Tag Archives: health care system

Checklists Save Lives

photo of surgery room

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

Eight hospitals reduced the number of deaths from surgery by more than 40% by using a checklist that helps doctors and nurses avoid errors, according to a report released online today in the New England Journal of Medicine.

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.

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 ImprovementThe Power of a ChecklistNew, Different, BetterManagement Improvement History and Health CareOpen Source Management TermsFast Company Interview with Jeff Immelt

Our Failed Health-care System

The bad idea behind our failed health-care system by Malcolm Gladwell

One of the great mysteries of political life in the United States is why Americans are so devoted to their health-care system.

Americans spend $5,267 per capita on health care every year, almost two and half times the industrialized world’s median of $2,193; the extra spending comes to hundreds of billions of dollars a year. What does that extra spending buy us? Americans have fewer doctors per capita than most Western countries. We go to the doctor less than people in other Western countries. We get admitted to the hospital less frequently than people in other Western countries. We are less satisfied with our health care than our counterparts in other countries. American life expectancy is lower than the Western average.

Health Savings Accounts represent the final, irrevocable step in the actuarial direction. If you are preoccupied with moral hazard, then you want people to pay for care with their own money, and, when you do that, the sick inevitably end up paying more than the healthy. And when you make people choose an insurance plan that fits their individual needs, those with significant medical problems will choose expensive health plans that cover lots of things, while those with few health problems will choose cheaper, bare-bones plans.

In the rest of the industrialized world, it is assumed that the more equally and widely the burdens of illness are shared, the better off the population as a whole is likely to be. The reason the United States has forty-five million people without coverage is that its health-care policy is in the hands of people who disagree, and who regard health insurance not as the solution but as the problem.

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 USAMeasuring the Health of NationsOverview of 5 Nations Health Care SystemsFixing Health CareImproving the Health Care System

Data Visualization Example

[I replaced the embedded video, since Google broke the original link with the way they shut down Google Video after buying YouTube]

In Myths About the Developing World, Hans Rosling shows some great graphics to display data on health care outcomes. This is one of the talks from the great TED conference that we have mentioned before. They really have some great webcasts available on their site.

The presentation also gives a concrete example of faulty knowledge (people thinking things which are not so – related to theory of knowledge). He also makes good points on stratifying data at the 14 minute mark. See gapminder.org for good additional material.

Related: Great ChartsOpen Access Education Materials

USA Healthcare Costs Now 16% of GDP

U.S. Health Spending Estimates [the broken link was removed]:

Health care spending growth in the United States slowed for the third consecutive year in 2005, increasing 6.9 percent compared to 7.2 percent growth in 2004 and 8.1 percent in 2003, the Centers for Medicare & Medicaid services (CMS) reported today.

The 6.9 percent growth in 2005 marks the slowest rate of growth in health spending since 1999, when growth was 6.2 percent. Health care spending reached almost $2.0 trillion in 2005, or $6,697 per person, up from $6,322 per person in 2004.

So the rate at which healthcare spending continues to increase is decreasing. That is better than increasing at an increasing rate. However, it is already a huge drag on the economy and the need is for the expenditures to actually decrease (not slow down the rate of increase) and for performance to improve. There are good things being done but much more is needed. Health care costs are a huge cost for companies.

Health Care Spending in the United States and OECD Countries [the broken link was removed]

This growing gap between health spending in the U.S. and that of other developed countries may encourage policymakers to look more closely at what people in the U.S. are getting for their far higher and faster growing spending on health care.

Related: USA Health Care Costs reach 15.3% of GDP – the highest percentage ever (2 years ago)Health care spending rose at twice the rate of inflation in ’05Health Care Costs Approach $2 Trillion – Bill takes on prescription costs [the broken link was removed]

Starbucks: Respect for Workers and Health Care

Starbucks Corp. CEO Howard Schultz interview on Marketplace [the broken link was removed]

I grew up in Brooklyn, New York. I guess it’s been well documented, many times, in federally subsidized housing known as the projects. My dad never made more than $20,000 a year and I saw first-hand what it was like to kind of live on the other side of the tracks

the company is deeply-rooted in a sensibility and trying to build the company with a conscience primarily, I think, defined by the fact that we did something in 1989 and 1990 that had never been done before, which was creating a program in which we had comprehensive health insurance for all employees including part-timers and created a mechanism for equity in the form of stock options

What about those that believe you should cut spending on employees, since health care, for example, is so expensive?

We’ve created more productive people and created an environment where Starbucks in many places domestically and around the world is the employer of choice and we are able to attract and retain fantastic people because of the culture of the company, which is defined by these benefits. So my argument is simple, it’s which investment do you want to make? An investment in your people or do you want to make an investment in the hidden costs of turnover and retraining your people?

