Archivi delle etichette: Healthcare reform

Integrated health and post modern medicine @Medici_Manager

For many years, I have advocated an integrated approach to medicine and health. By integrated medicine, I mean the kind of care that integrates the best of new technology and current knowledge with ancient wisdom. More specifically, perhaps, it is an approach to care of the patient which includes mind, body and spirit and which maximizes the potential of conventional, lifestyle and complementary approaches in the process of healing. Integrated health, on the other hand, represents an approach to individual and population health which respects and includes all health-related areas, such as the physical and social environment, education, agriculture and architecture. I know that this is a somewhat wider definition of integration than commonly used, but I want to argue that a successful health service needs to embrace this broader and more complex concept of integration.

I hasten to say that the point of this article is not to confront accepted medical wisdom, but merely to suggest that there is a case for reaching beyond it, and that is to explore how we might be able better to align the ambitions of patient and clinician within medicine and how we might maximize the ability of every professional and citizen to create better personal and community health outside of it.

Exactly 30 years ago, in a speech to the British Medical Association (BMA),1 I quoted George Engel, who wrote ‘A Modern Science of medicine still tends to be based on the notion of the body as a machine, of disease as the consequence of breakdown of the machine, and of the doctor’s task as repair of the machine’.

I fear that what was true 30 years ago remains equally true today. It is why for a rather long time now, and not without criticism from some quarters, I have been attempting to suggest that it might be beneficial to develop truly integrated systems of providing health and care. That is, not simply to treat the symptoms of disease, but actively to create health and to put the patient at the heart of this process by incorporating those core human elements of mind, body and spirit. To achieve this – and there are many who support this – I would suggest that medicine may sometimes need to become less literal in its interpretation of patient needs and more inclusive in terms of what treatment may be required – in other words, to understand how symptoms may often simply be a metaphor for underlying disease and unhappiness. It is also vital, it seems to me, to recognize that treatment may often be effective because of its symbolic meaning to the patient through effects that are now being increasingly understood by the science of psychoneuroimmunology.

In short, I suspect it will always be a struggle if we continue with an over-emphasis on mechanistic and technological approaches. Please do not misunderstand me – the best of science and technology constantly needs to be harnessed and deployed to obtain the best effect – but, I would suggest, not at the expense of the human elements. These, after all, provide the whole rationale for medicine and health care going back to our roots.

The importance of those human elements is becoming all too apparent in contemporary medical science. Sir Michael Marmot has shown convincingly2 that the health of employees is related to the extent to which they feel empowered to fulfil their role, according to their own judgement. Professor Blackburn, the Nobel Medicine Prize winner, has provided evidence3 indicating that high levels of stress can result in shortened telomeres, the critical elements which bind chromosomes together. This in turn quickens the ageing process. With research of this kind, we can no longer continue to see mind and body as separate and occasionally interacting entities. That is because they are one and the same thing. Our scientific and therapeutic approach now needs, surely, to advance in a way that encourages and embraces a new understanding between patient hopes, perspective and belief and the workings of his or her body.

This whole area of work – what I can only describe as an ‘integrated approach’ in the UK, or ‘integrative’ in the USA – takes what we know about appropriate conventional, lifestyle and complementary approaches and applies them to patients. I cannot help feeling that we need to be prepared to offer the patient the ‘best of all worlds’ according to a patient’s wishes, beliefs and needs. This requires modern science to understand, value and use patient perspective and belief rather than seeking to exclude them – something which, in the view of many professionals in the field, occurs too often and too readily.

In the individual encounter between patient and clinician, we are led to believe that there is currently a ‘crisis in caring’. I am sure that this is not the case in many or most such encounters. Nevertheless, I am equally sure that there is much more that can be done to foster and enhance those age-old qualities of human kindness and compassion. The Media is full of instances where these have been palpably lacking, and I have heard of others speaking of the need to restore urgently a climate of care and compassion at the heart of our health services.

It is particularly surprising that so many appear to think there is a gap here, when we are told that those so called ‘soft skills’ of caring can have a significant impact on the quality and pace of recovery among patients. This inevitably raises the question: ‘Are we doing enough to ensure there is sufficient empathy and compassion instilled throughout training in medical schools and in later hospital training?’ Should we not, perhaps, be doing more to enhance the length of contact and continuity, when it comes to relationships between professionals and patients? It appears to many inside and outside the health-care professions that our capacity for providing ‘the human touch’ has steadily decreased as science and technology have improved. Surely, it should not be a case of ‘either/or’? Thus, it seems to me that good medicine should aim for a better balance between what science and technology may demand and what patients may actually want and need.

One senior professional said to me that what seems to go missing all too easily is the art of thoroughly understanding the patient’s narrative. He said that we need to equip our health professionals with skills (and a desire) to listen and honour what is being said, and – importantly – what is not said to them. Only in this way can they develop a thorough understanding of the patient’s story. This understanding is necessary to develop healing empathy and help the patient find their own particular path towards better health. This should not only help the patient, but should also enable more health professionals to connect and engage in a much more meaningful and professionally satisfying way.

If, however, we are to create such a culture of better care, then we cannot depend forever upon ‘heroes’ at the frontline. Better care and compassion require systems which support the caring ambition of every health service organization, every health service leader and every clinician. If we really want to change things, then we must better support and encourage those organizations, leaders and frontline clinicians, who are fully committed to going the last mile in the care of their patients.

But things should not begin and end with good professional care of the individual patient. There must surely be an enormous potential for more people to become concerned and caring of each other outside this professional encounter? In Burnley, where health inequalities have lowered life-expectancy to among the worst levels in this country, up to a dozen of my Charities are working in partnership with local organizations trying to make a difference for the better in the fields of health, the built and natural environment, the Arts, education and business. Why? Because we know that alienated and uncaring communities adversely affect the health and wellbeing of those living in them.4,5 Conversely, current evidence suggests that if you try to tackle some of these admittedly deep-seated problems, not only do you begin to witness improvements in health and other inequalities, but this can lead to improvements in the overall cost-efficiency and effectiveness of local services.6

In summary then, we are beginning to know more about the causes of unhappiness and poor health. We also know the importance of the patient/professional relationship and the therapeutic potential of relationships in general. There are ‘a priori’ reasons to suspect that we could improve health through a range of better integrated interventions and programmes. We now desperately need to produce more of the right kind of research to strengthen these hypotheses.

This wider role for medicine is supported by traditional wisdom which sees illness as a disorder of the whole person, involving not only the patient’s body, but his mind, his self image, his dependence on the physical and social environment, as well as his relation to the cosmos. Perhaps we should also invoke ancient wisdom in dealing with this model of disease. In that same speech to the BMA in 1982, I quoted Paracelsus, the 16th century healer, who said that the doctor ‘Must be intimate with Nature. He must have the intuition which is necessary to understand the patient, his body, his disease. He must have the ‘feel’ and the ‘touch’ which make it possible for him to be in sympathetic communication with the patient’s spirits.’ Paracelsus also believed that the good doctor’s therapeutic success largely depends on his ability to inspire the patient with confidence and to mobilize his will to health. These ideas, which were close to heresy in 1982, appear to be more acceptable to some in 2012. Postmodern medicine, I believe, will need to embrace them in its science and alongside its technology if it is to maximize its impact and remain sustainable.

Clinicians, of course, have the huge responsibility of taking these things seriously and finding a way forward that is best for patients and for local populations. Surely, there can never have been a better time for all clinicians to emphasize the value of caring, continuing relationships and of adopting a more holistic approach to health and disease – a human approach, if you like, which maximizes the potential of the physical and social environment, so that healing and better health can thrive?

Now, surely, is the time for us all to concentrate some real effort in these areas. We will need to do so by deploying approaches which, at their heart, retain the crucial bedrock elements of traditional and modern civilized health care – of empathy, compassion and the enduring values of the caring professions.

Approaching Illness as a Team @Medici_Manager @Doctor4Quality

The New York Times

Opinion Twitter Logo.

The Cleveland Clinic, long considered a premier medical system, is gaining new renown for innovation in improving the quality of care while holding down costs.

For Op-Ed, follow@nytopinion and to hear from the editorial page editor, Andrew Rosenthal, follow@andyr

In its most fundamental reform, the clinic in the past five years has created 18 “institutes” that use multidisciplinary teams to treat diseases or problems involving a particular organ system, say the heart or the brain, instead of having patients bounce from one specialist to another on their own.

The Neurological Institute, for example, provides both inpatient or outpatient care for those with strokes and brain tumors, as well as those with epilepsy, multiple sclerosis, depression and sleep disorders, among other conditions.

On a recent visit, we observed one such team, consisting of a neurosurgeon, a neurologist, a neuroradiologist, a neurologist with advanced training in intensive care, a physical and rehabilitation doctor, a medical resident, a physical therapist and a nurse. As they made rounds from patient to patient, they had a portable computer that displayed electronic medical records so that the whole team could see how the patient was doing and plan the course of care for the day.

