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Getting Spanked by Car Maker CEOs: Even Detroit Thinks Healthcare’s Innovation and Productivity are Bad

May 7, 2008 News 4 Comments

Inside Healthcare Computing has graciously agreed to make previous Mr. HIStalk editorials available from its newsletter as a weekly "Best Of" series for HIStalk. This editorial originally appeared in the newsletter in October 2006. Inside Healthcare Computing subscribers receive a new editorial every week in their Electronic Update.

Big-company CEOs have healthcare on their mind. I know that because they keep insulting us in the national media. We’re too expensive and we underutilize technology, they’re telling the world. It’s our fault that jobs are moving offshore, not their own corporate greed or inefficiency.

My first reaction: who do they think they are? We’re getting lectures on innovation, productivity, and cost control from GM? If I wanted that kind of advice, I’d go to Toyota.

Unfortunately, they’re right. The healthcare price increase merry-go-round has to stop eventually. Most of the job growth since 2001 was in healthcare, and that’s not something to be proud of. We’re leaving an expensive mess for our children to clean up just as Baby Boomers suck the system dry with their healthcare demands. If GM doesn’t like it today, they’ll hate it tomorrow, unless they’re watching the show from China or India by then.

Businesses want to force computers on us, dragging us kicking and screaming out of the dark ages. Unfortunately, software doesn’t automatically bring increased productivity and lower cost. If it did, all of those hospital dollars spent on Microsoft Office and Windows would have made us stunningly more effective instead of just giving employees something to screw around with as a pleasant productivity alternative.

I’d like to think that computerization can really reduce costs, but I haven’t seen it happen anywhere yet. I keep hearing about all of those showcase sites buying the latest and greatest, but the correlation to bottom line and quality outcomes is murky at best. Where’s the average 100-300 bed hospital that has seen its overall costs drop 30% because of software? You’d know them because every other hospital in town would be out of business.

Hospitals can cut expenses in three ways, all of them at their local level. They can manage labor, which is by far their largest expense. They can go after the utilization and cost of drugs and supplies. They can control physician practice variation. I’m glad I said “can” instead of “do” because, for various reasons, these things don’t happen. Software can’t fix them because they’re management problems, although given desperate enough circumstances, they could be fixed.

I’m glad much of our recent IT investment relates to patient safety and outcomes. I hope electronic medical records really do become a standard, with all the information sharing that the RHIO people keep yapping about. But when it comes to drastic cost reductions driven solely by buying and implementing software, I’d say that’s wishful thinking. There’s a lot of work to be done fixing the system and its underlying misaligned incentives before we even try to automate it. No business became a world-beater just by installing SAP, even if they were lucky enough to not be one of those that went bankrupt trying.

I do see a ray of hope in being called out by big-company CEOs. As hard as it is to have change forced on you, I think that time is here. I work in a hospital, but I’m also the occasional patient and medical bill-payer. When wearing those hats, I’m just as mad and frustrated with the system as those CEOs and I bet you are, too. Healthcare is too expensive, too bureaucratic, and too unimpressive in benefits delivered. As a software guy, I’m pretty sure that fix will take more than just people like me.

Mr. HIStalk’s editorials appear each Thursday morning in the subscribers-only version of Inside Healthcare Computing’s E-News Update.  To subscribe, please go to:  https://insidehealth.com/ihcwebsite/subscribe.html or call 877-690-1871.

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Currently there are "4 comments" on this Article:

  1. That editorial was awesome! I agree with everything, except that their is no software out there that is going to cut cost and make more money. Physicians & Hospitals can make more money and save the Healthcare Industry money at the same time. Keeping patients healthier and getting paid for your servie is he key and we have developed the web-based knowledge software that can do it. The industry needs a culture change and that is what we are all about. Love to talk to you about!!!!

  2. Great editorial – I think it hits the mark in a lot of ways.

    There are some sub-topics that can be drawn out of the comment that SW does not automatically bring increase productivity. When used as directed – it does. One example is Enterprise Health Analytics. These solutions can increase productivity, improve quality and save lives when integrated into information based management practices. EHA solutions are much more effective today than in the past and with the pervasiveness of EMR systems at all levels of providers have more data accessible than ever before.

    The major roadblocks day to day is that executives still don’t manage using analytics – They don’t make decisions based on all the information – rather some or most of it. This comes from a recent trend in forcing the implementers & IT evaluation teams to focus too much on technology acquisition costs vs. long term value of solving the problems at hand. They spend a lot of time and energy creating a disparate silo analytics environment and loose of sight of a true population based view of their patients that would allow them to make real change happen where it’s needed.

    The key to improved outcomes starts with having clean, synchronized (time dimension) longitudinal patient records available to your analytics environment. It is very possible to reduce medical errors, improve patient quality and aid doctors in their ability to improve treatments when the right criteria are established in developing the foundation for these systems. It’s time to focus on providing the right data, at the right time and in context. It’s time we stop the focus on how cheap you can acquire solutions and get back to how well they fit for the long term needs of the hospital and keep the medical community (users) involved in the decision making process.

    My bet is that this will become more important (or apparent) to providers when Medicare and Private Payors are able to determine medical errors using their analytics- and not pay for them. It won’t be long before CMS or the Blues can prove incidents of Community acquired infection or trauma caused by improper safety measures in radiology were the result of a claim and make the hospital foot the bill.

    Stay tuned!

  3. Sadly, I do not believe that the solution to our healthcare problem will be found in technology, nor do I believe that providing insurance to everyone will fix it. (Not to say that we shouldn’t try to improve on those, which my career is dedicated to doing.) But the only solution that makes sense is for everyone to take responsibility for their own health.
    We can’t go through life making poor decisions about diet, exercise, drug and alcohol use, and absurd volumes on our car stereos and then expect someone else to pay for us to get better. There is no amount of technology (or insurance) that is going to solve the real problem. The thing is, no one is really talking about the real problem. We’re all focused on the costs, not the root cause. Listen to all the candidates speeches and tell me I’m wrong.

  4. Re: Dave Dillehunt – Your comments are perfectly on target. I 100% agree!!!: We can’t go through life making poor decisions about diet, exercise, drug and alcohol use, and absurd volumes on our car stereos and then expect someone else to pay for us to get better. There is no amount of technology (or insurance) that is going to solve the real problem. The thing is, no one is really talking about the real problem.

    Accountable health plans where patients who do their part get a break and those who refuse pay big. Hit the pocket book and you will change behaviors.

    Everything else is just a distraction at this point.

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