The day before a routine outpatient procedure, I received three phone calls. 


All three callers asked me the same questions about medical history and reminded me to fast after midnight.  

One call was from the physician’s office, and two were from different hospital departments. All three callers left me messages, and when I returned the calls, I had to leave messages. At first, I didn’t know that the three calls came from three different sources—I assumed they were three different messages from the same source—and so I didn’t know that I needed to reach all three people, and when someone returned my call, I didn’t know which original message the person represented. But eventually all three parties and I found one another. 

The implications are obvious: Why not one phone call, with the responses shared among the three entities? Or better still, why not have me fill out an online form, with certain responses triggering a phone call? 

This anecdote is a microcosm of our healthcare system’s challenges and opportunities. In the cover story of this month’s hfm, Boston University professor emeritus David W. Young explains those problems and opportunities at the macro level. The article, “Fiscal Strategy in an Era of Reform,” outlines the forces driving the need to reduce healthcare costs. Then, with laudable clarity, he reminds us that there are only five drivers of healthcare costs: case mix, volume, resources used per case, cost of a resource unit, and fixed costs. His explanation of each puts a healthcare organization’s opportunity to control costs into sharp focus.

I asked myself where my modest micro example of healthcare waste fits into Young’s rubric. Sure enough, it’s there: cost of a resource unit. “Even without having good cost information,” Young writes, “any hospital manager knows that cost reductions can take place with an increase in efficiency.” My anecdote conceivably could also fall into the category of fixed costs, if a more efficient process leads to a reduction in staff not related to the volume of care provided. 

My simple anecdote also illustrates the problem of what Young calls the healthcare food chain, in which lack of aligned incentives means that one entity’s cost is another entity’s revenue. Closer alignment between my physician and hospital would eliminate at least one of those three phone calls.  

Young concludes that cost control is everyone’s business. I imagine the frustration of the people who called me that day, and the frustration they must feel calling multiple patients each day. I am reminded of Donald Berwick’s early writings about quality improvement in health care, in which he remarks on good people caught in a bad system. (By the way, Berwick is one of the keynote speakers at this year’s ANI: HFMA’s National Institute.) Each person I spoke with on the phone—indeed, each person I encountered in the entire episode of care—was bright, pleasant, and professional. I enjoy envisioning healthcare professionals like these across the country being unleashed by innovative organizations to tackle our cost problem at both the micro and macro levels. 

Publication Date: Tuesday, January 01, 2013

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