Tom Pyzdek

Let’s be honest, America’s healthcare non-system has its problems. Let’s not quibble over whether or not it is better than socialized systems. For one thing, the demand side is already socialized. Nearly 90% of the cost of healthcare is paid for by third parties, either the insurance company or a government program like Medicare or Medicaid. When a person doesn’t have to bear the cost of the product or service they receive, whatever the system is, it isn’t Capitalism. The supply side however, is pretty much free, at least in the sense that the patient has free access to whatever services and medications their primary care physicians prescribe. The physician doesn’t pay for it; the patient doesn’t pay for it. How about a CT Scan for that pain you’ve had for the past couple of days? Why not? You’re not paying for it!

Exactly what to call this arrangement escapes me. I think there’s plenty of ammo here for a lively political debate where both sides can point fingers at the failings of the other side. There’s plenty of blame to go around. However, it’s not my purpose to examine the whole healthcare issue in this single column. Instead, I’d like to discuss the impact of the current ridiculous situation on the field I’ve spent a lifetime in: quality.

Once upon a time I was working with hospitals trying to improve quality. I assume that we can all agree that this is a worthwhile effort. After all, there is little argument that there is room for improvement. The 1999 report “To Err is Human” by the Institute of Medicine estimated that medical mistakes kill about a jumbo-jet full of people each and every day, and subsequent studies by other groups have shown this to be a low estimate. Anyway, I was lucky enough to work with groups of dedicated healthcare professionals who were able to make significant improvements in areas such as reduced infections, reduction of unnecessary c-sections, faster response times, etc.. The result was a reduction in the average length of stay, fewer readmissions, and other improvements that patients and their families were happy about. One of the most enthusiastic of those working on quality improvement was a young man who I will call Rob. Rob had a great deal of experience in all aspects of hospital administration and soon found himself appointed as administrator of a 500 bed medical center. All of us who had worked with Rob were delighted and we looked forward to an expansion of the quality improvement work Rob had championed when he was in middle-management.

For a while, that’s exactly what we got. Rob’s leadership support began making big dents in chronic problems that were costly in terms of unnecessary patient suffering as well as in waste due to preventable problems. Thanks to Rob I was able to attend meetings with the hospital board of directors, where Rob arranged to have quality improvement teams present their remarkable results to apparently enthusiastic board members.

Soon, however, the atmosphere at these meetings began to change. The chairman of the board, also the president of the bank which held most of the hospital’s debt, pointed out to Rob that the reduced patient-days, lower number of c-sections, reduced readmissions, etc. were cutting into the hospital’s revenue stream. He pointed out the obvious: private and government insurance company money was available to pay for treating a medical mistake, there was no way to know if many c-sections were necessary or not, a readmission paid the same as a first admission. In short, quality improvement was costing the hospital money.

Rob wasn’t blind to the implications. If he couldn’t get revenues up, he would be replaced. Furthermore, in addition to the pressure from the board, physicians were also grumbling about the impact of improved quality on their incomes. Quality was nice to talk about, but when it came to actually giving up the added income, well, that was another story. Rob had a simple choice: follow his conscience and lose his job, or return to business as usual. Soon the quality improvement activities were reduced to a few token people. Gradually, the improvements came undone. Rob eventually lost his job anyway, but the message was clear enough that his successors had no difficulty figuring it out.

In typical buyer/seller situations the problems would be resolved by competition. If one manufacturer’s television set isn’t as good as another the word will spread and people will vote with their dollars for the better value. However, try finding out about the problems at your local hospitals. Or about your physician’s performance relative to others in your area. I’ve tried. And while I’ve discovered some sources of information, the data seems skimpy to me and, shall we say, sanitized. I don’t see the kind of honest customer commentary I see in places like Amazon.com. I suspect there are forces at work making the world work this way.

