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Recommended posts: Management Improvement in Healthcare - Improving Hospitals Documentary - Going Lean in Health Care - USA Health Care Costs reach 15.3% of GDP
Related: Healthcare management improvement portal - healthcare improvement articles
Business Week has a good article on the strides one hospital has been able to make at reducing costs and improving quality. Hospitals: Radical Cost Surgery
The crazy world of hospital economics does not offer a lot of incentives to change. Both Medicare and private insurers reimburse on a piecework basis – known as fee-for-service – that encourages hospitals to treat more, prescribe more, and test more.
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Providence has also published data showing that infections, lengths of stay, and surgical complications have dropped since starting its own program.
But hospitalists are still controversial in many communities, because primary care physicians are wary of giving up control of their patients, along with their share of inpatient fees. Dr. Joanne C. Roberts, one of the first hospitalists at Providence, has not seen this conflict in Everett, possibly because most of the hospitalists and primary care doctors are associates at one large medical practice, Everett Clinic. That’s not true everywhere, she says. “In another community where I worked, independent doctors were pretty hostile. Everyone was trying to grab part of the money. That just doesn’t happen here.”
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In a study of 2,531 operations at Providence, Brevig reported that the incidence of transfusions was reduced to just 18% in 2007, from 43% in 2003, while the average patient stay was reduced by half a day. The changes have saved Providence an estimated $4.5 million.
Brevig has been proselytizing for his plasma practices at medical meetings, but to little avail. Only some 200 U.S. hospitals have a blood conservation program. Since patients are billed the cost of the plasma, doctors aren’t motivated to change their habits.
There are many more great examples of positive actions being taken in health care. But all you have to do is look at the overwhelming evidence of how amazingly poorly the health care system in the United States is doing to know that it is, overall, an enormous failure. For decades the enormous cost of supporting special interest groups that benefit from the current broken system have forced the rest of society to pay for their unwillingness to improve. We can no longer afford to accept the poor performance. We need to adopt the new ideas much more quickly and eliminate the taxes on the rest of society to support those that want to take an every increasing amount from society to support their outdated, failed policies.
Related: Community Medical Care Successes – CEOs Want Health-Care Reform – USA Spends Record $2.3 trillion ($7,681 Per Person) on Health Care in 2008 – Health Care: Lessons for the USA from Switzerland
There are many significant problems with the medical care system in the USA. It makes sense that a system that costs over 50% more than other countries and has no better outcomes, from all that extra spending, suffers from many failures. Coverage for small business is one of the problems we face now – When Health Insurers Dump Small Companies:
Just from an insurance perspective the companies are not providing what is needed. They are quick to say you can’t have healthy people remain uncovered and wait to buy insurance once for example, “their house is on fire” (they are sick). They are right. Well you also can’t have the insurance company cancel coverage during the fire and have a system that works.
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Robert Lloyd, PhD From the IHI Open School’s, presents a nice overview of the PDSA Cycle (plan-do-study-act). The webcast includes an example of using PDSA to improve the discharge process for a hospital.
As I have said many times the keys to success are to turn the PDSA cycle rapidly, predict the results in advance, and analyze the results to continually improve. the Improvement Handbook is an excellent resource.
The IHI Open School is a great resource and exactly the type of thing organizations with a mission to improve performance should be doing. Provide resources online that are easy for people to access and then apply in their organization. See more management webcasts.
Related: Tom Nolan on PDSA – Saving Lives: US Health Care Improvement – 5 Million Lives Campaign
The system is responsible for 90, 92, 94, 97% of problems – W. Edwards Deming. Fix the system, don’t blame the people. When you seek system fixes you approach situations differently than if you search for people to blame.
By the way, I am often asked about the data supporting Deming’s contention that the system was responsible for 97% of the problems. This statement was not based on a set of data but on Dr. Deming’s decades of experience. And he increased the percentage over time – as he learned more.
