Published in the February 2015 issue of Today’s Hospitalist
AMERICANS “both individually and as a nation ” spend a boatload on health care. A study in the January 2013 issue of the American Journal of Preventive Medicine pegged annual health care expenditures in the U.S. at $7,290 per capita, far more than in other Western countries. By way of comparison, the outlays were $3,895 in Canada and $2,992 in the U.K.
But those numbers themselves don’t tell you much. Maybe we’re spending more to get more. A Mazda and Mercedes both have four wheels and provide transportation, but there are big differences in terms of comfort, conveniences and safety. Surely, higher health care spending translates into better care.
At least that’s our collective delusion. The same study found that the U.S. was dead last for quality of care, access to care and health care efficiency in a comparison group that included Australia, Canada, Germany, The Netherlands, New Zealand and the U.K.
How to explain that disconnect? One word: waste.
In 2012, the Institute of Medicine (IOM) published a large monograph called “Better Care at Lower Cost.” In a particularly depressing chapter, the report noted that we spend about $2.8 trillion per year on health care. Of this, 27% is considered “excess costs,” which is a polite euphemism for waste.
Where do all those excess dollars go? The IOM chunked it out into six categories. The largest “unnecessary services “totaled $210 billion. Excess administrative costs, some $190 billion, came in at No. 2. The hemorrhaging continued with inefficiently delivered services ($130 billion), prices that are too high ($105 billion), missed prevention opportunities ($55 billion) and, finally, fraud ($75 billion).
The total roll-up? About $765 billion “a number approaching Medicare’s entire budget.
The local angle
I already know what you’re thinking: “But I’m just a lowly hospitalist at a small community hospital. Scrimping on CBCs and paper clips won’t make a difference.”
And I’ll tell you that you’re wrong.
Going back to the IOM report, hospitalists own large chunks of two categories “unnecessary services and inefficiently delivered services ” that account for 44% of all that waste. Reducing that by just 1% would save $4 billion per year and thousands for your hospital.
But here’s the problem: Hospitalists generally don’t know where to start because the solutions are in the realm of industrial engineering, not medicine.
To understand waste, it’s helpful to consider its polar opposite: value. Toyota, the car manufacturer, is famous for Lean, a systematic method for increasing value by driving out waste. Lean has been adopted by many other industries, including health care.
According to Mark Graban, the author of “Lean Hospitals,” value starts (and ends) with the customer. He notes that value-added activities fulfill three criteria:
- the customer must be willing to pay for the activity;
- the activity must transform the product or service in some way; and
- the activity must be done correctly the first time.As Mr. Graban further indicates, “all three of these rules must be met or the activity is non-value-added, or waste.”
Lean involves an elaborate breakdown of types of waste. (See “Taxonomy of waste,” below.) For those of you who are into mnemonics, you can remember these various elements by thinking of TIM P. WOOD, where human potential (or people) is the middle initial.
Stop fighting fires
When you start to look around “and please do ” hospitals (and hospital medicine!) are absolutely rife with waste. Spend a few weeks just identifying and naming it.
Let’s take the example of Mr. Wood, who presented to the hospital through the emergency department with a COPD flare. The ED called you 90 minutes ago, he still hasn’t hit the floor and you want to bang out his H&P before your shift ends. From a Lean standpoint, this is a classic example of waiting waste. The next work activity “your H&P ” can’t happen while Mr. Wood languishes in the ED.
“Screw it,” you mutter to yourself and trudge off to the ED to see the patient down there.
In this case, you score points for being a go-getter. But you’ve done nothing to address the root causes of the problem. That problem will almost certainly happen again tomorrow and the next day, indefinitely.
Lean calls for a radical change in perspective. Mr. Graban writes, “Employees and leaders often think their job, or the value they bring to an organization, is their ability to deal with problems. … Instead of pointing at workarounds and heroic measures as ‘our job,’ we have to look at waste as something to reduce or eliminate, so we can spend more time doing our real work “caring for patients.”
Hospitalists have forever been working on quality improvement projects. DVT prophylaxis. ACE inhibitors for heart failure. Pneumonia vaccinations. And so forth.
But notice that virtually all of your quality improvement projects are clinical in nature (when you’re a hammer … ). What’s needed more urgently are QI efforts that target hospital operations and how your organization functions. And I bet your hospital’s most pressing need (go ask your CEO) is to increase value by eradicating waste.
I’ll be digging deeper into eliminating waste in health care in future columns.
David A. Frenz, MD, is a hospitalist for HealthEast Care System in St. Paul, Minn., and is board certified in both family and addiction medicine. You can learn more about him and his work at www.davidfrenz.com or via LinkedIn.