This team approach can improve the quality of care because all the experts are involved in deciding the best treatment option, which can save time and money. The neurological team, by consensus, has been better able to determine which acute stroke patientsneed a risky and expensive treatment that involves threading a catheter through an artery in the leg up into the brain to destroy a clot. It cut the use of that treatment in half, reducing costs and deaths and improving outcomes.

The Cleveland Clinic has strong leverage to drive such reforms because its staff physicians are salaried and are granted only one-year contracts and subjected to annual performance reviews. Those reviews apply measures of quality, like patient improvement, patient satisfaction and cost reductions. It raises the pay of those who get high marks, reduces the pay of poor performers and even terminates some doctors who fall short. This approach could become more widespread as more hospitals and doctors move toward the salary-based model.

Data analysis to evaluate how well treatments work is also a big part of the medical practice. For instance, the clinic analyzed outcomes for heart surgery patients and found that those who had received blood transfusions during surgery had higher complication rates afterward and a lower long-term survival rate. As a result, it has adopted strict guidelines that limit the use of transfusions.

Such judgments about a treatment’s effectiveness are made by doctors, not by financial administrators, so they tend to be accepted. One analysis found that suturing could be done as well with a $5 silk stitch as with a $400 staple, leading to a big drop in the use of the staples. At the same time, the clinic has also carried out simpler reforms, like improving sterile conditions, which has reduced catheter-related bloodstream infections by more than 40 percent and urinary tract infections by 50 percent. All this has happened in a remarkably short time. Patients seem to like the treatment they get. A federal government survey of patient opinion last fall found that 80 percent of the patients gave the Cleveland Clinic a high rating over all and 84 percent would recommend it to others, well above the state and national averages in the 69 percent to 71 percent range.

Still, many patients are clearly unhappy. A series this year about confusing medical bills and unexpectedly high charges by The Plain Dealer of Cleveland elicited hundreds of patients’ complaints mostly directed against the clinic, because it had reclassified off-campus physician practices and health centers as hospital outpatient facilities and tacked on a “facility fee” for services previously billed at lower doctor’s office rates. The clinic says the added fees are justified because it provides better quality controls and health information technologies in its outpatient units than that available in a typical doctor’s office.

Medicare’s spending per patient at the clinic for an episode of illness that requires hospitalization is below the national median, suggesting that the clinic’s cost-cutting efforts are working. The University HealthSystem Consortium, an alliance of the nation’s leading nonprofit academic medical centers and teaching hospitals, gave the clinic one of its “rising star” awards in September for significant improvements over the previous year in quality, patient safety and clinical effectiveness, an indication that its quality efforts are taking hold.

The Cleveland Clinic’s progress in restructuring itself, said Michael Porter, a Harvard professor who analyzes health care delivery and organizational change, is “light speed” compared with other institutions. The clinic is “a model of where we need to go,” he said, “Not perfect, not done, but far along.”

A version of this editorial appeared in print on December 25, 2012, on page A26 of the New York edition with the headline: Approaching Illness as a Team.

What will health care look like in twenty years? @profchrisham @Medici_Manager

Chris Ham, Chief Executive at The King’s Fund, shares what he hopes the health care system will look like in twenty years time. This includes a service much closer to people’s homes, less reliance on hospitals and care homes which will be used for what they are intended – specialist care for people with acute needs –and a system which is much more joined-up and integrated.

Per salvare il SSN, i politici devono dire ciò che non possono dire! @Medici_Manager @wricciardi

Come in Gran Bretagna, i politici devono dire “l’indicibile” per salvare il SSN: dobbiamo ristrutturate i nostri servizi per malati acuti. In sostanza, bisogna chiudere ospedali!

To fix the NHS politicians must say the unsayable

We need to restructure our acute healthcare services, which will involve district general hospital closures

Up to 50pc of deaths at Mid-Staffs NHS trust on Care Pathway

By Philip Lee

For a government to aim for constant popularity in a world of 24-hour news is surely pointless, especially when it comes to the NHS. The religiosity surrounding our health system, graphically displayed in the Olympics opening ceremony, has long prevented honest discussion of its shortcomings. Our continual blind faith in a system designed in the shadow of war to serve a stoic nation is perplexing — and has cost lives.

The realities on the ground, along with the poor clinical outcomes when compared with other equivalent countries, can no longer be ignored. The NHS has been showing signs of terminal illness for some time. Yet hospitals that are inadequate continue to be maintained. Any politicians who think that the current system, including the financing model and physical structures, can be sustained in the longer term, under the weight of increasing clinical demands, are deluding themselves.

Indeed, by doing so, they risk further undermining the trust of an increasingly cynical public. Continuing to pay lip service to failed systems is just not acceptable. Neither is a short-termist and timid five-year plan. It is high time that politicians told the truth about the NHS. The system we have is not the envy of the Western world and outcomes are not as good as they should be. It cannot be right that criticism of the status quo is a political taboo. Professional politicians should cease ducking the issue just because it fails to deliver short-term electoral gain.

Lives are worth more than votes. The last Labour government attempted to prop up the NHS by increasing spending significantly. Such financial largesse required the support of Middle England. As measurement was popular with the centre Right, targets were introduced to “guarantee” better care.

The bitter irony for the people affected by the Mid Staffordshire scandal is that this target culture created the environment in which managers chased financial goals at the expense of humane care. Instead of looking for figures to fill election pledge cards, the last administration should have been concentrating on changing the NHS for the longer term. Sadly, it didn’t. A feel-good solution was delivered that left us all feeling worse.

But we have no choice. Those of us who want to protect the fundamental principle of access for all need to make the case. The financing of health care also needs reform. I believe that the responsibility for funding should be moving slowly from the state to the individual. Technological advances, ageing, obesity and an increased appetite for medical treatments all load costs on to the taxpayer. New approaches to these challenges often fit poorly within old systems.

I want people to be free to choose any lifestyle they wish, while understanding that their choices may lead to health care costs later in life. I want to be able to give more to the truly deserving because we have spent less on those able to provide for themselves. I also want the very best 21st-century health care to be delivered in safe and appropriate clinical environments.

If politicians like me do not persuade the public of the need for these changes, then the vulnerable in our society will be put at risk. In return for this candour, the British people must accept this new reality. It is an untenable position for the public to demand politicians to tell the truth, only then to vote them out because what they’ve said is unpopular. If you really want a better NHS, then you will have to find the courage to vote for it.

Dr Phillip Lee is Conservative MP for Bracknell and a practising GP

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I partiti e la sanità. Che delusione quei programmi scritti solo per vincere @Medici_Manager

Spero di sbagliare e di essere contraddetto dai fatti. Ma questa è la dolorosa impressione che ho tratto dalla lettura delle banalità contenute nelle linee programmatiche sulla sanità presentate dai principali partiti in vista delle prossime elezioni

18 FEB – Nel suo capolavoro “Le parole e le cose” Michel Foucault sussume nella figura letteraria del Don Chisciotte di Cervantes il punto di passaggio e di crisi tra due epoche, quella rinascimentale e quella classica, caratterizzate da due paradigmi concettuali o epistemi (attraverso i quali si rende possibile il costituirsi dei diversi oggetti del sapere) radicalmente diverse tra loro. Nelle avventure (ma sarebbe meglio dire disavventure perché in esse si scambia il ronzino per un destriero e il mulino a vento per un mostro da infilzare a passo di carica) del Don Chisciotte – il cui scopo è di verificare se tra le parole scritte sui libri cavallereschi e le cose del mondo ci sia corrispondenza – Foucault intravede la crisi e il declino della semiologia basata sulle similitudini, sulle corrispondenze, tipica del periodo rinascimentale.

Nelle parole dell’autore “Don Chisciotte traccia il negativo del rinascimento; la scrittura ha cessato di essere la prosa del mondo; le somiglianze e i segni hanno sciolto la loro antica intesa…; le cose restano ostinatamente nella loro ironica identità; sono soltanto quello che sono; le parole vagano all’avventura, prive di contenuto, prive di somiglianza che le riempia; non contrassegnano più le cose; dormono tra le pagine dei libri in mezzo alla polvere”

Bene! E’ questa la sensazione che si può trarre dalla lettura degli striminziti programmi sulla sanità dei diversi schieramenti (ultimo quello del Professor Monti che sabato scorso ha presentato il suo programma).
Nelle poche pagine e nei pochi punti dedicati dai principali partiti alla principale componente del nostro Welfare, che vale oltre 130 miliardi di euro tra finanziamento pubblico e spesa privata, si può percepire la stessa lontananza tra parole e cose o meglio si capisce subito in modo “chiaro” e “distinto” che le parole servono per non indicare; esse acquistano e mantengono quella banalità ed equidistanza da tutto (valorizzazione del merito e delle professionalità, rispetto delle regole, potenziamento smart del servizio pubblico, corretto rapporto pubblico/privato) che non può scontentare nessuno, perché difficilmente qualunque soggetto senziente potrebbe non condividerle. In caso contrario, se le parole tornassero ad indicare le cose che abbiamo di fronte e che potremmo chiamare problemi, troppo alto sarebbe il rischio di perdere consensi in questa fase ormai “liquefatta” della nostra società. Le parole dunque devono suonare a vuoto; essere dei “simulacri” che demarcano la loro incorreggibile “differenza” rispetto all’oggetto a cui rimandano; significanti senza significato, artifici verbali ispirati alle sole regole del bob ton verso tutti i soggetti del campo; effetti senza causa.

