Scott MacStravic
Waste management in the narrowest sense relates to how to dispose of materials, food, hypodermic needles, outdated equipment, etc., which is a complex challenge in hospitals because of the health risks involved. But in the broadest sense, eliminating “wasteful” efforts, practices, errors, and otherwise minimizing avoidable expenses is even more important. The payors for hospital services are growing ever stingier, and eliminating costs from the system is becoming a national obsession.
One way to eliminate waste is to reduce the large variations in the volume of healthcare prescribed and delivered by physicians and used by patients. There have been estimates that as much as one-third of all care does little or no good, or does no better than far less intensive and expensive options. One egregious example is the care that only becomes needed when errors of omission or commission are made in hospitals, and complications arise that would not had best practices been followed. Not paying hospitals for such examples is perhaps one of the best ways to reduce them.
One of the longest-recognized principles of management is that “what gets rewarded gets repeated”. Its corollary should be that “what is not rewarded, or even is punished should not be repeated.” By not paying for what consumers should not use, and hospitals should not provide, is an obvious application of this corollary. And hospitals seem to be striving to reduce errors and improve patient safety, as both publication of their performance and punishment by not paying for “never” kinds of errors are both being tried. There have been estimates that eliminating avoidable errors could save the economy $17 to $29 billion a year. [R. Lord & M. Buyse “We Pay for Medical Errors” The Boston Globe Sep 12, 2007 (www.boston.com)
Hospitals have justly argued that the value of hospital and medical care, and the positive economic impact that hospitals have on their communities and the nation’s economy are still justified. Of course, even drug pushers and the Mafia contribute significantly to the economy, and the issue is not so much whether there is value, but whether we have to pay so much to get it. Waste elimination is but one answer to that question.
A recent set of guidelines issued by the American College of Chest Physicians, for example, has recommended that lung cancer screening with CT technology and similar expensive methods not be carried out, except in research studies. This will be bad news to the hundreds of CT scan providers, including hospitals and free-standing diagnostic imaging centers that have been generating lots of revenue through these scans. The guidelines, in effect, label them as waste to be eliminated. [“Routine Lung Cancer Screening Not Advised” Yahoo! News Sep 12, 2007 (news.yahoo.com)]
Many hospitals (perhaps the American Hospital Association knows how many?) offer modest programs in proactive health management (PHM), from fitness centers to disease management centers, to executive health programs, to community immunization, screening, and even home visits to fragile patients to prevent their needing inpatient care. These often work to the hospitals’ advantage, as when screening identifies people in immediate need of care, or when home visits prevent admissions that would not have been profitable, but they do help. And most are probably done as part of the hospitals’ mission of community service, though they also help protect tax exemption for non-profits.
But considering that less than 5% of healthcare spending is for prevention, while 95% is for sickness care, it seems clear that hospitals could be dramatically more involved and invested in prevention or PHM than they are today. Arguably, all hospitals should be invested in PHM for their own employees, as a strategy to reduce their costs, as well as improve their overall performance. And it should probably be an almost universally adopted “community benefit” service, even a revenue-generating service line, to enable hospitals to balance both their service to the community and their revenue sources.
The newly developing Centers for Preventive Medicine®, enabled by U.S. Preventive Medicine®, offers at least one approach to reducing wasteful expense in hospitals. It includes a consumer-purchased option for preventive diagnostic testing and coaching, as well as “The Prevention PlanTM”, for employers and their employees. When I last checked, there were only three facilities offering these programs, but that’s a start. The narrow hospital investments in a single disease management program, fitness centers, etc. could be expanded into a PHM strategy.
Moreover, if such a strategy were aimed at local employers, hospitals could see a major transformation in their role and importance to their communities. They would become automatically part of the healthcare cost crisis solution, rather than the largest segment of the problem. They could add a whole new range of services, dealing with employee performance impairment factors such as emotional problems, sleeping difficulties, stress, poor nutrition and inadequate fitness, starting with their own employees and expanding proven programs to local businesses.
Not that this would be easy – hospitals have serious handicaps if they are ever to become competitive-cost options for PHM to employers, or even for their own internal use. But if the total “waste” in healthcare were calculated correctly, to include all avoidable expenses, the vast majority of hospital revenue would disappear, at least in the long run. And planning for a future of waste management, by payors and consumers in their own interests, would be a wise option for hospitals, even if they choose not to join in the effort.
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