Margaret E. O’Kane
President and Founder, National Committee for Quality Assurance
Following is an excerpt from Margaret O'Kane's commentary "Redefining Value in Health Care: A New Imperative" forthcoming in the August issue of hfm magazine.
Supporting the elimination of unnecessary care is easy if you are a patient or a payer. It’s a little more complicated for hospitals and health systems whose balance sheets may rely on the income from hysterectomies and full-body scans that might have been avoidable. Hospital and health system CFOs are uniquely situated to see both sides of this issue, as financial stewards of organizations that both provide care and purchase it.
Though purging the system of unnecessary care--and the associated revenue--may feel to CFOs like a conflict of interests, it shouldn’t. Consider the alarming economic backdrop against which this unnecessary care occurs. According to Brookings Institution economist Henry J. Aaron, at the current rate of increase, by the year 2022, half of the nation’s economic growth would go toward increases in healthcare spending. By 2051, all economic growth would be required to sustain health care.
The relentless rise in healthcare spending--spending that has outpaced growth on income by 2.5 percent annually for the past 40 years, says Aaron--is of course due in part to continuing positive advances in care in the form of new procedures, new technologies, and new pharmaceuticals. The fact is that we have no choice but to wring every bit of waste out of the system if we are to afford these advances and those yet to come. Rationing of some kind remains a real possibility in the future, but the imperative--both financial and ethical--is to apportion care based on effectiveness rather than cost. Better still is to avoid rationing altogether by creating an efficient system that reliably provides only evidence-based care. CFOs must join with their organizations’ chief quality officers to champion this goal.
When they do, they will find that quality very often costs less. For example, Allegheny General Hospital in Pittsburgh saved $2 million by investing $35,000 in improvement work that dramatically reduced cases of ventilator-associated pneumonia and central line infections, costly conditions that represent net losses for the hospital; and Charleston Area Medical Center saved $3 million on drug and supply costs through judicious review and administration of antibiotics for surgical patients and reduced the rate of infection.