Eppure il dramma della nostra società è ormai evidente nella crudezza dei numeri, nei confronti dei quali ogni commento è impotente ed afasico. Siamo di fronte a una vera “apocalisse culturale” e morale per abusare di una espressione di De Martino e i partiti non riescono a trarne le evidenti conseguenze. I disoccupati e inoccupati hanno raggiunto la cifra record di 4 milioni di unità; il 10% della popolazione ha sottratto immani ricchezze al medio e piccolo ceto ormai impoverito; l’Italia è scesa al 72° posto nella classifica mondiale della corruzione, pubblicata nel rapporto annuale di Transparency International. Il business della bustarella tricolore – calcola il Servizio anti-corruzione e trasparenza del ministero alla Funzione pubblica – muove ormai un giro d’affari da 60 miliardi l’anno con cui si potrebbero comperare la Fiat. l’Enel e Unicredit, insieme (La Repubblica). Il “nero” fattura 150 miliardi di euro l’anno, e gran parte della economia del paese è ormai ostaggio della criminalità delle cosche e dei colletti bianchi, oggi chiamati manager, delle industrie private e pubbliche, senza distinzione alcuna.

Gran parte di questi illeciti vede nella sanità il suo terreno di coltura, il brodo in cui l’illegalità trova alimento e sostegno perché è la sanità ad assorbire l’80% dei bilanci regionali. Nulla è più sicuro e dietro ogni acquisto, dalla semplice siringa alla TAC spirale, dalla manutenzione ordinaria, alla costruzione di interi ospedali, si nasconde il sovraprezzo intollerabile della corruzione e della mazzetta al politico di turno, al partito o alla corrente di appartenenza. Lo stesso dicasi per l’attribuzione degli incarichi: vanno bene tutti, di destra o di sinistra, a condizione però che stiano al gioco di squadra e si ricordino sempre chi è che li ha nominati.

E allora, non volendosi affrontare i veri problemi che hanno ormai distrutto il nostro paese e con essa la sanità di qualità sempre peggiore, è chiaro come parlare di programmi concreti sarebbe per lo meno imbarazzante. Quello che per la politica conta è vincere; vincere ad ogni costo, promettendo tutto e il contrario di tutto, non inimicandosi nessuno (ed ecco l’esposizione di candidati-trofeo che devono garantire il voto delle categorie professionali di appartenenza), perché poi con l’accordo di tutti, i vecchi e i nuovi compagni di strada, si farà, o meglio si continuerà a fare ciò che finora si è fatto, forse con maggiore discrezione.

Spero di sbagliare, di essere contraddetto dai fatti, ma questa è la dolorosa impressione che ho tratto dalla lettura delle banalità contenute nelle linee programmatiche sulla sanità dei principali partiti.

Roberto Polillo

I programmi elettorali dei partiti per la sanità @Pqr9ap @Medici_Manager @drsilenzi

l Giornale Italiano di Nefrologia pubblica una sintesi del programmi elettorali dei partiti in vista delle prossime elezioni politiche.

In questo sito non è necessaria la registrazione!!!!!!!!!

10 macro trends that will shape health of the future according to Rockefeller Foundation @Medici_Manager @IlonaKickbusch

One of the major components of The Rockefeller Foundation’s “Dreaming the Future of Health” convening will be the consideration and discussion of the macro, health-related trends that will shape our world over the next 100 years. In advance of the convening, The Rockefeller Foundation asked select attendees and other experts to identify ten trends that may dominate the global landscape into the future. This list is the result of that “crowd-sourcing” exercise.We invite you to take a look and scroll down to share your thoughts with the Foundation.

1. Climate Change and Disasters.
The future will include increased frequency and severity of climate-related shocks, disasters and pandemics (likely with zoonotic origins). What needs to be done to better understand the health impacts of climate variability and build more resilient social and health systems to be prepared, respond and adapt?
2. The Demographic Revolution.
According to the UN, the population aged 60 years or older is estimated to be nearly 2 billion by 2050 when it will be as large as the population of children age 0-14. With this shift, there will be accompanying changes in disease patterns such as growth in non-communicable diseases and associated risk factors. What actions are needed in the context of these epidemiologic and demographic shifts? How will we address aging populations, changes in the socioeconomic composition of societies (will the middle class grow or the proportion of those at the Bottom of the Pyramid persist or expand?) and an estimated world population of 10 billion by the year 2100?
3. The rise of mega cities.
More than 50% of the world’s population currently lives in urban areas and this is expected to increase to 70% by 2050. According to the WHO, the majority of this urban population growth will occur in cities of developing countries. How can cities develop to ensure the health of all residents
4. Social and economic development converge.
The relationship among the state, citizens and business is increasingly dynamic and systems are changing. The correlation between social and economic development has been reflected in the inclusion of health in development policies and in other intersectoral approaches to health. What mechanisms will promote the convergence of national and international social policies to improve governance and solidarity and decrease economic, social and health inequities?
5. Frontiers of public sector reform.
In the future, there will be increased interaction by and amongst institutions in various sectors as well as heightened informality within global labor. Silos will be broken down leading to a deeper complexity of mixed (public and private) systems – particularly in the health and education sectors. What will be the health effects of this complexity and lack of appropriate regulatory structures? What interventions will be needed to mitigate risks and work effectively within both formal and informal systems to prevent increasing inequalities?
6. Our Social Future.
Individuals’ connectivity and access to vast information will continue to explode. Changes in the access to information and modes of communication will continue to empower citizens yet also raise major privacy concerns along with concerns of growing social isolation and exclusion. What are the new governance structures needed where the community’s health interests and expectations are explicitly represented? What effects will this complexity have on health? How can we take advantage of the benefits of increased connectivity while mitigating its risks?
7. The Budget Crunch.
What will countries and governments look like in the next century, and what do possible changes in governance mean for health? In the shorter term, how will leaders develop sound health policies in a time of austerity and limited financial resources? How can the perspectives of local communities be included?
8. Technology Races Ahead.
For example, nanotechnology may become more important than immunizations in preventing and curing disease. Health technology and real time information access offers many opportunities for treatment and prevention of disease as well as health promotion. Communication technologies will also continue to change the ways in which individuals engage with the health system and could reduce the need for hospitalization. What are the challenges and opportunities in scaling up existing interventions to take advantage of the game changing advances in science and technology that are certain to occur? How might access to information change patterns of individual self-treatment?
9. Game-changing advances in science.
Advances in scientific research, and medical science more specifically, will continue to transform the health care landscape. What will be the ground-breaking discoveries in fields of biology, immunology, virology, zoology and related fields such as ecology that will impact health for the next 100 years? What are the critical questions and threats that these fields must address to ensure well-being in the future?
10. New ways of learning.
Massive open, online courses offer new opportunities for scalable, sustainable and profitable forms of training and education. How will new technologies transform the accessibility and effectiveness of higher education and training for future health professionals and leaders?

The Future of Health – World Economic Forum @Medici_Manager @IlonaKickbusch

The future of health is being shaped by many global transformations, of which technology and connectivity are the most salient. Hence, “digital technologies and personalized medicines” was an appropriate tag line for this Annual Meeting session.

As an emerging domain – at the intersection of heath and technology – this should be viewed in two contexts:

The first one, centred on personalized technologies, is transforming the way in which patients engage with healthcare in chronic disease management settings; people in general enhance wellness independence. These are important objectives given the likely emphasis on non-communicable disease prevention and incentive-based wellness in the foreseeable future. By linking big data in the cloud with mobile applications, new engagement mechanisms and social media connectivity, a number of health endpoints can now being pursued – from safety, adherence and compliance, to improved access and healthy behaviour change.

The second emerging domain is digital health (eHealth, mHealth, tHealth and cHealth), where its context-specific applications can help achieve broader health systems goals: data management and information for policy can be transformed; e-learning can be enabled; costs and errors can be mitigated through e-solutions in healthcare settings; and transparency and efficiency can be institutionalized in health governance.