Roads that are designed to kill
One of the ways they began to protect people was to put barriers down the center of two-lane roads. They showed that this could be done cheaply. When Mylar – a strong polyester film – is supported by closely spaced plastic poles, it can keep cars from crossing the median. When the Swedes used this type of center barrier to separate the traffic going in opposite directions, they effectively prevented head-on collisions and the death rate on these roads fell by 70 percent to 80 percent.
Global health research shows more improvements can save lives. For example, Ghana put in rumble strips – small bumps spaced closely together – across all the roads leading into the capital city of Accra, reducing fatalities by 35 percent. Research has shown that speed bumps on roads are one of the “best buys” in all of global health.
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Most people think we are doing all that can be done to keep our roads safe. They are wrong. Road traffic injuries kill more than a million people a year worldwide, including 40,000 a year in the United States.
Is a situation killing 40,000 people in the USA a year a health care issue? It sure seems to me it would be. It probably isn’t a disease management issue though (some might try to say bad roads are a disease but I wouldn’t say that). I think this is one, of many examples, that shows that we have a disease and injury management system not a health care system (in addition to illustrating systems thinking, effective root cause analysis, PDSA, innovation, respect for people…).
Related: Find the Root Cause Instead of the Person to Blame – Traffic Congestion and a Non-Solution – Checklists Save Lives – Saving Lives: US Health Care Improvement – The Economic Benefits of Walkable Communities – SWAT Raid Signs of Systemic Failures – System Improvement to Respond to the Dynamics of Crowd Disasters – The Leading Causes of Death
The Cost Conundrum by Atul Gawande, New Yorker (The Power of a Checklist was published there in 2007 by the same author)
“I’ll be there,” the cardiologist said. Fifteen minutes later, he was. They mulled over everything together. The cardiologist adjusted a medication, and said that no further testing was needed. He cleared the patient for surgery, and the operating room gave her a slot the next day.
The whole interaction was astonishing to me. Just having the cardiologist pop down to see the patient with the surgeon would be unimaginable at my hospital. The time required wouldn’t pay. The time required just to organize the system wouldn’t pay.
The core tenet of the Mayo Clinic is “The needs of the patient come first”—not the convenience of the doctors, not their revenues. The doctors and nurses, and even the janitors, sat in meetings almost weekly, working on ideas to make the service and the care better, not to get more money out of patients. I asked Cortese how the Mayo Clinic made this possible.
“It’s not easy,” he said. But decades ago Mayo recognized that the first thing it needed to do was eliminate the financial barriers. It pooled all the money the doctors and the hospital system received and began paying everyone a salary, so that the doctors’ goal in patient care couldn’t be increasing their income. Mayo promoted leaders who focussed first on what was best for patients, and then on how to make this financially possible.
No one there actually intends to do fewer expensive scans and procedures than is done elsewhere in the country. The aim is to raise quality and to help doctors and other staff members work as a team. But, almost by happenstance, the result has been lower costs. [actually the Deming Chain Reaction] (more…)
Decades ago Dr. Deming emphasized the deadly disease of excessive health care costs in the USA. Since then, year after year, the situation has become worse (reaching $2.2 trillion in spending in 2007 – 16.2% of GDP). During that time senior executives has put forth very little serious effort (in comparison to the huge cost) to fix this problem. Finally, in the last few years, more and more senior executives are actively moving to address the ever worsening crisis (including, Howard Schultz, CEO at Starbucks).
They seem to be realizing that hoping the problem will just fix itself is not a great strategy. Finally senior executives are realizing they need to have the government address the systemic failures. Those executives need to keep up their efforts because those seeking to retain the system that doesn’t work, because they personally benefit from it, have been doing a great job of preventing progress for decades. Until a critical mass of senior executives demand change from Washington the chance of improving the relative performance of the USA health system in comparison to other countries is very bleak (we have just been getting more expensive and less effective [relative to other countries] over time).
