General Hospital is credited by the Guinness Book of World Records as the longest-running American soap opera currently in production (according to Wikipedia). What a perfect metaphor this is for the real hospital industry, which is facing more drama than ever.
This week I visited two hospitals, one a very large and well-known academic medical center, the other a very small community hospital. Fortunately, neither visit was as a patient. In both cases I was there to talk about healthcare information technology and the hospitals’ respective strategies for innovation in that general area.
It is always really interesting to talk with hospitals about how they want to use technology to enhance their operations. There is an inherent tension between the desire to, on the one hand, do the right thing for patients by continuously improving quality of care and, on the other hand, to respond to the fiscal challenge that sometimes doing the “right thing” might just cost more or at least take a while to pay off. Often times the decision to provide better care can result in hospitals actually losing money, because it means that patients need fewer services. That is the very definition of irony. Can you imagine a world where a bank lost money every time they reduced the number of teller visits? In such a world, there would be no ATMs. But in the hospital, if you foster preventive care to reduce the number of patient visits, you might actually cut your bottom line. They hate that when that happens.
The CEO of one of the hospitals I visited said that he fully recognizes that the implementation of certain technologies, such as electronic medical records, may well be a very high cost investment in quality that will never save them any money, but that this was an acceptable price to pay since they are committed to improving patient care as a matter of culture. In the very next breath he dismissed another technological advancement proposed because, “it wouldn’t save us any money.” Thank goodness that hospital has a strong psychiatric department–those in charge are going to need it to treat their schizophrenia as technology becomes more and more pervasive in the delivery of care.
Economic pressures are bearing down on hospitals in the form of reductions in reimbursement, increased responsibility to pay for re-admissions within 30 days, and regulations that withhold payment when patient safety errors are committed, among many other things, including increasing labor costs for hard to find healthcare workers. Technology is a large part of the answer to creating more efficiency, greater productivity, and increased patient safety. However, the technology that most hospitals want to buy first is that which helps them speed up throughput (increase the number of patients they can see), improve billing and capture lost revenue, as that is a far easier investment to make.
Improving productivity, efficiency and processes that lead to higher quality care often requires a significant cultural shift in a hospital organization, requiring physicians and nurses to change the way they have practiced medicine in order to optimize outcomes, both clinical and financial. It is one thing to use continuous process improvement and monitoring/tracking technologies to continuously improve a manufacturing production line. It is quite another thing to use those same concepts to tell doctors they could improve how they practice medicine. Sometimes they just don’t appreciate the input (warning: mild understatement). It is not that they don’t want to do the best for their patients (they usually do); it is that they are taught that what they do is art, not algorithm. When someone from the outside suggests that there is technology that could sift through the data about their patients and determine how they should change what they do to improve care, they can get a little sensitive. I have heard both physicians and nurses say, “I don’t need to be told about my data…I know how to do what I do best.” In contrast, I once worked for a doctor who told me, “By definition 50% of all doctors are worse than average.” Remarkably, no clinician wants to admit that they are in that bottom part of the curve.
Fortunately there are also very enlightened clinicians out there in the world, as there are at the two facilities I visited. Each organization is investing in technologies that will, in the long and short run, make a difference in both quality and cost. Getting to the concept of value is key to success in the evolution of our healthcare system. Hospitals must commit themselves to providing a product that delivers bang for the buck. It is a major cultural shift for them to think about themselves this way, but some are going there with gusto. It is these organizations that will thrive as our healthcare world turns.
There are nearly 6000 total hospitals in the U.S. today and hospitals (as a group) are the 2nd largest private sector employer in the U.S. Yet nearly 30% of them can claim a negative operating margin according to the American Hospital Association; in other words, they lose money every day. That’s no way to run a business. If this were manufacturing, that would be Flint, Michigan. If real hospitals are going to endure the lengthy run that General Hospital has enjoyed, they are going to have to truly embrace technology and tried and true business productivity techniques to survive and flourish.
Oh, and on the lighter side, I found this absolutely hilarious comedy about doctors and hospitals from comedian Brian Regan that I thought I’d share as I head out for a brief vacation. Enjoy!