Digital health can be the single most important lever to lift heath systems out of their existing systemic problems. By linking entitlements with health data repositories, it can additionally help in the attainment of wider social objectives and universal health coverage goals, which are fast gaining traction as a policy agenda; at the international level as an umbrella post-MDG health goal and at the domestic level as a deterrent against Arab Spring type of social unrest.

The promise within these approaches underscores the need for policies to harness their potential and creates imperatives for global and domestic normative action. Recognition that this promise can only be fulfilled by leveraging the strength of technological tools, which are outside of traditional healthcare, necessitates multisectoral action and effective engagement with the private sector.

An out-of-the box domestic policy appetite needs to be generated for the establishment of an enabling environment for innovation and research. Capacity needs to be built for translating evidence into policy and taking pilots to scale. Governments need to appreciate the “business case” for investment in this area and should create enabling regulations, incentives as well as the necessary infrastructure.

Appropriate investment and partnerships can help achieve double bottom line objectives and a win-win situation for all stakeholders within and beyond the health sector.

Clinical Transformation: New Business Models for a New Era in Healthcare @Medici_Manager @helenbevan

Accenture research shows that independent physicians continue to dwindle and that those remaining will turn to subscription-based models to sustain profits and improve care.

Focus on Health-Care Costs Causes More Spending @Medici_Manager @muirgray

By David Goldhill Jan 2, 2013

In 1983, the Ronald Reagan administration enacted one of the most significant cost reforms in Medicare’s history. The prospective payment system switched inpatient hospital reimbursement from open-ended fee-for-service to fixed fees paid per diagnosis.

In theory, this would give hospitals the incentive to treat patients as quickly and economically as possible.

The new rules did drive big changes. Since 1983, the total number of days spent by Medicare patients in hospitals has fallen 40 percent, even as the number of Medicare enrollees has risen 60 percent. The average inpatient stay is now just over five days, down from 10.

But even an improvement in efficiency of such magnitude failed to slow the cost train. As the number of hospital days declined, the daily charge to Medicare rose to $1,800, from $300.

The prospective payment system is only one obvious example of a long trend. Most major developments in health care — higher doctor productivity, diagnostic scans, new pharmaceuticals, minimally invasive surgery — could be described as increasing health care’s productivity. None of these achievements has lowered prices.

Cost Fallacy

Why not? Strange as it seems, cost is only mildly relevant to the price of care. In the world of health care, cost control is based on the fallacy that there is a fixed amount of care we need. Presumably, the more efficiently it’s performed, the cheaper it will be. This ignores how providers actually respond to changes in their business. By focusing relentlessly on the cost of care, we actually drive it up.

To understand why this is inescapable, ask yourself, What would you rather pay for the items you buy: whatever price a retailer charges or a small amount — say 5 percent — above the retailer’s cost? Take your time; it’s a trick question.

The cost-based pricing seems like the better deal. We imagine going into a store, learning that the merchant paid $10 for a sweater, and buying that sweater for only $10.50. But this assumes that, once you opt for cost-based pricing, the costs will stay the same. In reality, the cost-plus-5-percent system will change the merchant’s economic incentives — so that the next sweater the store buys will “cost” far more than $10.

Imagine the impact cost-plus would have on the world’s simplest business. Your daughter sets up a lemonade stand outside your house and charges a dollar a cup. (That number just seemed right to her.) She sells 50 cups to people passing by each day.

One day the mayor comes along. He’s running for re- election, and he wants to buy a cup of lemonade every week for all 1,000 residents of the town. He doesn’t want to pay $1,000 a week, though, so he suggests paying your daughter a “fair” profit of 50 percent. He knows each cup contains about 10 cents worth of lemons and sugar, so he figures he’ll be paying 15 cents a serving.

The moment your daughter agrees to this deal, however, she will try to increase her costs, because higher costs mean bigger profits. She is better off with more expensive lemons and sugar, larger cups (maybe even glasses), an assistant to run the stand and a new Lemonada 5000 mixer, which guarantees a perfect mix of sugar and lemon in every glass.

The mayor is no idiot. He sees what is happening, so he renegotiates his deal. From now on, he’ll pay her costs plus 5 cents a cup. Unfortunately, this also creates perverse incentives. Your daughter can make more money by reducing the size of each cup. Or she can cut back on customer service, hygiene or speed. Or she can cut side deals with her vendors: The lemon seller can raise his price — passed on to the mayor – – and share the proceeds with your daughter.

Manipulation’s Cost

Bizarrely, a cost-based pricing structure actually adds a new major cost: the effort it takes to track, manipulate and justify costs. In a $2.5 trillion industry such as health care, these activities are a big reason that administrative costs exceed $300 billion a year.

An Economist article on dialysis perfectly illustrates the inflationary impact of cost-plus pricing. Because U.S. clinics are paid on a cost-plus basis, they prefer expensive drugs to cheaper ones. In fact, many appear to order drugs in units that exceed what a standard dosage requires, because they can charge the government for the waste. The article noted that many clinics preferred an injected drug with a price of $4,100 a year over the identical drug in oral form, priced at only $450 a year. Not surprisingly, the manufacturer of the oral drug responded by increasing its price above that of the injected version to make it more competitive.

Our entire health-care system suffers from what I call the cost illusion — the idea that a service has a long-term fixed cost. But every cost is merely someone else’s price. And over time, costs themselves are also determined by prices.

What is the cost of orthopedic surgery? It is the sum of all the costs of the underlying components — the surgeon, anesthesiologist, nurses, hospital, device, tests and drugs. But how are these costs determined?

Let’s look at the orthopedic surgeon. We may believe there is some objective way to measure the cost of her time — a fair return on her years of education or training, say. In reality, the cost of the surgeon’s time depends on the value of orthopedic surgery to patients. If more patients need it, the surgeon’s time becomes more valuable. In a free market, there are two ways the cost of her time could decline: more orthopedic surgeons fighting for business or patients benefiting less from orthopedic surgery.

Protected Costs

In an administered market such as health care, on the other hand, our surrogates — insurers and Medicare — substitute their calculation of cost for the workings of supply and demand. This has the strange effect of preventing costs from ever falling. Let’s say Medicare sets the reimbursement rate for a hip replacement at $15,000. Now say a new drug is invented that makes hip replacements less useful. In a free market, the price would decline. But in an administered system, these prices are viewed as costs, and once set, there is no mechanism to lower them. A hip replacement still takes the same amount of time from surgeons of the same degree of expertise, so the cost must still be $15,000.

In health care, our system is designed to shield patients from even knowing the prices. Unfortunately, a world without prices is also one that can’t achieve the purpose of prices: the allocation of resources to match what consumers want.

Five weeks after my father died from a hospital-borne infection in the intensive-care unit of aNew York City hospital, my mother received a bill for his treatment — $635,695.75! The bill was broken down into 17 items. Had I booked Dad a room at the most expensive hotel in town for the five weeks of his illness, filled the room with a million dollars’ worth of hospital equipment leased for $15,000 a month, given him round-the-clock nursing care, and paid a physician to spend an hour a day with him (roughly 50 minutes more than at the hospital), it would total roughly $150,000.

That leaves $500,000 left over for, say, drugs (billed at $145,431), oxygen ($41,695) and blood ($30,248).

This comparison with actual prices is absurd, of course, because it assumes that the prices on my father’s bill were real prices. No one was actually supposed to pay that bill. The prices didn’t even bear a relationship to the exchange of funds for Dad’s treatment. The hospital billed my mother for her share ($992), which she wisely didn’t pay and the hospital wisely didn’t try to collect. Medicare paid the hospital according to its concept of the hospital’s cost. Of course, there’s no question what the competitive price would be for the service of killing my father: zero.

Prescription Costs

A stunted price system also distorts investment in new treatments. U.S. pharmaceutical companies spent roughly $67 billion in 2010 on research to develop new drugs. But many of these new drugs target conditions for which perfectly good drugs already exist. It is the lack of consumer prices that explains their me-too approach.

Once a new drug is approved, it enters the marketplace at a high reimbursement rate, compensating the manufacturer for its expensive research. So what’s the punishment for entering a crowded market? Very little. Furthermore, even with a promising new entrant, the prices of the existing drugs don’t decline; they have already been set to compensate for their “costs.” In any normal market, a new entrant would bear not only the risk of being rejected but also the risk of a price war.

Administered pricing also explains why our health-care industry has spent far too little on information technology. Your dry cleaner computerized his inventory system because losing a shirt may mean losing a payment or even a customer. But a doctor who invests in state-of-the-art patient data management can’t charge higher prices; insurers won’t pay. Nor is there a market mechanism to force hospitals that use paper records to accept lower prices — they don’t benefit from being more efficient. So the investment is never made.

