Mission Possible: How Healthcare Can Achieve Both Higher Quality And Lower Cost

For years, healthcare reform has pursued the holy grail of higher quality at lower cost. I’ve always believed it’s achievable, and now it’s needed more than ever. 

The U.S. healthcare system is failing. Costs continue to increase faster than our nation's ability to pay, and the quality of our outcomes lag those of most other industrialized nations. People increasingly ask me what concrete steps could make a difference. The list of answers is long, and none are simple to implement, but there is a path forward. 

What is required, above all, is to change how physicians practice and hospitals are organized. And along the way, there are actions patients and purchasers can take to produce higher-quality outcomes and encourage system-wide improvements. Here are a few ways we can raise the quality of care while flattening the relentless upward trend of the cost curve. 

The Pros And Cons Of Specialty Care 

The United States lags the world in quality healthcare outcomes, although it has the highest proportion of physicians who are specialists compared to those in primary care, and leads all nations in the total cost of care delivery. The latter two facts are related. When it comes to the factors that improve health and extend life, what primary care physicians do has significantly greater impact than the improvements that derive from specialty care. Unfortunately, the U.S. healthcare system values the two sets of contributions in reverse, at least based on how much it pays for each.  

Most Americans believe that the greater the number of specialists in a community, the higher the quality of care — but often the opposite is the case. This inverse ratio has two causes. First, the best predictor of quality in specialty care is the number of surgical procedures and complex medical interventions performed by individuals and facilities. And many specialists in the United States do too few of these to match the performance of the best. 

The Leapfrog Group, a national nonprofit organization founded by large employers and purchasers to increase patient safety and outcomes in the United States, has identified a number of relatively rare and complex procedures that should be done at least annually in hospitals to maximize the chance for the best results. The same concept of a minimum number of procedures by surgeon and hospital is also important for some relatively common procedures like hysterectomy and joint replacement surgery. 

Hysterectomy and Total Joint Replacement

Women needing hysterectomy have two options. They can have a major surgical procedure with a long, abdominal incision, several days in a hospital and a full six-week recovery. Or they can have a minimally invasive laparoscopic operative approach on an outpatient basis with a much shorter recovery, often enabling normal activity in only a week or two. Ask women gynecologic surgeons, ‘If you needed this surgery, what is the minimal number of laparoscopic procedures you would demand your surgeon have completed in the previous year before you would allow that doctor to perform this surgery on you?’ and their answer is between 25 and 40 per year. Yet half of the surgeons in the U.S. who do hysterectomy perform fewer than 10 a year. 

As a result, half of the hysterectomies performed in the U.S. are still done through the much more invasive abdominal approach, not because the long incision is medically necessary, but because that is the only technique the surgeon is trained to do. And even among women having laparoscopic hysterectomies, many are performed by surgeons who do too few each year for maximal safety. We can do better. Today surgeons in The Permanente Medical Group, for example, use the minimally invasive approach for hysterectomies approximately 95 percent of the time.

Similarly, when it comes to performing a total joint replacement, whether hip or knee, the more procedures done annually by a surgeon and operative team, the better the outcomes and overall patient experience. If your surgery is done by a low-volume team, you might spend several extra days in the hospital, exposed to its attendant risks of infection and delirium. Choose a facility and surgeon with high volume, and you will spend less time in the hospital and begin walking sooner.

A second factor leading to poorer clinical outcomes is the tendency to perform procedures with minimal value as the number of patients per doctor decreases. According to an analysis of Medicare claims conducted by health services researchers at Dartmouth and published in its Atlas of Health Care, the number of procedures performed in a geographic locality reflects primarily the number of physicians who do that procedure, not the severity of the medical needs of patients. As an example, double the number of neurosurgeons, and you are likely to double the number of back surgeries performed, but will reduce the severity of the back pain little or not at all. As a result, according to the data from the atlas, areas of the country with the highest costs may actually perform worse on overall health outcomes than places with a lower specialist-to-patient ratio.

What Patients Can Do

Until physician distribution is better balanced throughout the healthcare system, the most important question patients can ask specialists is how many of these procedures they did last year. If it is fewer than 20 laparoscopic hysterectomies or 50 total joint replacements, find a different surgeon. And when your doctor starts describing abdominal incisions for hysterectomy and multiple-day stays for total joint replacement, ask why. And if the answer is unsatisfactory, seek a second opinion.

