A hundred years ago, the practice of medicine was just that: the practice of professionals specially trained to alleviate suffering and heal the sick. Doctors had a fiduciary responsibility to put the needs of their patients before their own. A small town doctor might be paid for his efforts in chickens — living or cooked.
Medicine is big business. Trillions of dollars are spent every year in the health care industrial complex that is the American health care system. It’s not really a system anyway. Everyone is not guaranteed access to care, what is paid for the care is highly variable often depending upon who is paying, and the quality of the care is more variable than the many ways for which it is reimbursed.
I awoke to this in the early 1990s. Managed care was being born, and the Clintons had entered the White House with the promise of reforming health care for the betterment of all Americans. The new first lady was to be in charge of an army of health care advisors and planners who would remake the system into one where access was certain, costs were controlled, and the quality of care would improve. Hearing this I thought, “I better head to business school.” So I did.
On May 15, 1993, I received my master’s degree from the University of Houston Executive MBA Program and soon was working on strategic planning for the massive academic health care delivery system whose faculty I was on.
It became very clear, very fast that medicine was not following any of the principles I had committed to memory in my strategic planning class. Chief among those was the Michael Porter four-box model of strategic planning in which every company was either a broad market or niche competitor that chose a product differentiation strategy of high quality and associated higher prices, or a low-cost leader that competed on price. Did medicine obey these rules?
Not a chance.
I was working at a major academic center. By definition, it was competing on a product differentiation .. niche market strategy. It was a cancer center. It was not seeking patients needing heart transplants. Nonetheless, for a variety of historical reasons, it had thrown its front doors wide open to every patient with cancer wishing to be seen, whether or not they could be helped by the faculty or whether or not they could further the faculty’s research through participation in a clinical trial. In other words, its stated strategy, like that of many academic centers was Tiffany & Co., but it behaved like Walmart.
These academic centers continued to grow. Their indirect costs (buildings and people) grew, and thus the need for greater patient volumes was constant.
I was leading a strategic planning effort when no one for whom I was working wanted to plan anything.
I had received a business degree but was being largely ignored by people who had no idea that they were running a business.
They do now. For like many academic centers, the one for which I worked ran into some serious financial shortfalls along the way, although it has recovered.
What does this have to do with health care reform? Everything.
Until academic centers right size their faculties, staffs and physical plants, they will constantly push to grow their volumes. This will put them in competition with private practitioners who are also developing ways to curtail costs and maximize profit. There is a place for the academic center — research, training and patient care, too, but not everyone needs to go to one.
A major academic cancer center is not needed to care for patients with routine common cancers — if that care can be obtained in communities. Many centers are developing community-based centers to do just that. But then they have to shrink their main campuses and move routine care to sites where overhead is lower because education and research are done only at the mothership.
Such a system would get all patients the access they need at reasonable prices due to controlling of costs — mostly indirect costs. Quality in one location would be measured differently than quality at another. But in all locations, the number one metric of quality is outcome — not free parking, polite staff, the latest magazines or a Starbucks in the lobby. Those extras are fine, but let’s get back to first principles and make note of true measures of quality. Those measures ought to be available to all patients on a website so people can shop for their care as easily as they shop for a cell phone while knowing as much about their care as they do about that cell phone.
It’s just common sense. And you didn’t have to go to business school to learn it.
Leonard Zwelling is an internal medicine physician and can be reached at his self-titled site, Dr. Len Zwelling.
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