If we, the consumers, saw and paid prices, we would be looking at a very different industry. My guess is that many of us would pay only for doctors who spend more time talking to us, providers who invest in computerized records, genuinely better treatments rather than me-too drugs for chronic conditions, and hospitals that kill fewer patients.

(David Goldhill is the president and chief executive officer of the cable TV network GSN. This is the first in a series of three excerpts from his new book, “Catastrophic Care: How American Health Care Killed My Father — and How We Can Fix It,” to be published Jan. 8 by Alfred A. Knopf. The opinions expressed are his own. Read Part 2 and Part 3.)

To contact the writer of this article: David Goldhill at

To contact the editor responsible for this article: Mary Duenwald

How physician executives will drive value for hospitals @Medici_Manager @kevinmd


“Value” is the pot of gold at the end of the rainbow that health care professionals everywhere are seeking, but which few can seem to find.

Policy makers, hospital executives, physicians,  consultants – all are looking for a means to pivot away from a system that rewards volume of services provided to one that rewards quality and cost effectiveness (i.e., “value”).

How far we are from achieving this goal can be gauged by the type of incentives being offered to physicians.   The great majority of physician contracts today feature a salary with a production bonus, physician recruiting firms report.  In 2011, thirty-five percent of physician bonuses included financial rewards for physicians who achieve quality of care targets, up from less than seven percent the previous year, according to one study.

Though philosophically this represents a significant turn toward value, the practical effect is minimal.  Qualitative metrics still carry relatively little weight in most physician compensation formulas, usually accounting for less than ten percent of a physician’s potential bonus.    The reality is that volume still rules in physician compensation, whether measured by patient encounters, RVUs, net collections or other metrics.

Unless this paradigm can be shifted, achieving a value-based health care system will be problematic.   According to a Boston University School of Public Health study, physicians control close to 90% of all spending on personal health in the United States, by admitting patients, performing surgeries, ordering tests and treatments, and writing prescriptions.  For that reason, health reform at its essence is largely about modifying physician behaviors and aligning their practice patterns and interests with those of hospitals, whose reimbursement rates are likely to rise as they treat patients more efficiently.  However,  as history shows, bringing physicians and hospitals together is easier said than done.

If anyone will be able to bridge the gap it is physician executives.   As medical professionals, they have the best handle on how to define and measure quality – a very elusive metric where physician performance is concerned.  Due to their clinical training, they also are in the best position to evaluate and implement evidence-based treatment protocols that staff physicians will accept as valid and worthwhile.    Last, but not least, physician executives will be called on to lead medical staffs largely composed not of independent private practice owners, but of hospital employees.   Hospitals will look to physician executives to both implement new physician compensation models and to lead physician employees to a more collaborative, value-based mindset.

These are challenging goals, and to achieve them physician executives must evolve away from their traditional role as merely the “voice” of the hospital to the medical staff.   Instead, they will be at the center of hospital and system management, actively involved in both creating physician alignment  strategies and achieving the overall strategic and financial goals of the hospital.    Based on these expanded objectives, the new generation of physician executives is more likely to be involved in management full-time and is less likely to maintain a clinical practice.

Because medical training is not structured to teach management or business skills, hospitals will have to take the lead in creating training and career paths for the physician executives they will need in a value-driven era of health care delivery.    Hospitals that can consistently identify, nurture and recruit physician executives will have the best chance of finding the “pot at the end of the rainbow” in a post fee-for-service world.

Michael N. Sills is Vice President, Baylor Quality Alliance Partner, Cardiology Consultants of Texas Baylor HealthCare System. James Merritt is co-founder of Merritt Hawkins, a national physician search and consulting firm and a company of AMN Healthcare.  

“Choosing Wisely”: Physicians Step to the Front in Health Care Reform @Madici_Manager

The war-torn landscape of health care policy debate has left much of the public confused and frightened. At the center has been the Affordable Care Act, promising broader coverage for the uninsured and a better deal for people who have insurance, but under continuing barrage in Congress, the courts, and the media. Combined with the certain knowledge that health costs are far too high, this conflict leaves average people wondering what they will lose, and when.

Silver linings are in short supply, but one appeared last week in the form of a new initiative called “Choosing Wisely,” catalyzed by the American Board of Internal Medicine Foundation. Its goal is to identify medical interventions — like tests, procedures, drugs, and even surgery — that are often overused without benefit to patients, and, in their words, “whose necessity should be questioned and discussed” between physicians and their patients. For this initiative, the ABIM Foundation worked with specialty societies, such as the American College of Cardiology and the American College of Radiology — nine societies so far and more to come — to identify “Five Things Physicians and Patients Should Question” in each specialty. For example, the American College of Radiology included, “Don’t do imaging for uncomplicated headache,” in its list; the cardiologists included, “Don’t perform stress cardiac imaging or coronary angiography in patients without cardiac symptoms unless high-risk markers are present.”

Blunt, unfeeling cuts in health care benefits, coverage, or payments are one way to bring health care costs under control, but they are not the right way. Far better is to identify the many ways in which health care wastes money doing things that do not help patients and, too often, hurt them. But, public officials or payers are not trusted to point that out; when they try to call attention to harmful overuse of care, they are tarred as favoring “rationing,” even when their motives are to help patients and the science is strong.

But, “Choosing Wisely” is a game-changer. The advice comes not from payers or politicos, but from pedigreed physician groups. The specialty societies are not guessing; their lists of procedures contain copious scientific citations supporting the claims of overuse. Their advice earns further trust because, in many cases, by suggesting that physicians and patients think twice before using certain tests and treatments, the specialty societies are speaking against their own economic self-interest, which in fee-for-service payment attaches income to volume. The American College of Gastroenterology, for example, recommends certain limits on colonoscopy frequency, even though more colonoscopies mean more income.

As one would predict and hope, the organizations carefully couch their recommendations in terms that leave room for doctors and patients to customize care to individual circumstances; they are, correctly, suggestions, not handcuffs. Payers, even while they celebrate this step of professional leadership, should exercise restraint in converting these lists into hard-wired payment rules.

However, these lists do no good if they remain on paper, only. The ABIM Foundation, these forward-thinking specialty societies, and many other professional groups should now help physicians, nurses, and other clinicians take concrete, local steps to reduce harmful overuse of ineffective care. And, equally important, these same physician-leaders ought to let the American public know boldly, repeatedly, and through every possible channel that asking questions about the need for and effectiveness of these practices is in each person’s self-interest. If physicians and nurses explain it, the public can come to understand that avoiding unhelpful care is not rationing, but rational. It is a way to make sure that all Americans can get all of the care that helps them; avoiding care that hurts makes American health care more affordable. Happily, Consumer Reports, AARP, and other organizations representing the lay public are connecting tightly to “Choosing Wisely.”

We are witnessing a horse race between those who would simply cut care and those, like me, who believe firmly that we can improve our way out of unsustainable costs. Overuse of unhelpful care is just one category of costs we ought not to agree to, but it is a fine place to start.

What Being an “Authentic Leader” Really Means @Medici_Manager

by Charalambos Vlachoutsicos  |  12:00 PM December 7, 2012

Being an effective manager requires that you behave authentically. “Why?” you might ask. “Maybe the ‘real me’ isn’t the most effective boss, but if I can just act the way an effective boss should act and get good results, what’s wrong with that?”

In my experience, two things are wrong with that, and they both amount to the same thing: It almost certainly won’t work. First, it won’t work because, sooner or later, the people who work for you and with you will see through it. Even if your leadership and your instructions are sensible and productive people will feel uncomfortable with someone who doesn’t really mean what he or she says.

Second, trying to act like a different kind of person than you really are won’t work because you yourself will not be able to keep it up day after day, year after year. Your words and your body language as well as your actions and decisions will reveal that you are not what you present yourself to be and people will be more and more reluctant to trust you as a leader. In both ways, then, “authenticity” is as much a practical virtue as an ethical one. You simply won’t be able to lead effectively if people perceive you as disingenuous.

Students are often worried — at first — about my emphasis on authenticity. “Isn’t being your true self a license to say whatever you think and vent whatever you feel at a particular moment?” It seems obvious to them that this would cause at least as many problems as it solves — and, of course, they are right. Being your true self is not the same as being spontaneous. It is one thing to be authentic, quite another to “shoot from the hip.”

Let’s imagine, for example, that you are running a brainstorming meeting and someone comes up with an idea that you think is pretty stupid. Let’s also imagine that patience is not your strong suit, so you shoot back with something like: “That’s a dumb idea.” Not very nice, but you’re the boss and in a way, it is authentic, isn’t it?

Now let’s imagine a different response to your subordinate’s idea. You have learned — from experience, practice, and your self-awareness — that your impatience with that idea might well be a signal that you don’t understand what your subordinate really meant. If you knew more about what he was thinking, his idea might not seem so stupid.

