Is Healthcare Reform On the Wrong Track?

What everyone wants, in the end, is healthcare reform that accomplishes the goals of wider access and lower cost. But there are many different tracks to achieve this needed goals.

But when “reducing the cost of healthcare” by mandating lower fees to providers, this should be more carefully analyzed to prevent a future of continuous change. Best to get it right at the start instead of rushing to judgement. This will best be done if policymakers are using the right data to make wise decisions rather than picking a data point from one place and another datapoint from another place and yet another datapoint … searching for datapoints that support what they wanted to do anyway.

This excerpt from The Healthcare Value Blog indicates what I mean:

We are surprised and dismayed at how policymakers are using the findings as the map for healthcare reform in Washington, D.C. We are also frankly appalled at how The New Yorker article by Dr. Atul Gawande has seemingly become the guidepost of reform for policymakers. The reason is that the conclusions that The White House and much of Congress have drawn from The New Yorker article are, at best, suspect and, at worst, completely wrong. Reengineering 20% of the economy is a large task, in our view, and getting the facts straight is important.

So, what have we done? Instead of using an “Atlas” to analyze McAllen and El Paso, we suggest using a “GPS” to triangulate the position that hospitals played in overall excess cost and utilization. Doing so provides some critical facts that The New Yorker failed to report.

Check out the observations by Hal Andrews & John Morrow from The Healthcare Value Blog: Lost in D. C. with the Dartmouth Atlas.

That said, all of us can read enough of the crystal ball to realize that hospital leaders will need to carefully examine their own hospital systems for ways to eliminate non-value producing processes. The goal must be to reduce the cost of delivering safe, quality healthcare. As has happened at several clients we have worked with recently, hospital managers do have the potential to reduce labor cost without layoffs, and at the same time create a renewed, long term commitment by staff to achieve safer, quality healthcare for patients.

Hospitals are big, complex businesses — typically the largest employers in any city. Running such a business is no easy task. Taking cost out of such businesses must be done smartly less the wrong decision leads to patient safety issues or to unleash unintended consequences such as doctors, nurses and specially-trained staff voting with their feet and going elsewhere to make a living.

Where we might differ from some of the global directives coming from national policy is that these savings need to be delivered one hospital at a time, each with its own unique people, processes and culture. What we don’t want to see is our national system of healthcare providers flung into chaos without the time to get leaner and better.

We believe most healthcare providers understand the need to reduce the cost of delivering safe, quality healthcare and we see them already tackling this issue without being subjected to policies that might cause them to do this the wrong way.

Filed Under: Financial Performance

Tags: Healthcare Reform Policy, hospital labor cost management