And when it’s available, look closely at publicly reported data on outcomes, such as those for heart surgery in many states. Fortunately, surgery is relatively safe in the 21st century, and most patients do well. But complication rates vary significantly. To maximize your chances for a successful outcome, be an informed consumer. 

Other Measures Worth Taking

Most policy experts recommend training more primary care and fewer specialty physicians. Accomplishing it is the difficult part. The process of approving and funding residency slots is complex. A 2010 report from MedPac, the federal commission that advises Congress on Medicare payment issues, offered suggestions on what needed to be done and how to increase our country's return on investment in residency training programs. The current system ties the payments for residency slots to hospital fee-for-service payments rather than to the country’s overall health needs. That makes little sense and continues to create financial incentives for hospitals to preferentially train more specialists.

But as difficult as it would be, changing the financing model could yield benefits. It could bring the ratio of primary and specialty care physicians closer to one-to-one, and thereby help our nation achieve more effective prevention and chronic disease management while concentrating surgical and procedural volume in the hands of more experienced specialists. The result would be improved healthcare outcomes for patients and better economic health for the U.S. 

How Purchasers Should Figure In The Future

Payers, both public and private, have powerful levers to pull when it comes to how change can be brought about in the United States. An adage in business schools says, "Show me the financial model of any operating system, and I'll tell the results it will achieve." And so it is with doctor and hospital reimbursement. 

A delivery system paid to focus on prevention and early identification and treatment of illness will keep beneficiaries and employees healthier at a lower cost over time. A multi-specialty medical group that takes full advantage of 21st-century communications and information technology will enable people to be better informed about their health and obtain medical care without having to miss work. A comprehensive electronic health record that presents a patient's medical treatment in its entirety at every visit will lower the risk of medical error. And being able to compare outcomes on a population basis will enable payers to identify which health systems deliver the highest-quality, most convenient care with the greatest value. 

Employers are frustrated by the rising costs of medical coverage. Many have moved to self-funding in the hope that access to more information on the health of their employees will achieve lower costs. Unfortunately, this approach doesn’t change the underlying rate of healthcare inflation, improve the delivery system, or reduce the unnecessary utilization that inevitably results from the fee-for-service method of reimbursement. And trying to ascertain appropriateness of care, case by case based on claims data, risks delaying needed medical treatment.

Imagine what would happen if businesses announced that at a clearly defined time in the future, they no longer would pay for medical services provided to their employees unless it was delivered through a comprehensive health system accountable for the quality, appropriateness, and affordability of the care delivered. 

Ultimately doctors and hospitals would then be jointly responsible for the patients they serve, and able to be properly recognized and rewarded for the total value they deliver. 

The Challenges Ahead

None of the changes proposed here, nor the other improvements that will be needed, are simple or straightforward, and many doctors and hospitals will resist all of them vigorously. Physicians like their independence, and many will refuse to give up the opportunity to do a procedure they perform only a few times a year. Investing in electronic health records and working with colleagues to seamlessly coordinate care will take time and resources to accomplish. Restricting the number of specialists being trained will be fought by university hospital CFO's and specialty department chiefs. Finally, transformational change requires leadership skills, and few physicians have taken the training needed to master them. 

The biggest challenge facing American medicine is sheer inertia. The status quo proves easier to maintain; it’s less contentious than attempts at transformation. Behavioral economics teaches us that the pain we feel today registers far more strongly than the pain we’ll feel in the future. At the same time, we know that unsustainable trends never last forever, and so it is with healthcare inflation. Barring dramatic change, healthcare at some time in the near future will simply be too expensive for individuals, businesses and the government.

At some point healthcare, like all industries, will be disrupted, possibly from a technology company inside the United States, but more likely from a global competitor. And when that day arrives, doctors and hospitals in the U.S. will experience the wrenching consequences of failing to improve. Dozens of businesses from Kodak to Borders to the Yellow Cab companies have learned this lesson the hard way and paid the price. Now is the time for change in the medical practice. I am confident it can be done. The health of our nation and its people depends on it.