With that in mind, you control your impulse — authentic as it is — to snap at him. Instead you hand the controls over to your other impulse — also authentic — to act in a spirit of mutual respect and grant that your subordinate might have something valuable to offer which escapes you. So you say something like, “I don´t understand what you mean by this. Can you tell us more about it?”

So which of these two authentic responses should you choose?

First of all, it should be the one that reflects more of you. The “dumb idea” response only reflects your feeling that the idea doesn’t make sense and it fails to reflect your awareness that you might not know what the person really means. Indeed, the immediate feeling that someone else is being stupid very often stems from the irritation that we feel when we don’t understand what the other person says or does. And an irritating idea is not necessarily a stupid idea.

With the “tell me more” response, however, you are reflecting yourself more truly. You admit honestly that you don’t always understand everything immediately and, most importantly, you express your inner value of fairness.

It’s not only more authentic, it’s also more effective, which is the whole point of authenticity. The spontaneous offensive response would inhibit the free flow of ideas in the meeting. Even if the other people there agree with you that their colleague’s idea is stupid, they’re not going to be so quick to stick their own necks out in the future. You might well lose out on good ideas and important information. Thus, failure to differentiate authentic from unthinkingly impulsive behavior is likely to undermine the basic project which authenticity serves; namely, establishing and sustaining effective managerial interaction.

The second response will have just the opposite effect. Even if the other people there think that their colleague’s idea is stupid, to see that he didn’t get his head chopped off for that will assure them that they need not be nervous about expressing their ideas openly. They will be more likely than ever to offer you whatever ideas and important information they have. Thus, your leadership will be much more effective.

You might wonder: Would it have been an even better idea to pretend to like the dumb idea, just for the sake of encouraging everyone to share their ideas freely? No, it wouldn’t. If the idea really is a bad one, as it might well be, it’s likely that most of the other people there can see that, too. Pretending to appreciate it will strike a false note and people will get confused and suspicious as they try to figure out what you are really up to. That would certainly not be conducive to effective managerial interaction.

It is crucial to recognize that authenticity is a social ability. Implicit in the concept of being authentic — “being actually what is claimed” — are qualities of interactive behavior. We regard a person as authentic to the extent that her conduct towards others accords with what she truly believes in. Authenticity, then, is about giving a message about your true self — one you must continually shape and deliver by thoughtfully choosing your words and behaviors to suit the people you interact with and the specific purpose at hand.

Charalambos Vlachoutsicos


A former businessman and consultant, Charalambos A. Vlachoutsicos is an Adjunct Professor at Athens University of Economics and Business in Greece.

Private healthcare: the lessons from Sweden @Medici_Manager

On Kungsholmen, one of the islands on which the Swedish capital Stockholm is built, stands what some consider to be the future of National Health Service under David Cameron: St Göran, a six-storey redbrick hospital that makes profits from the state by treating patients.

Emblazoned with the name of its corporate manager, Capio – rather than the Swedish state, which constructed it – the hospital has for a decade been the mascot of pro-market Scandinavian policies that are widely admired by the coalition in Westminster.

Despite its reputation as a leftwing utopia, Sweden is now a laboratory for rightwing radicalism. Over the past 15 years a coalition of liberals and conservatives has brought in for-profit free schools in education, has sliced welfare to pay off the deficit and has privatised large parts of the health service.

Their success is envied by the centre right in Britain. Despite predictions of doom, Sweden’s economy continues to grow and its pro-business coalition has remained in power since 2006. The last election was the first time since the war that a centre-right government had been re-elected after serving a full term.

As the state has been shrunk, the private sector has moved in. Göran Dahlgren, a former head civil servant at the Swedish department of health and a visiting professor at the University of Liverpool, says that “almost all welfare services are now owned by private equity firms”.

Thanks in part to the outsourcing of the state, Sweden’s private equity industry has grown into the largest in Europe relative to the size of its economy, with deals worth almost £3bn agreed last year. The key to this takeover was allowing private firms to enter the healthcare market, introducing competition into what had been one of the world’s most “socialised” medical systems.

Business-backed medical chains have sprung up: patients can see a GP in a centre owned by Capio, be sent to a physician in the community employed by Capio, and if their medical condition is serious enough end up being treated by a consultant in a hospital bed in St Göran, run by Capio. For every visit Capio, owned by venture capitalists based in London and Stockholm, is paid with Swedish taxpayers’ cash.

The company’s Swedish operation now has 4,500 employees, with a turnover of about £500m. Westminster wonks have monitored Capio’s success closely ever since St Göran was allowed to be taken over in 2000. There are now six private hospitals funded by the taxpayer in Sweden, about 8% of the total.

In Britain the coalition has mimicked this approach. Circle, backed by private equity firms, runs Hinchingbrooke hospital in Cambridge. Serco, a FTSE 100 company, is eyeing the George Eliot hospital in Nuneaton, and two hospitals may be privatised in south London as a result of bankruptcy.

Dahlgren says: “The difference between Sweden and England is thatprivatisation of a hospital was only considered when you had big financial problems. St Göran was considered one of the best when it was sold.”

Capio’s executives dispute that they have simply “made the best better”. They say they focus on improving standards, arguing that only by attracting more patients and managing costs can they make money from healthcare.

During an hour-long presentation to the Guardian, St Göran’s chief executive, Britta Wallgren, says the 310-bed hospital, serving 430,000 people, outperforms state-owned rivals inside and outside the country.

She says emergency patients see a doctor within half an hour, compared with A&E waits of up to four hours in the NHS. “We took an A&E department that dealt with 35,000 patients a year and now treats 75,000,” Wallgren says. “As admissions grow and we have an increasingly elderly population so must our performance improve.”

Capio stresses that St Göran has low levels of hospital-acquired infections, and patient surveys record high levels of public satisfaction. It has also produced year-on-year productivity gains – something the state cannot match. Thomas Berglund, Capio’s president, says the “profit motive works in healthcare” and companies run on “capitalism, not altruism”.

He adds: “We have just won the right to run the hospital again and will have to reduce costs by 120m Swedish krona [£11.2m] over 10 years. That’s our profit gone unless we keep reducing costs here.”

At the busy entrance to the hospital, Swedish patients appear resigned to the end of state ownership in health, once a cornerstone of the country’s generous welfare system.

“I am one of those Swedes who do not agree that private hospitals should exist,” says Christina Rigert, 62, who used to work as an administrator in the hospital but resigned “on principle” when it was privatised a decade ago.

Now back as a patient after gastric band surgery, she says: “The experience was very good. I had no complaints. There’s less waiting than other hospitals. I still do not think there should be private hospitals in Sweden but it’s happening.”

Since 2010 private companies have had the right to set up large GP-style services anywhere in the country – and to be paid for it out of taxpayers’ money. Corporates have set up 200 healthcare centres in two years, although critics point out that the majority have been in wealthier urban areas.

Dahlgren says that inequalities are growing, adding that the law is “fundamentally antidemocratic”. Sweden, he explains, has a long history of local governments deciding where GPs should be sited to ensure poor or rural areas do not lose out.

“The local councils can now neither determine the number of for-profit providers to be financed by taxes nor where these tax-financed services are to be located,” he says. “This is determined by the private providers on the basis of profitability rather than the health need for these tax-financed services. It is remarkably antidemocratic.”

There are distinct differences between Sweden and Britain. Swedish political culture is much more consensual than in Britain, and strongly centred on people choosing where to get healthcare.

Leftwing governments in Sweden, who ran the country for 65 of the last 80 years, promoted patient choice between state-owned hospitals. The real shock was when centre-right governments argued in the 1990s that for patient choice to work, competition and privatisation in healthcare were needed.

The Social Democrats, the main Swedish opposition party, have given up the idea of renationalising the health service and instead argue that profits should be capped and quality of care more tightly regulated. With hardline opposition to private healthcare limited to the far-left parties, Swedes are likely to see more changes.

In Stockholm, more than 500 beds are being removed from the country’s best known health centre, the Karolinska University hospital, and the services are being moved into the community to be run by private companies, a policy that in England would almost certainly lead to demonstrations.

Pro-marketeers argue that companies can improve patient experience at a reduced cost, and expand provision at a time when the state cannot afford to do so. This view was challenged last year when a business-backed research institute, the Centre for Business and Policy Studies, looked at the privatisation of public services in Sweden and concluded that the policy had made no difference to the services’ productivity. The academic author of the report, who stood by the findings, resigned after a public row.

There have also been scandals involving claims of shocking treatment of some patients. Last year Stockholm county council, which controls healthcare for a fifth of the Swedish population, withdrew contracts from a private company after staff in a hospital were allegedly told to weigh elderly patients’ incontinence pants to see if they were full or could be used for longer.