To summarize: based on personal experience I can tell you that the quality tools that work with other industries work just as well in healthcare. This is no surprise, really. Healthcare has processes, and our tools help people rapidly improve processes. Quality healthcare can be as easily judged by healthcare consumers as by consumers of other services, and our tools help people rapidly improve quality. We can help remove waste from healthcare value streams as surely as we can from any other value streams.

But the missing element is the incentive to improve forced upon other industries by competition and easy access to information. In other industries, customers decide where to spend their own money and have to live with the costs and consequences of their decisions. They have access to frank and open assessments of others about their experiences with a particular supplier and the products and services they provide. They are free to move to a new supplier easily if they decide it is in their best interest to do so. None of these things hold true in healthcare. If we truly want to improve healthcare, in the sense of that we get higher quality service at a lower cost, then we need to address the root causes of the problem. Look at the proposed solutions to the healthcare crisis through this lens and ask yourself if they are treating the underlying disease or making it even worse.

Inspired by Some questions not asked in health care debate – BizTimes.

Like many, I am concerned about healthcare in America. The above story outlines a number of issues with our system

• A medical error rate 5 to 9 times higher than some other countries
• Out of control healthcare costs

The author discusses the fact that Six Sigma has only recently been introduced in American healthcare, and then only on a limited basis. He details a horror story involving his father’s care and decries the fact that such stories abound. From this he concludes that the solution to these problems is…more government involvement in American healthcare.

I’m sorry, but I don’t get the connection. I agree with the above facts and would dearly love to have American healthcare professionals use more process excellence tools, including Six Sigma, Lean, and quality improvement. But I don’t see how more government address the root cause of our problems. In fact, I see little or not effort made to drill down to the root cause of the problems in healthcare. Let me make a stab at it.

• I believe that government programs have contributed to the problem by helping create a disconnect between the patient and the healthcare provider.
• I believe that the current system limits the choice of patients as to who will provide their care.
• I believe that patients do not have access to the information they need to adequately assess the quality of their healthcare providers.
• I believe that special interests (e.g., pharmaceutical companies, medical device companies, insurance companies, professional groups, etc.) manipulate government programs and limit access to information for their own advantage.
• I believe that political groups use the fear of illness to manipulate voters for the interests of the politicians.
• I believe that more government control of healthcare would exacerbate the above problems.

Solutions

I believe that solutions that address the disconnect between the person who provides the healthcare and the person who receives and pays for it will ultimately be needed to fix the problem. This is, I believe, the root cause of our current problems. An ideal solution would be one that:

• Provides patients with complete, up to date, and accurate information on their provider. This would include information on outcomes, error rates, complaints, etc.
• Allows patients to choose their care provider.
• Provides patients with price data in advance.
• Protects patients from paying for poor quality care, including any problems caused by misdiagnoses, complications from poorly done procedures, infections due to poor practices, etc.
• Requires patients to pay at least some of the cost of their care directly to the provider.

In other words, I believe more freedom and more responsibility for patients would address the core problem of the current system. I believe that when patients are free to choose their care provider, have complete information on quality and price, and have a personal interest in the cost of their care, they will make better choices than faceless and nameless bureaucrats employed by insurance companies or the government.

Not to lay the whole blame on government. I believe that the process and quality improvement professions have a great deal to offer the healthcare profession in the form of methods, tools, techniques and systems to improve. But healthcare professionals are overly resistant to such suggestions, at least party because of parochialism and perverse incentives. If patients were provided the information they need to make the right choices, the ability to make these choices, and the financial incentive to do so, intransigent providers would either improve or pay the price. Ultimately, this would drive the demand for the services of quality and process improvement professionals. It’s what did it for every other industry in the world.

This is a great article showing how lean is being used to reduce healthcare costs. The article points out that small costs add up. True. It’s the target of Kaizen, actually. We in the Six Sigma community often make the mistake of looking for projects that are “big hitters” and fail to recognize that a lot of small hits add up to runs on the scoreboard too!