Monday, January 30, 2012

Getting Health Care Providers to Reduce Cost 

During a recent conversation about the health care situation, a physician friend said that he could not remember ever ordering a test or making any other medical decision for the purpose of increasing his income.  Knowing him to be an honorable, conscientious person, I said that I believed him but then went on to ask whether he could remember ever having looked back over the previous week or month and asking himself whether there was anything he had done that might have been done less expensively without compromising care.  He couldn’t remember ever having done that. 

His answer didn’t surprise me.  Why should he spend time or energy considering possibilities that would benefit neither him nor his patients? 

The lesson here is that our health care providers have never seriously pursued cost reduction because they have never had any reason to.  That is partly due to the fee-for-service system, under which the more you do the greater your income.  It is also due in part, I think, to the general fear on the part of the public that the cost of care might be reduced by not providing needed services or by reducing quality. 

I am convinced that only the providers of health care have the ability to find ways to reduce cost while maintaining quality.  But they won’t do it until they need to.

Saturday, January 14, 2012

Get Over It!! 

There is a cartoon called Non Sequitur that appears regularly on newspaper comic pages. 

The one I saw in the January 9 edition of the Omaha World Herald showed six grim reapers, complete with scythes, sitting around a table with stacks of paper in front of them.  The cartoon was labeled “The HMO Review Board” and there was a bulletin board on the wall with the words “Days without accidentally approving a claim” and topped by the number 12795. 

 (In the unlikely event someone doesn’t know what an HMO is, it is an organization that is obligated to provide all the services a person needs in return for a predetermined, prepaid, fixed monthly payment.)  The cartoon reflected the common caricature of HMO’s as money grubbers that grow their profits by refusing to pay for the medical care their subscribers need. 

HMO’s do engage in something called utilization management and undoubtedly there are unscrupulous operators who abuse the system.  But that does not obviate the need for somebody to monitor providers that are known to provide unnecessary services and to exercise judgment in deciding whether the benefits of an expensive test or treatment bear a reasonable relationship to the cost involved. 

Given that we can now see the day when health care represents 20 per cent of the economy and is a threat to economic stability, we can no longer afford the traditional notion that when it comes to health care, money doesn’t matter. 

So for those who get upset at the idea that cost considerations are playing a part in medical decisions, I have this advice:  get over it.

Wednesday, January 04, 2012

Who are the Hospital’s Customers? 

Savvy hospital administrators have regularly maintained the public position that the institutions they managed were devoted to serving the needs of their patients. 

But the successful ones knew that their real customers were the doctors who brought the patients. 

That situation arose from the phenomenon and role of private medical practice.  Hospitals as institutions do not have the ability on their own to admit patients.  Only doctors can do that.  So for the typical community hospital, the number of patients it serves has been totally dependent on the number of doctors who make up its medical staff and the size of their practices. 

Recently, hospitals have become more and more brazen in their attempts to recruit private practice physicians to their staffs.  In the Boston area, the upstart and aggressive for-profit Steward hospital organization made recent news by enticing the 150-doctor Whittier Independent Practice Association away from the Beth Israel Deaconess Medical Center (Boston Globe, November 10).   Also, the Money section of the December 14 edition of USA Today had a story about hospitals that had hired sales representatives to woo doctors away from other hospitals.  It seems safe to assume that these hospitals see doctors as their customers. 

That is changing to some extent as patients increasingly select their doctors on the basis of their hospital affiliation.  The emergence of so-called Accountable Care Organizations has the potential of changing it further.  As hospitals and physicians consolidate into single, unified organizations, physicians will take on the role of staff members rather than of independent practitioners.  “Wooing” doctors as a means of getting their patients will become a thing of the past.  The responsibility for attracting patients will become more a corporate one rather than one of independent doctors or physician groups. 

An indication of this change is the growth of hospital advertising, which is directed towards patients, not towards doctors. 

During the heyday of managed care in the 1990’s, insurance companies controlled where their subscribers got care and thus became “customers” of the hospitals.  But people didn’t like that and the practice largely disappeared. 

It may return in some form, but in the meantime hospitals may come to really see patients as their customers, as they have been claiming all the time.

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