CEOs Secretly Want Health-Care Reform
Related: Many Experts Say Health-Care System Inefficient, Wasteful – Articles on Improving the Healthcare system – Applying Disruptive Thinking to the Healthcare Crisis – Our Failed Health-care System
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Health spending in the United States grew 6.1 percent in 2007, to $2.2 trillion or $7,421 per person.
For comparison the total GDP per person in China is $6,100. This continues the trend of health care spending taking an every increasing portion of the economic output (the economy grew by 4.8 percent in 2007). This brings health care spending to 16.2% of GDP (which is yet another, in a string of record high percentages of GDP spent on health care). In 2003 the total health care spending was 15.3 of GDP.
With the exception of prescription drugs (which grew at 1.4% in 2007, compared to the 3.5% in 2006), spending for most other health care services grew at about the same rate or faster than in 2006. Hospital spending, which accounts for about 30 percent of total health care spending, grew 7.3 percent in 2007, compared to 6.9 percent in 2006.
Spending growth for both nursing home and home health services accelerated in 2007 (4.8% v. 4.0%). Spending growth for freestanding home health care services increased to 11.3 percent. Total health care spending by public programs, such as Medicare and Medicaid, grew 6.4% in 2007 v. 8.2% in 2006. In comparison, health care spending by private sources grew 5.8% compared to 5.4%.
Private health insurance premiums grew 6.0 percent in 2007, the same rate as in 2006. Out-of-pocket spending grew 5.3 percent in 2007, an acceleration from 3.3 percent growth in 2006. Out-of-pocket spending accounted for 12.0 percent of national health spending in 2007. This share has been steadily declining both recently and over the long-run; in 1998, it accounted for 14.7 percent of health spending and, in 1968, out-of-pocket spending accounted for 34.8 percent of all health spending.
The costs for health services and supplies for 2007 were distributed among businesses (25%), households (31%), other private sponsors (4%), and governments (40%).
Decades ago Dr. Deming included excessive health care costs as one of the seven deadly diseases of western management. We have only seen the problem get worse. Finally it seems that a significant number of people are in agreement that the system is broken. Still, admitting the system is broken is not the same as agreeing on how to fix it. The way forward to workable solutions still seems very difficult.
Full press release from the United States Department of Health and Human Services.
Related: Many Experts Say Health-Care System Inefficient, Wasteful – International Health Care System Performance – USA Paying More for Health Care – Health Insurance Premiums Soar Again – PBS Documentary on Improving Hospitals
The popular ER TV show highlighted the importance of using checklists in surgery yesterday.
Such powerful quality tools, like the checklist, are just waiting to be used. But far too many fail to use these simple improvement tools. And in health care those failures are potentially critical.
Related: Checklists Save Lives – The Power of a Checklist – management improvement dictionary – Articles on Improving the Health Care System
The Innovator’s Prescription: A Disruptive Solution to the Healthcare Crisis
The push for widespread healthcare reform must come from employers, who in spite of their declared intent to cut healthcare costs also know “they profit when their employees are healthy and productive.” Affordable healthcare, he concludes, “doesn’t come by expecting high end, expensive institutions or expensive caregivers to become cheap, but by bringing technology to lower cost providers and venues of care, so they can become more capable.”
Clayton Christensen is the rare management thinker that I feel real provides profound insights into thinking about management. There are many other good management thinkers that offer valuable idea, just most of them (in my opinion) really are presenting material in ways that offer managers a good way to take action on all the long known good management ideas that we fail to adopt successful for decades.
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Checklists are a simple quality tool that have been used widely for decades. Pilots use them, without fail, to save lives. Some surgeons have been using them and the evidence is mounting that checklists can save many more lives if more in health care use them. Studies Show Surgeons Could Save Lives, $20B by Using Checklists
If all hospitals used the same checklist, they could save tens of thousands of lives and $20 billion in medical costs each year, says author Atul Gawande, a surgeon and associate professor at the Harvard School of Public Health.
