How the health care industry competes for patients

On my drive in to work this past week I came across this:

How the health care industry competes for patients

A bus-side advertisement for a local hospital (sadly, not mine) claiming that it was “home to the city’s best transplant outcomes.” Normally I drive right by these moving billboards without paying much attention. But this time I immediately got excited, whipped out my cell phone and snapped a picture through my passenger side door window.

Why you may ask? Because, at the risk of being overly dramatic, this advertisement represents our best hope for true health care reform.

Though we don’t often think about it this way, competition is in many ways what makes America great. Competition is what has led to transformative changes in information technology. It’s largely why my new laptop is faster, more powerful, and less expensive than the laptop I bought 5 years ago when I started medical school; which in turn was faster, more powerful, and less expensive than the  laptop I bought 4 years earlier when I started college. Competition isn’t a zero-sum game. Contrary to popular belief, it doesn’t create winner and losers. Competition makes everyone better. Think about what the iPhone has done to the mobile phone industry, or what Tiger Woods did in golf.

We may not like to admit it, but doctors, clinics, and hospitals compete too. That’s the whole reason why you see advertisements like the one above. Centers are competing for patients (especially commercially-insured patients). But, if the health care industry is competitive, why hasn’t it gotten better and cheaper? Why do ten of thousands of  patients die from preventable errors and the costs of health care continue to skyrocket? The answer is the health care industry competes on all the wrong things.  Anyone who has flown a long-distance flight knows firsthand what happens when you compete on the wrong things. The airline industry competes mostly on price, not comfort or quality. As a result flights have gotten cheaper but at the expense of leg room. At the same time, flights haven’t gotten any faster (think about it: it takes the same amount of time to fly from the U.S. to Europe today as it did 20 years ago). Imagine what would happen instead if airlines competed on flight times. The industry would invest in new engine technology instead of hiring consultants to figure out how to charge for carry-on baggage. Flights would get faster (though perhaps at the cost of cheap airfare). In competition, like many things in life, you get what you ask for.

You don’t have to look far to see what the health care industry competes on. At its worst, it competes on technology (e.g., “we have the city’s highest resolution CT scanner”) or hospitality services (e.g., plasma screen TV in every room). Competing on technology has created an arms race, in which hospitals buy expensive equipment that has little proven marginal value and then overuse them in order to recover capital costs. And while patient comfort is important, competing on hospitality often comes at the expense of investments that would improve care, but aren’t as easily posted on a billboard.

Slightly better but not ideal, they compete on patient satisfaction (e.g., customer surveys), reputation (e.g., U.S. News and World Report rankings), or procedural volume (e.g., most number of heart surgeries). While these are steps in the right direction, they side step what we really care about — getting the best care possible. If we are healthy, we want to stay healthy; if we are sick, we want to get better. While having a nice television, a famous doctor, and an experienced center are all well and good, they are secondary to going to the center with the best outcomes. By competing on the wrong things, we create the messy health care system we have. We get less leg room.

Imagine a world where doctors, clinics, and hospitals measured and reported outcomes. Doctors and the organizations they worked in would be accountable for how their patients did. Consumers would compare centers against one another and vote with their feet. To get his diabetes under control, instead of going to the doctor his insurance company picked out, Mr. Jones would go the doctor with the lowest average HbA1c (three-month running average of sugar control). When Mrs. Smith is diagnosed with breast cancer, instead of going to the cancer doctor her primary care doctor knows from medical school, she would go to the cancer center with the highest 5-year cancer-free survival rates. In the static view, the best centers would get rewarded with more patients; the worst would be at risk for going out of business. In the dynamic view, every center would improve. Instead of a new CT scanner, centers would make investments that improved care. The worst centers would copy the best centers, and the best centers would innovate to be even better. We’d get the iPhone, and a better Blackberry too.

