June 18—“One out of every three dollars spent in your organization helps no one at all,” Don Berwick, MD, former Centers for Medicare & Medicaid Services administrator and founding CEO for the Institute for Healthcare Improvement, told healthcare finance professionals at ANI: The HFMA National Institute on Tuesday.Don Berwick at ANI

This is a moment of “very special opportunity” for healthcare finance professionals to make a difference in health care by pinpointing areas where waste can be removed throughout the continuum of care, so that better care can be provided at lower cost and so that a portion of state and federal funds that currently go toward our nation’s healthcare system can instead be directed to other programs that benefit society. 

“You’re about to move right now from the engine room to the wheel house,” Berwick told finance professionals at ANI. “Whether you want to or not, you’re going to be pilots.” 

A System Fraught with Waste—and Confusion 

Currently, there is a 400 percent difference in healthcare costs depending on what region of the country you live in, according to pricing data recently released by CMS. And in Massachusetts, where Berwick announced Monday his plans to run for governor of the state, every line item in the state budget has decreased from 2000 to 2012 except for health care, which increased 59 percent. 

“What health care takes [in terms of spending], roads and schools do not get,” Berwick said. 

But transforming healthcare delivery to improve value for all is a difficult task made even more challenging by economic pressures, political polarization, lack of authentic dialogue between key constituents, public confusion, and more. 

The American healthcare system is no longer affordable, and it provides less value than delivery systems that cost much less in other countries. In fact, Berwick said, “Low value characterizes American health care.” 

Don Berwick 2Yet there are examples of organizations that have significantly reduced costs and improved access to care and quality by being open to new ways of thinking and nontraditional approaches to care and care delivery, Berwick said. 

For example, Denver Health implemented Lean production practices to increase efficiency throughout its system—and saved $180 million in five to six years, with the lowest case-mix adjusted mortality rate in the UHS Consortium. 

The “Nuka” care system, based in Anchorage, Alaska, encourages residents to take charge of their health—and has reduced emergency department utilization and inpatient admissions by more than 50 percent while increasing patient satisfaction. 

Elsewhere in Alaska, telehealth consultations have reduced travel by 70 percent, while training of high school graduates as dental health therapists has expanded access to dental care by reducing costs. 

The consequences of inaction are great, Berwick said, and they range from cutbacks in coverage, weakening of the safety net, increased burden on individuals to take greater financial responsibility for their care, declines in funding for research and teaching, and threats to other social purposes. 

“It takes courage to change this system—but there are many with courage out there,” Berwick told healthcare finance professionals at ANI.

A Call to Action for Healthcare Finance 

Now is the time for healthcare finance professionals to take the lead in redesigning our nation’s healthcare system, so that it meets the “triple aim” of providing better care and improving health at lower cost, Berwick said at ANI. Don Berwick 3  

"I want you to be interested in improvement,” Berwick told healthcare finance professionals at ANI, “and to do that, you really need to decide what you want to improve.” Berwick suggested finance professionals begin by finding areas of waste in their organizations—such as overtreatment, excesses in administrative costs, failure to coordinate care, and failures in care delivery—and concentrating on removing waste from these areas, one by one. 

“You can’t say it can’t be done. It can be done,” Berwick told ANI attendees. “It is not a problem of possibility. It is a problem of will. 

“This is the time when healthcare finance professionals—and I mean you—take the lead,” he said. “Find us the way to the triple aim. It’s now your job.”

Publication Date: Tuesday, June 18, 2013