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In his study, which was funded by the World Health Organization, hospitals reduced their rate of death after surgery from 1.5% to 0.8%. They also trimmed the number of complications from 11% to 7%.
The study shows that an operation’s success depends far more on teamwork and clear communication than the brilliance of individual doctors, says co-author Alex Haynes, also of Harvard. And that’s good news, he says, because it means hospitals everywhere can improve.
Researchers modeled the checklist, which takes only two minutes to go through, after ones used by the aviation industry, which has dramatically reduced the number of crashes in recent years.
This is more great evidence of the value of applying simple management tools that are already well known. The idea that improvement takes brand new breakthrough ideas is just plain wrong.
Related: Using Books to Ignite Improvement – The Power of a Checklist – New, Different, Better – Management Improvement History and Health Care – Open Source Management Terms – Fast Company Interview with Jeff Immelt
The Ergonomics of Innovation by Hayagreeva Rao and Robert Sutton
Related: Saving Lives: US Health Care Improvement – 5 Million Lives Campaign – PBS Documentary: Improving Hospitals – Hospital Reform – IHI on CBS – Articles on Improving Health Care Performance – Drug Prices in the USA – posts on innovation
The bad idea behind our failed health-care system by Malcolm Gladwell
This is another article with an interesting take on the problems with the broken health care system in the USA. I don’t totally agree with the conclusion. I think the failure of the system and refusal to make substantial change have multiple causes including: smart lobbyists paying politicians lots of money to support their interest in keeping the current system, people being fearful about change, false perceptions about the system performance (thankfully an understanding of the poor performance is becoming more widespread recently), that the system works least poorly for the wealthy who have more influence than those without insurance, that the benefits of spending huge amounts today are going to specific companies and people and thus are available for buying political support (not just paying politicians but also funding marketing campaigns, experts to provide journalists the position of those in favor of the existing system…) while the benefits of changing are much more distributed. Luckily companies are increasingly – decades after Deming noted this health care costs are a huge problem for companies in the USA – focusing on the need for improving what is often one of the largest expenses for companies. The issue many fail to understand is how much the excessive costs of health care in the USA harm the ability of companies in the USA to compete – many even fail to appreciate the human cost of tens of millions of people without health insurance.
Related: Drug Prices in the USA – Measuring the Health of Nations – Overview of 5 Nations Health Care Systems – Fixing Health Care – Improving the Health Care System
Mark Graban is hosting the Management Improvement Carnival #40. Mark recently authored a new book, Lean Hospitals. Health care highlights from this carnival include:
Related: previous management carnivals – Curious Cat health care article library – Curious Cat Management Improvement blog Health Care posts – improving health care links
This is the 1,000th post to the Curious Cat Management Improvement Blog. Here are some highlights:
Information Technology: Toyota IT Overview – “customizing the code, to its business processes, and not the other way around.”
PBS presents a very nice overview of the heath care systems in Japan, United Kingdom, Germany, Taiwan and Switzerland in: Sick Around the World. It is a just a surface view of the overall system but even so does a good job of providing more understanding of the options available to fix the failed system in the USA. The US system costs over 50% more than others and has worse outcome measures than the alternatives (and leaves many without any coverage). And while the alternatives are not perfect the defenders of the status quo make claims about the alternatives are not accurate.
Table combines data from my previous post, International Health Care System Performance, and the PBS website:
| Australia | Canada | Germany | Japan | Netherlands | New Zealand | Switzerland | Taiwan | UK | USA | |
| National health spending – Percent of GDP | 9.5% | 9.8% | 10.7% | 8.0% | 9.2% | 9.0% | 11.6% | 6.3% | 8.3% | 16.0% |
| Percent uninsured | 0 | 0 | <1 | <2 | 0 | 0 | 16 |
Switzerland, spending 11.6% of GDP on health care, is the 2nd most expensive in the world.
