Confronting the Cost Squeeze
Healthcare’s caught in a squeeze. We’ve got the Affordable Care Act on one side and chronic illness and demographic changes on the other. The pressure is on. Healthcare costs are going into hyperdrive. Conscientious providers have no choice: We need to confront cost issues ourselves or become guilty bystanders to the slow deterioration of American’s healthcare system.
How do you deal with a crisis like this? You replace cost considerations with value considerations. Value – as you probably know – is the product of quality divided by cost. Our numerator is health outcomes. Our denominator is dollars spent. The challenge is to boost the numerator and shrink the denominator and drive value ever higher.
Problem is, you can’t do division without numbers. So you need data. You need to find ways to measure health outcomes for the thousands of conditions, illnesses and services your hospital offers. You’ve got to establish benchmarks and figure out where you stand in relation.
The more you measure the more problems you find. So you drill down into the data until you get to the root of the problem and you start address it. And very quickly, you start getting better. Outcomes improve. When they don’t improve, the data gives you a good idea of why they haven’t, and you work on it.
This is something we’ve done at Cleveland Clinic, where all our institutes are required to establish and set quality benchmarks, which are reported out every year in what we call Outcomes Books that are both printed and published on our website. Every year this data gets more granular and useful. Every year, our people look at their data and say, “We can do even better.”
Measuring cost is easier than measuring outcomes. But you need to get one thing straight: Cost isn’t what you get paid to do something, its what it costs to do it. Believe it or not, most hospitals don’t know what it costs them to do something like a prostate removal. We make it a point to know. We asked our physician leaders to deconstruct the costs of their top three procedures – to record the price of sutures, count how may instruments were on the table, tag the devices on the shelf and time how long patients were in post-anesthesia care. Once you’ve got all in front of you, it’s easy to see where you can cut costs. We cut 25 percent in some cases.
This is not a program for one medical center alone. This needs to happen across our industry if America is to continue to have the best healthcare system in the world.
Project Manager, Patient Services at Quest Diagnostics
8yQuantifying outcomes is next to impossible. How can we put a number on a person's life? We can't! It becomes more and more difficult to provide excellent healthcare do to increased costs and decreased reimbursements. It seems as though healthcare has taken a backseat to the all mighty dollar.
Photographer and owner at Photography As An Art as well as owner of Kangen Water World
11yDr. Cosgrove, you are absolutely right about the situation worsening in regards to the healthcare of our population. I have learned that there is one thing we can all do that can have a dramatic effect on all the degenerative and autoimmune illnesses which are treated with drugs and/or surgery most of the time. When people are consistently dehydrated and acidic, the body is becoming like a prune. The cells can not function properly when the minerals are being leached out to buffer the acidity in order to keep the blood alkaline, which it will be no matter how much soda, sports drinks, or acidifying food is ingested. But, and I've seen this personally hundreds of times in the past four years, when people drink enough alkaline ionized water, their new cells will help the body cure itself. My suggestion to solve the medical as well as financial crisis we are in is simple - put an ionizer in each home and get people educated about how important it is to change their body's pH to over 7.4. When people realize that their body is mostly water, and they start drinking the right water, they can change their life. I'd be happy to share more of my experience and understanding of why I make such bold statements.
Senior Data Governance Analyst CBIP, CDP, CSM
11yObamacare is the horse drawn ambulance. This bureaucratic takeover of healthcare is about control and will cut innovation and excellence out of the system with over regulation, second guessing, and dubious decision making. Be sure that long cues for service will develop soon and less service will be provided. Costs will skyrocket as they try to price fix in the name of cost controls. Socialism is the evil here where the few steal and control the assets and freedoms from the majority and as a ruling class they exempt themselves from the long lines and shortages that inevitably occur. Your health will be just another commodity. There is nothing more important than your health, without it you have nothing.
Language Specialist
11yIs your ambulance horse drawn? Mabe we should go back to the horse-and-buggy days before health care was a profit industry. There is absolutely no reason why health care should not be a non-profit sector of the economy. Professional and support staff might receive even higher salaries, facilities could be maintained, and new research applied. The problem is capitalism.
Retired General Manager at Wright Medical Technology Co. (Canada)- Now part of Stryker
11yThis is a very concise description of the global push for value in healthcare spending. I do not however agree fully with the equation composition. The creation of improved outcomes or the value proposition in healthcare spending, should also include Access as a numerator (Quality + Access ÷ Costs = VALUE). The value based market is looking for quality inputs that will leverage improved outcomes and greater access to care. The outcome is more high quality procedures for less cost; value for money. We are being asked to find ways to turn up the VOLUME