Stig Nyman, a Christian Democrat member of the council instrumental in ushering in a pro-market health policy for 20 years, says he still believes private business is necessary.

Over coffee and biscuits in his modern office amid the 19th-century neoclassical columns of the council building, Nyman dismisses the allegations of mistreatment. “We have hundreds of contracts with private firms. In this case journalists found five or six mistakes. It’s not a big deal.

“In healthcare, companies drive up standards. We pay 5,000 Swedish krona [£465] a patient on average. We force people to compete on the quality of service and treatment.”

Perhaps most damaging for private investors drawn by the potential profits to be made from the state has been the probing of their affairs by tax inspectors. The industry has been under scrutiny since 2007, when a spate of high-profile deals, including the buyout of Capio, led to investigations into financiers.

The charge is that private equity firms siphon profits out of the state’s coffers while avoiding their fair share of taxes. Berglund, of Capio, says: “It is always thrown about that we are not paying taxes but it is not true.”

Swedish tax authorities are, however, taking some companies to court because pay in private equity groups is often linked to the profits made on deals and has been incorrectly taxed for years, it is said, at rates lower than that required for income in Sweden.

Earlier this month one of Capio’s owners, a private equity firm called Nordic Capital, lost a court case against the Swedish tax agency, leavingit with a bill of 672m Swedish krona [£63m]. The authorities, it is reported, will also slap a tax bill collectively of 2.6bn krona on another 34 individuals.

“There has been a strong reaction in Sweden. These people have been paying themselves enormous sums of money,” says Dahlgren. “It should be a worry for every health system where you have competition and private firms arriving.”

Reducing Waste in Health Care @Medici_Manager @nedwards_1

A third or more of what the US spends annually may be wasteful. How much could be pared back–and how–is a key question.

What’s the issue?
Health care spending in the United States is widely deemed to be growing at an unsustainable rate, and policy makers increasingly seek ways to slow that growth or reduce spending overall. A key target is eliminating waste–spending that could be eliminated without harming consumers or reducing the quality of care that people receive and that, according to some estimates, may constitute one-third to nearly one-half of all US health spending.Waste can include spending on services that lack evidence of producing better health outcomes compared to less-expensive alternatives; inefficiencies in the provision of health care goods and services; and costs incurred while treating avoidable medical injuries, such as preventable infections in hospitals. It can also include fraud and abuse, which was the topic of a Health Policy Brief published on July 31, 2012.

This policy brief focuses on types of waste in health care other than fraud and abuse, on ideas for eliminating it, and on the considerable hurdles that must be overcome to do so.

What’s the background?
Many studies have examined the characteristics and amounts of wasteful or ineffective US health care spending in public programs, such as Medicare and Medicaid, and in care paid for by private insurance as well as out-of-pocket by consumers. By most accounts, the amount of waste is enormous.THE COST OF WASTE: By comparing health care spending by country, the McKinsey Global Institute found that, after controlling for its relative wealth, the United States spent nearly $650 billion more than did other developed countries in 2006, and that this difference was not due to the US population being sicker. This spending was fueled by factors such as growth in provider capacity for outpatient services, technological innovation, and growth in demand in response to greater availability of those services. Another $91 billion in wasteful costs or 14 percent of the total was due to inefficient and redundant health administration practices.

By looking at regional variations in Medicare spending, researchers at the Dartmouth Institute for Health Policy and Clinical Practice have estimated that 30 percent of all Medicare clinical care spending could be avoided without worsening health outcomes. This amount represents about $700 billion in savings when extrapolated to total US health care spending, according to the Congressional Budget Office.

More recently, an April 2012 study by former Centers for Medicare and Medicaid Services (CMS) administrator Donald M. Berwick and RAND Corporation analyst Andrew D. Hackbarth estimated that five categories of waste consumed $476 billion to $992 billion, or 18 percent to 37 percent of the approximately $2.6 trillion annual total of all health spending in 2011. Spending in the Medicare and Medicaid programs, including state and federal costs, contributed about one-third of this wasteful spending, or $166 billion to $304 billion (Exhibit 1). Similarly, a panel of the Institute of Medicine (IOM) estimated in a September 2012 report that $690 billion was wasted in US health care annually, not including fraud.

Exhibit 1
Download Powerpoint Slide

CATEGORIES OF WASTE: Researchers have identified a number of categories of waste in health care, including the following:

  • Failures of care delivery. This category includes poor execution or lack of widespread adoption of best practices, such as effective preventive care practices or patient safety best practices. Delivery failures can result in patient injuries, worse clinical outcomes, and higher costs.A study led by University of Utah researcher David C. Classen and published in the April 2011 issue of Health Affairs found that adverse events occurred in one-third of hospital admissions. This proportion is in line with findings from a 2010 study by the Department of Health and Human Services’ Office of Inspector General (OIG), which found that Medicare patients experienced injuries because of their care in 27 percent of hospital admissions.

    These injuries ranged from “temporary harm events,” such as prolonged vomiting and hypoglycemia, to more serious “adverse events,” such as kidney failure because of medication error. Projected nationally, these types of injuries–44 percent of which were found to be clearly or likely preventable–led to an estimated $4.4 billion in additional spending by Medicare in 2009, the OIG found. Berwick and Hackbarth estimate that failures of care delivery accounted for $102 billion to $154 billion in wasteful spending in 2011.

  • Failures of care coordination. These problems occur when patients experience care that is fragmented and disjointed–for example, when the care of patients transitioning from one care setting to another is poorly managed. These problems can include unnecessary hospital readmissions, avoidable complications, and declines in functional status, especially for the chronically ill.Nearly one-fifth of fee-for-service Medicare beneficiaries discharged from the hospital are readmitted with 30 days; three-quarters of these readmissions–costing an estimated $12 billion annually–are in categories of diagnoses that are potentially avoidable. Failures of care coordination can increase costs by $25 billion to $45 billion annually. (See the Health Policy Brief published on September 13, 2012, for more information on improving care transitions.)
  • Overtreatment. This category includes care that is rooted in outmoded habits, that is driven by providers’ preferences rather than those of informed patients, that ignores scientific findings, or that is motivated by something other than provision of optimal care for a patient. Overall, the category of overtreatment added between $158 billion and $226 billion in wasteful spending in 2011, according to Berwick and Hackbarth.An example of overtreatment is defensive medicine, in which health care providers order unnecessary tests or diagnostic procedures to guard against liability in malpractice lawsuits. A September 2010 Health Affairsstudy led by Harvard University researcher Michelle M. Mello estimated that in 2008, $55.6 billion or 2.4 percent of total US health care spending was attributed to medical liability system costs, including those for defensive medicine.

    Overtreatment can also result from overdiagnosis, which results from efforts to identify and treat disease in its earliest stages when the disease might never actually progress and when a strategy such as watchful waiting may have been preferred. For example, in July 2012 the US Preventive Services Task Force recommended against prostate-specific antigen-based screening for prostate cancer because of “substantial overdiagnosis” of tumors, many of which are benign. Excessive treatment of these tumors, including surgery, leads to unnecessary harms, the task force said.

    Overtreatment also includes intensive care at the end of a person’s life when alternative care would have been preferred by the patient and family, or excessive use of antibiotics.

    Another form of overtreatment is the use of higher-priced services that have negligible or no health benefits over less-expensive alternatives. When two approaches offer identical benefits but have very different costs, the case for steering patients and providers to the less costly alternative may be clear–for example, using generics instead of brand-name drugs.

    There is also provision of many services that may once have been considered good health care but that now have been discredited as lacking in evidence of benefit. Under the umbrella of the American Board of Internal Medicine Foundation’s “Choosing Wisely” initiative, nine different medical specialty groups and Consumer Reports have identified a series of regularly used tests or procedures whose use should be examined more closely. In 2013, 21 additional medical specialty groups will release similar lists in their respective fields.

    The National Priorities Partnership program at the National Quality Forum, a nonprofit organization that works with providers, consumer groups, and governments to establish and build consensus for specific health care quality and efficiency measures, has produced a list of specific clinical procedures, tests, medications, and other services that may not benefit patients. The next step is for physicians and payers to change their practices accordingly.

    After requesting public input, CMS on November 27, 2012, posted on its website a list of procedures or services that may be overused, misused, or provide only minimal health care benefits. They include lap-band surgery for obesity, endoscopy for gastroesophageal reflux disease, and lung volume reduction surgery. CMS said that these services may be evaluated to determine whether they should continue to be reimbursed under Medicare.

