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Tuesday, August 18, 2009

Efficiencies That Cost More

Early in my hospital administration career I came to the conclusion that whatever I undertook to do to improve efficiency always cost more money.

People would come to me with programs they wanted to mount or changes they wanted to make and often would defend their ideas at least partly on the grounds that they would improve efficiency. But when we got down to details, it seemed always to turn out that in order to implement the proposal, the budget would have to be increased.

The principle seems to be alive and well. The Op-Ed page of last Saturday’s issue of The Boston Globe consisted of five columns on the subject Massachusetts health reform: What’s next? The authors were local health care leaders.

A common theme was that cost control was the next priority now that the number of uninsured had been greatly reduced. A number of suggestions were made. They included fixing ”the dysfunctional Medicare payment system” to spare physicians from “devastating fee cuts,” making sure that global rates “adequately reflect the fact that some organized systems will have sicker patients,” adequately funding primary care teams, implementing a “fee-for-results payment system,” and “ending chronic underpayment for care within the Medicaid system.”

So far as I can tell, all of those would cost more money. The author promoting primary care teams openly conceded as much.

All of that makes me skeptical about cost control measures that are being suggested from outside the delivery system, such as healthy lifestyles, early diagnosis, clinical effectiveness research, and expanded use of computers.

If we are going to get serious about cost control, we don’t need proposals that vaguely promise efficiencies. We need ones that that specify where, how and when savings will be realized and who will be responsible for making them happen.

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