service, providers get paid separately for each service element; i.e., so much for this lab test, so much for that x-ray, so much for the use of the operating room, so much for a physician office visit, and so on.

The system creates a host of problems. For one, it rewards providers who provide more services rather than less, thereby discouraging any exercise of judgment as to whether the value of the service bears any relationship to its cost. Another is that it fortifies the costly guild system that dominates health care by limiting payment for specific services to particular specialties. Because the amount of payment for a service bears no necessary relationship to the cost of providing it, entrepreneurs are encouraged to set up specialty houses that offer only the services for which payment is generous, thus further fragmenting the delivery system.

In an editorial that appeared in the April 9 issue of Modern Healthcare, Todd Sloane discussed the problem in the context of angioplasty. Recent studies indicate that this expensive procedure is no more effective than much less costly drug therapy. But many doctors who provide lucrative angioplasties continue to defend them.

Sloane calls for someone to fix this faulty system, but like most critics does not offer any suggestions on what ought to be done.

Well, I have one. It is called global capitation. Under global capitation, the patient signs up with a provider organization like Kaiser or the Mayo Clinic, which is paid a fixed amount per month to provide whatever care the patient needs. That rewards providers who find more efficient ways to provide care instead of those who figure out how to maximize revenue.

Global capitation was tried in the 1990’s and although it was effective in controlling cost, people didn’t like it because it restricted their choice of hospitals and physicians. Also, provider organizations still left medical decisions in the hands of individual physicians instead of improving efficiency by managing care, which the system expected them to do.

But times have changed and I think it deserves another try.

And if not that, what?

Monday, April 16, 2007

A Shift of Leadership

The leadership role in the provision of health care services continues its shift from the medical profession to hospitals.

Evidence appeared in the April 15 Boston Sunday Globe under the byline of veteran medical reporter Christopher Rowland whose article described the growing demand of medical specialists to be paid by hospitals for providing “on-call” coverage in emergency rooms.

Historically, doing “on-call” was considered to be partly an obligation associated with hospital admitting privileges and partly a professional obligation to make sure that physician services were available for emergencies whenever the need might arise.

Now it seems that physicians no longer see it that way and will be providing on-call coverage more as an agent of the hospital than as a representative of their profession.

In the article, the President of the Massachusetts Medical Society was quoted as saying “I think it’s unfortunate that we have gone in this direction.” The head of emergency medicine for Boston-based Caritas Christi Health Care said “Ethically, morally, and professionally, we as physicians have a responsibility. Part of our service to our community and to humanity is to provide the on-call service.”

The senior vice president of policy at the American Hospital Association said “We traditionally in healthcare have relied on voluntary arrangements between hospitals and physicians” and that the breakdown of that system “is tearing at the very core of healthcare.”

All of this is a necessary, inevitable, and overdue part of the ongoing redesign of our health care system. It would be better if we could see it that way rather than as something to be regretted, but either way it is going to happen.

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