HCI3 Update from the Field: Healthcare, we are often told, is different, and shouldn’t be compared to other industries. The Institute of Medicine begs to differ

Submitted by francois.debrantes@hci3.org on Thursday, September 13, 2012 - 01:30

Newtown, CT – September 14, 2012

Healthcare, we are often told, is different, and shouldn't be compared to other industries. The Institute of Medicine begs to differ – In a recent report, the IOM went to great lengths to compare healthcare to other industries and, indeed, healthcare is different. A third of what we spend doesn't improve anything, clinicians don't work in teams centered around the patient, patient safety failures abound, pricing information for episodes of care is unknown, complexity is poorly managed. What makes healthcare "different" is that contrarily to other industries, it is patently inefficient. We've argued before that one of the central reasons for these inefficiencies is that mediocre players are allowed to survive. In fact, many thrive. And they thrive because we collectively allow them to thrive. A medical specialty society claims the right to exceptionalism because what they do is so "different" and specialized, that they should continue to benefit from archaic rules that they benefit from…and they get support from a few gullible (or venal) lawmakers to have legislation introduced in their favor. A payer joyfully continues to contract for and process fee-for-service claims, all the while woefully lamenting increases in PMPM, and justifies increasing admin fees to employers by deploying ineffective disease management programs to compensate for failures in the delivery system. It simply doesn't have to be this way.

What this means to you – accompanying the IOM report is a very simple but compelling infographic. Print it and post it on your wall. If you're an employer, post it in hallways, in cafeterias, on bulletin boards and next to the water coolers. If you're a provider organization, do the same. And then do something about it. Consider pricing transparency for consumers, especially those in high deductible/high co-insurance plans. Consumer-patients should have the absolute unalienable right to get up-front pricing for an episode of medical care, by provider in their network. This exists in every other industry in which the consumer is a purchaser and there is neither a technical or regulatory reason why it can't be so in healthcare. Consider patient safety failures. Public health officials in cities like New York have a simple rating system for the adherence to standards for every single restaurant in the city, and each one of those restaurants gets a grade, which it has to publish in its window in plain view of passers-by. Why can't they protect patients the same way they protect diners? We cannot ever forget that form follows function, and function follows incentives/payment. As such, if hospitals had to post a grade on their front doors for their patient safety, they would rapidly deploy internal teams to perform root cause analyses of failures, and then structure themselves to make sure failures almost never occur. Teams and complex system management don't materialize out of thin air. They materialize because they're responding to a specific function. And that function exists because the market will reward it, or punish its absence. It's up to us to implement the market mechanisms that will ban forever this pitiful three-word excuse: healthcare is different.


Francois de Brantes
Executive Director
Health Care Incentives Improvement Institute, Inc.
w: www.hci3.org