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Monday, November 02, 2009
Mine our management talent
By Winthrop Quigley
Of the Journal
At its core, the nation's health care crisis is a manufacturing problem, not a financing problem. Congress is giving us financial reform because it can. It will take management talent to solve the manufacturing problem. Fortunately, our country is flush with management talent.
Last month I found myself speaking to several different business audiences. I made the case I always make: The health care system is so wildly inefficient and wasteful that rather than debating whether we want to pay for it with tax dollars or insurance premium dollars, the business community, which pays about 60 percent of the nation's health care bill, would be better off pushing medical providers to deliver a product worth buying.
I argued that the business people who are paying such a huge bill for health care ought to quit worrying about haggling with insurance agents and brokers over the price of coverage and start demanding that their health care spending contribute to what really matters, which is a productive work force.
I went down the list of outrages. Of the $2.4 trillion the United States will spend on health care this year, up to $325 billion will be spent on unwarranted care, according to a Thomson Reuters analysis. That includes stuff like performing diagnostic tests that really don't need to be done, prescribing brand-name drugs when generics are just as good, doing something pointless only because the patient wants it, administering antibiotics for a viral condition that won't respond to antibiotics. Up to $50 billion is lost to uncoordinated care, which occurs when the left hand doesn't know what the right hand already did. A test result that is available in Dr. A's office can't be made available to Dr. B, so Dr. B repeats the test.
Peter Orszag of the federal Office of Management and Budget said that as much as $700 billion in health care spending a year does nothing to improve health outcomes.
Half of adult patients do not receive evidence-based preventive, acute and chronic disease care. While 85 percent of American pediatricians are familiar with evidence-based guidelines for treating asthma, only 35 percent follow them.
I ended these talks by saying businesses need to lead a consumer revolt against a system that consumes billions of dollars a year without producing the healthy, productive employees that the economy needs. Companies that won't pay any other supplier for defective goods routinely accept waste and failure from their health care suppliers.
After one speech a friend of mine in the audience asked, "What exactly are we supposed to do about it?"
Here's what:
• Treatment of diabetes and its complications costs $165 billion a year, and employers lose $47 billion a year in lost work time and lost productivity to diabetes, yet only half of adult diabetics are properly monitored. Without proper monitoring, there is no proper treatment.
The city of Asheville, N.C., decided it would insist that medical providers properly monitor the city's diabetic employees and would stop using providers that didn't. Spending on diabetes monitoring and treatment increased, but total spending on health care for diabetic employees fell 58 percent.
• IBM created Web-based personal health records for its 130,000 United States-based employees. Any test result, X-ray, prescription or physician note concerning any employee's care can be made available to any provider the employee chooses by logging onto the Web site. Care improves and unnecessary testing declines.
• In Las Vegas, Nev., the Hotel Employees and Restaurant Employees International Union, which offers its members health insurance, used computer data-mining techniques to evaluate claims and grade physicians' quality of care, outcomes and cost. After the union published the grades, employees moved their business to the top-rated doctors. The union estimates it saved $43 million in two years.
• Caterpillar decided the cost of premiums was trivial compared to the cost of unhealthy employees. The company drastically reduced the employees' share of premiums if they would participate in health risk assessments. Caterpillar developed artificial intelligence techniques to predict future diseases the work force would likely develop, based on the risk factors the assessments uncovered. Then it created a risk management strategy to target the diseases that were likely to arise and those that cost a lot of money.
Caterpillar has reduced the number of employee work days lost to disability by 50 percent and has achieved three-year smoking cessation rates of 35 percent.
It's a small matter of management, which, after all, is what we pay business people to do.
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