Related: USA Spent $2.1 Trillion on Health Care in 2006 – Measuring the Health of Nations (USA ranks 19th of 19 nations studied) – Drug Prices in the USA – USA Health Care Costs 16% of GDP (2006) – Deadly Diseases of Western Management – 5 Million Lives Campaign
In 2005 I posted about some of the problems with drug pricing. It is nice to find at least a couple of people at MIT that want to have MIT focus research on the public good instead of private profit. As I have mentioned too many universities now act like they are for-profit drug or research companies. That is wrong. Drug companies can do so, institutions with purported higher purposes should not be driven to place advancing science below profiting the institution.
The DDC also would serve as a mechanism for prioritizing drugs for development, noted Finkelstein. “It is a two-level program in which scientists and other experts would recommend to decision-makers which kinds of drugs to fund the most. This would insulate development decisions from the political winds,” he said.
I see their idea as one worth trying. Lets see how it works. Their book: Reasonable Rx – Solving the Drug Price Crisis by Stan Finkelstein and Peter Temin
Related: USA Spent $2.1 Trillion on Health Care in 2006 – Measuring the Health of Nations – Antibiotics Too Often Prescribed for Sinus Woes – $600 Million for Basic Biomedical Research – articles on improving the health care system
ValuMetrix Services provides some really nice lean six sigma case studies. Simple short but still with enough detail to actually provide some sense of what is going on.
While on the topic of online case studies let me plug the Curious Cat management improvement library. I think it is one of the more valuable resources for management improvement offered on the Curious Cat sites. Library shelves: health care articles, lean manufacturing articles, six sigma articles, newly added articles…
via: Daily Kaizen
Related: Curious Cat Management Search – Management Consulting, what does the web site show? – Lean Management Case Study
The percent of GDP spent on health care in the USA increased again in 2006 – to 16%. Health care spending reached a total of $2.1 trillion, or $7,026 per person in 2006, up from $6,649 per person in 2005.
Related: USA Healthcare Costs Now 16% of GDP – Measuring the Health of Nations – USA Paying More for Health Care
Measuring the Health of Nations: Updating an Earlier Analysis
Rankings: 1) France 2) Japan 3) Australia 4) Spain 5) Italy 6) Canada… 18) Portugal 19) USA. Maybe the United States is last but still not significantly behind?
It might seem like a stretch to compare the lowest ranked country to the average of the top 3, but, for all those that feel the USA is the best health care system it raises the questions of why they don’t think 100,000 annual deaths is a significant enough problem to lower their opinion of the current system. And remember the USA system costs something like twice as much as the average system: up to 16% of GNP in 2006.
I must say I would rather have the Toyota mindset shown by those talking about the USA health system instead of the claims of how the current USA health system is number 1. In Toyota’s horrible last year they still had a profit of about $14 billion (I believe something like 20 companies have every made that much). The United States health system sure has some things to point to positively but the system seems to be losing ground to the rest of the world more and more quickly while many cling to a belief it is the best system around.
Related: Evidence-based Management – posts on improving health care – Improving Hospital Performance – articles on improvement health care – Best Research University Rankings – Top 10 Manufacturing Countries – Dr. Deming’s Seven Deadly Diseases of Western Management
I am reading a fascinating book by Jessica Snyder Sachs: Good Germs, Bad Germs. From page 108:
This is a great example of a positive special cause. How would you identify this? First you would have to stratify the data. It also shows that sometimes looking at the who is important (the problem is just that we far too often look at who instead of the system so at times some get the idea that it is not ok to stratify data based on who – it is just be careful because we often do that when it is not the right approach and we can get fooled by random variation into thinking there is a cause – see the red bead experiment for an example); that it is possible to stratify the data by person to good effect.
The following 20 pages in the book are littered with very interesting details many of which tie to thinking systemically and the perils of optimizing part of the system (both when considering the system to be one person and also when viewing it as society).
I have recently taken to reading more and more about viruses, bacteria, cells, microbiology etc.: it is fascinating stuff.
Related: Science Books by topic – Data Can’t Lie – Understanding Data
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