  • Administrative complexity. This category of waste consists of excess spending that occurs because private health insurance companies, the government, or accreditation agencies create inefficient or flawed rules and overly bureaucratic procedures. For example, a lack of standardized forms and procedures can result in needlessly complex and time-consuming billing work for physicians and their staff.In an August 2011 Health Affairs article, University of Toronto researcher Dante Morra and coauthors compared administrative costs incurred by small physician practices in the United States, which interact with numerous insurance plans, to small physician practices in Canada, which interact with a single payer agency. US physicians, on average, incurred nearly four times more administrative costs than did their Canadian counterparts. If US physicians’ administrative costs were similar to those of Canadian physicians, the result would be $27.6 billion in savings annually. Overall, administrative complexity added $107 billion to $389 billion in wasteful spending in 2011.
  • Pricing failures. This type of waste occurs when the price of a service exceeds that found in a properly functioning market, which would be equal to the actual cost of production plus a reasonable profit. For example, Berwick and Hackbarth note that magnetic resonance imaging and computed tomography scans are several times more expensive in the United States than they are in other countries, attributing this to an absence of transparency and lack of competitive markets. In total, they estimate that these kinds of pricing failures added $84 billion to $178 billion in wasteful spending in 2011.
  • Fraud and abuse. In addition to fake medical bills and scams, this category includes the cost of additional inspections and regulations to catch wrongdoing. Berwick and Hackbarth estimate that fraud and abuse added $82 billion to $272 billion to US health care spending in 2011.
What are the issues?
Although there is general agreement about the types and level of waste in the US health care system, there are significant challenges involved in reducing it. Much waste is driven by the way US health care is organized, delivered, and paid for and, in particular, by the economic incentives in the system that favor volume over value. An additional problem is that attacking “waste” usually means targeting someone’s income.In its September 2012 report, the IOM offered 10 broad recommendations for creating a very different health care system in which research, new incentives, partnerships between providers and patients, and a culture that supports continuous learning and development could lead to real-time improvements in the efficiency and effectiveness of US health care.

Although the IOM committee that prepared the report did not estimate cost savings, it predicted that implementing these measures would improve care and reduce expenses. The panel’s recommendations included the following:

  • Improve providers’ capacity to collect and use digital data to advance science and improve care.
  • Involve patients and their families or caregivers in care decisions. Increasing comparative effectiveness research may help physicians, patients, and their families make more informed decisions. (See the Health Policy Brief published on October 8, 2010, for more information on comparative effectiveness research.)
  • Use clinical practice guidelines and provider decision support tools to a greater extent.
  • Promote partnerships and coordination between providers and the community to improve care transitions.
  • Realign financial incentives to promote continuous learning and the delivery of high-quality, low-cost care. Numerous efforts are underway among public and private payers to move from the traditional fee-for-service mechanism, which pays based on the volume of services performed, and toward those that pay based on value and outcomes. (For more information, see theHealth Policy Brief published October 11, 2012, on pay-for-performance, and the Health Policy Brief published January 31, 2012, on accountable care organizations.
  • Improve transparency in provider performance, including quality, price, cost, and outcomes information. In a May 2003 Health Affairs article, Gerard F. Anderson from Johns Hopkins University, Uwe E. Reinhardt from Princeton University, and coauthors compared US health care spending with those of other member nations of the Organization for Economic Cooperation and Development. They found that the United States spent more on health care than any other country and that the difference was caused mostly by higher prices.

One way to improve transparency and reduce prices is through “reference pricing,” in which an employer or insurer makes a defined contribution toward covering the cost of a particular service and the patient pays the remainder. The objective is to encourage patients to choose providers with both quality and costs in mind. In a September 2012 Health Affairs article, University of California, Berkeley, researchers James C. Robinson and Kimberly MacPherson reviewed how this approach is being tested.

Many of the measures described above are in process, although they are playing out at different rates in different regions and systems around the country. There are widespread concerns about how replicable and scalable some new payment models are, and how soon they will make a major difference in the way care is provided and in what amount. There are also cross-cutting trends, including consolidation of hospital systems and their employment of physicians, which could lead to the provision of more unnecessary services, not fewer.

For example, in a May 2012 Health Affairs article, Robert A. Berenson, an institute fellow at the Urban Institute, and coauthors found that dominant hospital systems and large physician groups can often exert considerable market power to obtain steep payment rates from insurers.

FEAR OF RATIONING: In theory, a focus on eliminating waste in health care could skirt the issue of rationing because wasteful activities, by definition, carry no benefit to consumers. However, there may be a fine line between health care that is of no benefit and situations where the benefits are relatively small, especially in comparison to the cost.

A common example involves continued chemotherapy treatments for patients having certain advanced cancers. These treatments can cost tens of thousands of dollars but extend a patient’s life by only a few weeks. However, restricting the use of such treatments or services can lead to accusations of “rationing.”

To address many Americans’ fear that the Affordable Care Act would lead to rationing, the law specifically forbids the federal government from making decisions on “coverage, reimbursement, or incentive programs” under Medicare that take cost-effectiveness into account, and “in a manner that treats extending the life of an elderly, disabled, or terminally ill individual as of lower value than extending the life of an individual who is younger, nondisabled, or not terminally ill.” The law is silent on any of these activities going on outside of Medicare.

What’s Next?
Efforts to extract waste from the health care system will in all likelihood continue along a range of federal government initiatives, including information technology adoption, pay-for-performance, payment and delivery reforms, comparative effectiveness research, and competitive bidding. Similar programs are also being initiated by state Medicaid agencies and by private payers. In the view of many experts, even more vigorous efforts to pursue the reduction of waste in health care are clearly warranted.
Anderson, Gerard F., Uwe E. Reinhardt, Peter S. Hussey, and Varduhi Petrosyan, “It’s the Prices, Stupid: Why the United States Is So Different from Other Countries,” Health Affairs 22, no. 3 (2003): 89-105.Bentley, Tanya G.K., Rachel M. Effros, Kartika Palar, and Emmett B. Keeler, “Waste in the US Health Care System: A Conceptual Framework,” Milbank Quarterly 86, no. 4 (2008): 629-59.

Berenson, Robert A., Paul B. Ginsburg, Jon B. Christianson, and Tracy Yee, “The Growing Power of Some Providers to Win Steep Payment Increases from Insurers Suggests Policy Remedies May Be Needed,” Health Affairs 31, no. 5 (2012): 973-81.

Berwick, Donald M., and Andrew D. Hackbarth, “Eliminating Waste in US Health Care,” JAMA 307, no. 14 (April 11, 2012): 1513-6.

Classen, David C., Roger Resar, Frances Griffin, Frank Federico, Terri Frankel, Nancy Kimmel, et al., “‘Global Trigger Tool’ Shows That Adverse Events in Hospitals May Be Ten Times Greater Than Previously Measured,”Health Affairs 30, no. 4 (2011): 581-9.

Elmendorf, Douglas W., “Options for Controlling the Costs and Increasing the Efficiency of Health Care,” Statement before the Subcommittee on Health, Committee on Energy and Commerce, US House of Representatives, March 10, 2009.

Farrell, Diana, Eric Jensen, Bob Kocher, Nick Lovegrove, Fareed Melhem, Lenny Mendonca, et al., “Accounting for the Cost of US Health Care: A New Look at Why Americans Spend More,” McKinsey Global Institute, December 2008.

Hoffman, Ari, and Steven D. Pearson, “‘Marginal Medicine’: Targeting Comparative Effectiveness Research to Reduce Waste,” Health Affairs 28, no. 4 (2009): w710-18. DOI: 10.1377/hlthaff.28.4.w710.

Institute of Medicine, “Best Care at Lower Cost: The Path to Continuously Learning Health Care in America,” September 6, 2012.

Kelley, Robert, “Where Can $700 Billion in Waste Be Cut Annually from the US Healthcare System?” Thomson Reuters, October 2009.

Levinson, Daniel R., “Adverse Events in Hospitals: National Incidence among Medicare Beneficiaries,” Department of Health and Human Services Office of Inspector General, November 2010.

Morra, Dante, Sean Nicholson, Wendy Levinson, David N. Gans, Terry Hammons, and Lawrence P. Casalino, “US Physician Practices Versus Canadians: Spending Nearly Four Times as Much Money Interacting with Payers,” Health Affairs 30, no. 8 (2011): 1443-50.

About Health Policy Briefs
About Health Policy BriefsWritten by
Nicole Cafarella Lallemand
Research Associate
Urban Institute

Editorial review by
Andrew D. Hackbarth
Assistant Policy Analyst
RAND Corporation

Brent C. James
Executive Director
Institute for Health Care Delivery Research
Intermountain Healthcare

Bob Kelley
Senior Vice President
Truven Health Analytics

Ted Agres
Senior Editor for Special Content
Health Affairs

Susan Dentzer
Health Affairs

Health Policy Briefs are produced under a partnership of Health Affairs and the Robert Wood Johnson Foundation.

Cite as:
“Health Policy Brief: Reducing Waste in Health Care,” Health Affairs, December 13, 2012.

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