President Obama has repeatedly promised
that providing every American affordable access to quality health care
won't cost more money than we'll save through reform, but he's recently
raised the stakes even further. Health care reform, he has said, would
"foster economic growth" and "unleash America's economic potential."
Is that realistic?
understand why critics are skeptical. After all, if you'd asked U.S.
automakers several years ago what the chances were that someone could
produce a snazzy family sedan averaging 50 miles per gallon, they would
have been dismissive, too. Yet while the establishment scoffed, Toyota
rolled out the Prius.
The poster child for the Prius
equivalent in health care-high quality, reasonable cost, satisfactory
personal experience–is the Mayo Clinic. But we can't rely on
franchising Mayo to remake American medicine. If you spend time with
those working in the trenches of genuine health care transformation,
you'll see hopeful signs you might miss just looking out the window in
Researchers believe there is 30 percent "quality
waste" in U.S. health care; that is, unnecessary costs due to care that
is inappropriate, inefficient or unsafe. As it happens, the first
hospital executive I ever heard use that figure to describe savings
he'd personally seen at his own institution works on a much more modest
scale than Mayo.
Lowell Kruse is about to retire after 25
years as CEO of St. Joseph, Missouri-based Heartland Health. Seven
years after I listened to him describe what his team had done to
improve care and cut costs, he's still sticking by his earlier estimate
of the waste that's there for taking. "It's not easy to get at, not
easy at all," he cautioned in a phone call. "There's a whole bevy of
things lined up against it, but it's there."
have added that you don't have to run a large, rich, academic health
system in order to be successful at trimming costs while improving
quality. You just have to build the kind of culture that believes
preventing heart disease is just as important as providing superior
care to those who end up needing cardiac surgery. You have to build a
culture that relentlessly attacks broken business processes; for
example, standardizing a confusing welter of surgical supplies. And, of
course, your physicians and employees have to regard these activities
and countless others as a benefit to patients rather than a threat to
Heartland may not be a household name, but its
medical center ranks as one of the top 20 in the country (out of about
5,000 hospitals) on a series of Medicare quality and safety measures.
Heartland has also accumulated a slew of awards, and it recently hosted
a group of British visitors wanting to import some of its Show-Me State
Nor is Heartland an isolated example. In Appleton,
Wisconsin, Dr. John Toussaint insists that "quality waste" adds up to a
stunning 40 to 50 percent of costs. Until recently Toussaint ran
ThedaCare, whose systematic efforts to improve care and lower costs
were profiled in a case study by Harvard Business School superstar
expert Michael Porter.
Porter and heavy hitters like
former Treasury Secretary Paul O'Neill serve on the board of
Toussaint's new ThedaCare Center for Healthcare Value, which is
organizing a national coalition of other providers with a similar
approach. Think of it as a cooperative to take the basic "Prius
Medicine" platform and refine the details.
these types of initiatives are critical to demonstrating that the
rhetoric of health system transformation makes sense in reality. For
example, experience shows that widespread use of information
technology, a focus of the Obama effort, has the greatest impact when
applied by clinicians and managers in support of specific cost and
Accountability and transparency, two
other pillars of reform, produce the best results when incorporated
into routine clinical and business decisions. And it's not coincidental
that everyone from physicians to the cleaning crew at places like
Heartland and ThedaCare make constant references to "lean production"
and other kaizen (continuous improvement) terms adapted from none other than Toyota.
everyone agrees, the stakes involved in health care reform are critical
to U.S. economic health. If we can slash the $2.4 trillion spent on
health care by anywhere close to 30 percent, the $720 billion saved
each year would have a profound effect on our ability to rebuild roads,
invest in schools and restore our global competitiveness. Together,
these are critical components of realizing America's economic potential.
the Congressional Budget Office is not allowed to "score" these
potential savings when evaluating legislation, achieving even a
fraction of what is possible would pay for the $1 trillion to $2
trillion estimated 10-year cost of universal coverage.
like Kruse, Toussaint and others have shown they can give their
communities care that's safer, more affordable and more reliable. The
question is whether Congress will address the misaligned incentives and
other obstacles standing in the way of making a Prius-equivalent the
new standard of American medicine.
Michael Millenson is a frequent contributor to THCB and also a contributor Kasier Health News, where this post first appeared.