The advertisement I saw last week gives us hope of this utopia. The hospital is trying to persuade us that they are the best place to get a transplant done not because they have the nicest rooms or most high-tech operating rooms but because their patients do really well, better in fact than similar patients transplanted at other hospitals in the city. This means not only that they measure and report their outcomes, but that other centers in the area do too. That this advertisement was about transplant is not surprising. Thanks to UNOS (United Network for Organ Sharing) all transplant centers in the country are required to collect and report their outcomes. By going to this website for example, one can look up a given transplant center’s 1-yr, 3-yr and 5-yr survival rates for kidney transplants. (Equally not surprising is that since mandating reporting transplant has seen dramatic improvements in patient survival across the country.)

But transplant is the exception not the rule. For a variety of reasons (largely excuses), most fields in medicine do not report outcomes, or collect them for that matter. Most of them fly blind, not knowing how they perform relative to their peers, which leaves patients and third-party payers at a loss for real information to guide their decision-making. They continue to compete — make no mistake about that — but just on things that don’t matter.

I usually pay little attention to the ads that pass me by on the way to work. But this was one I couldn’t ignore. The sake of our health care system I hope I’m not the only one.

Shantanu Nundy is an internal medicine physician and author of Stay Healthy At Every Age: What Your Doctor Wants You to Know. He blogs at Beyond

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  • Wellescent Surgery Blog

    Although there certainly is benefit in competition being able to reduce cost and improve efficiencies, it is a bit of a stretch to identify competition as part of a utopia that achieves health care reform. Competition has existed in the US health care system for years and unfortunately the 70% higher per capita costs are what people are seeing as a result. Competition with the use of reported data is not, in of itself, the simple answer.

    When it comes to reporting performance, companies only openly report those figures that serve their interests best. This is what they will use in their marketing. If you look at competing products and services, you’ll often see that they present their information in this manner to best serve their interests. When it comes to choosing a medical provider, most patients would likely have a hard time pulling out the relevant comparative facts to make a decision.

    Getting a comprehensive view requires independent analysis from third parties who have an interest in establishing themselves as a trustworthy and impartial source. Of course such parties will require access to information to make assessments so having medical service providers present this information is certainly a first step. However, without the combination of transparent outcome reporting and impartial review, competition is simply a means to gain customers. It does not mean patients are able to directly seek out those health care providers offering the “best” care.

  • HJ

    What happens is that you can get great treatment for those things that are measured and awful treatment for those things that are not.

    Am I supposed to have a different doctor for every ailment? If so, what’s the point of primary care?

  • jenga

    If we are going to be paid entirely on outcomes, I get the nice suburb next to the outdoor parks and with the extremely high per capita income. Dr Nandy and others can pick the rest.

  • Michael F. Mirochna, MD

    Bigger Faster Stronger… that’s the deficit, not our health.

    Competition is awesome, but the rules of our game need to behave differently. The rules that govern the creation of better laptops, shoes, diapers, don’t govern healthcare…. newer isn’t always better. Competition leads to yearly “unnecessary” screening labs, like lipids, TSH, bmp, U/a’s… tests that there’s either no “screening” indication for or don’t really need to be tested every year.

    I saw the end of his name on the bus ad. Walter Payton was perhaps the best athlete or second best Chicago athlete ever. Why wouldn’t someone want to go to his Liver transplant center even if it wasn’t that good?

    You wouldn’t need endorsements if healthcare was truly about healthcare and not marketing/business. But the mammogram debate, PSA debate, any debate will never be about medicine, it will be about rationing, them (any governing body, committee, that disagrees with more is better) versus us (this version of us created by whatever lobby that will be hurt by less of that procedure, test, etc… they create the illusion of caring by inspiring fear in the “us”). Once we understand the ultimate paradox that more care isn’t ALWAYS better care, we may be able to turn the corner.

  • Ketan Patel

    I don’t understand, if i am going to go and buy a cell phone, i will have several options to choose from (handset companies + carriers), and the same case could be made for doctors, right, there are so many doctosr and so many specialties, why can’t doctors compete on price. Wouldn’t it be nice if i can go to a doctor who charges $50 an office vs my current doctor that charges $150 a visit. I think this wouldn’t even be a problem with insurance as if the doctor is in the network it will work out. And if its a cash based practice, even better. I hate the whole insurance involvement in the healthcare process.

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