I live in a growing and desirable part of southeastern United States. To get just about anywhere by car however I have to drive through rural America. Recently, I stopped at a small, independently owned gas station and noticed something strange behind the counter. There was only one choice of cigarettes. In my experience, tobacco sales were a big business in this part of the country and gas stations made a pretty good margin on every pack sold. I asked the attendant if those were the only cigarettes he carried. “Yes sir,” was the response. Seeing the puzzled look on my face he further explained, “You see, if you live here we’d like you to stay here and if you smoke those things you’re probably not gonna live here very long. If you’re passing through and need that fix, you’ll buy whatever I got.” Thanking him for his wisdom, I left. But it got me thinking. Could this kind of logic influence health care and what motivates us?
For more than 15 years I’ve been helping health care systems large and small lower costs, improve margins, enhance revenue and drive waste out of their facilities. Generally, the results have been very good and have made a significant difference for these organizations. But what if they’re not making a sustainable difference? What if we’re not willing to confront the true problem?
In the complex business of health care in the U.S. we don’t really even understand the cost of providing the services we offer let alone the profitability. We also don’t do much to control variations in practices that may influence outcomes even when we could measure the impact of those choices.
A conversation with a client some years ago revolved around the cost associated with the 12 or so liver transplants they performed annually. When looking at their cost and outcomes, it was 30% higher than a regionally accessible academic medical center. Quality wasn’t bad mind you, but it could have been better because the organization wasn’t doing enough procedures to be “really efficient and effective.” The hospital’s administration argued that while this may be the case, the revenue was highly favorable and thus, even with the higher cost it was still viewed as a very profitable procedure. Just because you can do a liver transplant I argued, doesn’t mean you should.
Similarly, a recent peer-reviewed journal article reported a much higher cost and mortality rate associated with the treatment of sepsis at facilities seeing fewer than 200 cases per year, as compared to facilities accustomed to recognizing and patients at higher risk. In the review of the data it was noted that some hospitals, particularly rural and community-based facilities, had a tendency to delay aggressive treatment and an even longer delay in appropriate transfer to a more capable setting. While not addressing specifically the motivation to keep the patients in their facility, I can’t help but wonder if a mark on their record or the cost of transferring the patient helped play a role in the decisions being made.
Going back to the original observation of outcomes driving behavior instead of profit, what might it look like if we start to change provider behaviors, simply by not offering so many choices, particularly when clinical evidence shows they have no discernible effect on a patient’s outcome?
As an example, take what we know about manufactured, brand name antibiotic bone cement. Studies show that in very few cases does it improve outcomes, but we do know it’s three to four times more expensive than its non-antibiotic counterpart. What if the only option available was a generic, non-antibiotic cement? If antibiotics are needed, a call to the pharmacy to provide the generic equivalent to mix with the cement is a well-documented and accepted practice.
What if we decided we’re going to standardize on one vendor for GI products in the endoscopy lab? The same for bare metal stents, drug-eluding stents and cardiac rhythm management systems? The thought of such radical changes scares most hospital executive teams, but if executed correctly, with the appropriate messaging and a comprehensive, sustainable strategy to change the culture of the organization, and effectively supporting physicians in a more comprehensive way it can be accomplished.
To effectively make a change that motivates and incentivizes the right behavior, it takes bold leadership, a culture committed to doing the very best and a willingness to change along the way.
About the author. In his role at Vizient, Craig Tangeman partners with leading organizations to facilitate discussion between executives, clinicians and front line staff to highlight the stress points and challenges in quality and cost and connects them with knowledge, solutions and expertise that accelerate performance. Through numerous dynamic and challenging roles in the health care space, he has leveraged 25 years of clinical, performance improvement, supply chain and operational knowledge to bring exciting, robust and complex solutions to his health care clients. As a former clinician, Tangeman brings new and innovative solutions to the medical, surgical and perioperative space that enhance the provider and patient experience as well as manage cost and improve quality. In addition to process and supply chain improvement, he has participated and led a variety of business development strategies, including physician practice development, medical clinic start-ups, hospital transfers and acquisitions.