So many companies talk about how people are the companies most important asset, so few act that way.

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Health Care Crisis

Probe finds nation’s emergency care system at ‘breaking point’ (the San Jose Mercury News broke the link so I removed it – poor usabilty on their part) by Lauran Neegaard:

It’s a sobering symptom of how the nation’s emergency-care system is overcrowded and overwhelmed, “at its breaking point,” concludes an investigation by the Institute of Medicine.

The spate of similar articles reminded me of the recent post by Mark Graban: Stop calling it “ER Congestion”. He states: “It’s not an ER problem, it’s a systemic hospital problem.” I agree. The health care system is broken and has been for a long time. Symptoms like the huge cost of health care, medical errors, ER problems etc. are all related. Continue reading

Lean Hospitals

Hospitals Turning Into Lean Machines by Megan Myers (broken link removed):

The push toward adopting more efficient strategies in health care largely stems from a crucial need to reduce health care costs.

In 2002, health care expenditures in the United States were $1.6 trillion, or 14.9 percent of the nation’s gross domestic product.

Meanwhile, studies have estimated between 30 percent and 60 percent of the costs of providing health care services is waste.

To cut that waste, hospitals are looking at their organizations from a patient’s perspective. That means breaking down the systems and starting fresh.

Price Discrimination in the Internet Age

Re: Boing Boing post – Why HP’s region coding excuse is bogus

There is a simple method for large multi-national companies to use to protect against currency fluctuation. They can use foreign exchange futures to do so. Companies do this all the time (some also chose not to for their own business reasons). “Foreign Exchange is the largest of the global financial markets. Daily trading volume in the currency markets is estimated to be 1.1 US trillion dollars.” – Smith Barney Citigroup [broken link removed]. Some companies choose to speculate on the direction they believe exchange rates will go (either directly, or by not hedging when they believe rates will move in their favor and hedging when they predict doing so will benefit them).

In fact the United States government gives beneficial tax treatment (60% of profits are classified as long term capital gains, regardless of the holding period, thus reducing the taxes owed) to profits from “futures” trading. The reasoning is that creating a market for companies to hedge their risks is so important we must provide tax benefits to create a market for this activity. Some may think that the special tax advantages are more likely due to large payments from lobbyists to those who write the tax code than the merits of such tax law. In fact I may be one of them. Farmers often use futures contracts (on, for example, wheat or corn) in much the same way that companies can use future currency contracts to hedge their risks. That point is mentioned by the lobbyists, I would imagine.

The argument that you need to cripple products by geographic area to cope with currency fluctuations is false. It might be that a company wants to practice Price Discrimination (definition from US Federal Trade Commission [broken link removed] or from the Digital Economist [broken link removed] ) to charge more where they can get more and less where they can get less. In the view of such a company, the internet, and other factors, have made it increasingly easy for people to buy in the low cost region and resell the items in the region where the company wants to charge higher prices. If you want to keep practicing price discrimination as a company you have to erect barriers to the free trade of your products by your customers.

Reimporting drugs is another clear example where companies try to use price discrimination – to charge US consumers more than Canadian consumers. Drug companies have successfully created legal road blocks to those trying to get around the geographic price discrimination. However, since lately those responsible for enforcing those laws have not been very eager to do so you can imagine the drug companies would like a drug that only worked in the country it was purchased. Another example of price discrimination are the regional versions of Windows.

I happen to believe companies should have the right to practice price discrimination. And in fact they should have the right to make products that have replacement parts that have been crippled to work only in products sold in specific countries. I would rather deal with companies that were trying to provide me more value not less. So I would be reluctant to buy from companies that practice such anti-consumer behavior. And luckily the internet and blogs are making it very difficult for companies to hind such practices. My guess is once attention is focused on such practices some companies will take advantage of such behavior by pledging “to do no evil.” And those companies will gain customers. The process will be quite a bit more confusing in the real world but that is how things will play out in the long run.

Hedging Currency Fluctuations:

USA Health Care Costs reach 15.3% of GDP – the highest percentage ever

re: Health Care Spending In The United States Slows For The First Time In Seven Years

The Centers for Medicare and Medicaid Services (part of the United States Department of Health and Human Services) issued a report (the press release states that report will appear in the Jan/Feb edition of Health Affairs but does not provide a link so the link is my guess of where the report will appear) and a news release putting a positive spin on the data.

“Spending growth for prescription drugs decelerated significantly to 10.7 percent, down from 14.9 percent in 2002.” So we only increased spending on prescription drugs by 10.7 percent? I guess that could be seen as positive? To me though increasing expenditures by 10.2 percent seems more like of a problem than a success, though I can’t argue it is less of a problem than the year before. My last post was on prescription drug prices in the USA.
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