Productivity and Efficiency In Healthcare: Part 1—Macro Perspective

    The Institute of Medicine  and the Institute for Healthcare Improvement  have articulated the principles of a high quality, high performing healthcare system to include being “safe, timely, effective, efficient, equitable, and patient centered,” the so-called “STEEEP” principles. Efficiency and productivity are often taken to be interchangeable terms. In 2009, Hussey and colleagues published a review of healthcare efficiency measures.  They found 265 measures in peer-reviewed literature, with little overlap, but few had any data on reliability or validity, (2.3%). In a commentary, Binder and Rudolph observed:

According to this review, nearly all of the studies under review defined efficiency by the resources and costs involved in particular functions within health care, without regard to the quality and outcome of the functions. While the number of workers and widgets needed to accomplish a task is certainly a factor in understanding efficiency, so is verification that the task was necessary in the first place, and that the task led to a worthwhile accomplishment. A task that was done for no purpose or botched is inefficient no matter how many resources were used to undertake it. Health care services that are clinically unnecessary or lead to poor outcomes should not be compared with services that are higher quality.
Our disappointment in the literature compounds when we consider the unique link between quality and costs in health care—a more profound and complicated link than in other industries. Arguably, quality problems are the single most significant source of high costs in health care, so efficiency studies without quality considerations leave out a critical variable. Worse than leaving knowledge gaps, however, is the risk of producing irrelevant or even spurious conclusions about our health care system at a time when there is such a strong need for good answers. Studies that measure only resource utilization for procedures need to make the following assumptions about the procedures they select for investigation: (1) that the studied procedures are needed and/or appropriate, because if they were unnecessary they were inefficient by definition, (2) that the outcomes of services are generally uniform across settings and populations, because studies do not control for variation in outcomes,and (3) that the larger set of comparison data on the efficiency of similar providers or hospitals, used in stochastic frontier analysis (SFA) and data envelopment analysis (DEA), comes from necessary and appropriate procedures that led to a generally uniform and predictable set of outcomes.

    The authors then proceed to list evidence that spending on health care services is highly variable and does not lead to improvement of population health. I think this approach weakens the value of their commentary, as it makes the assumption that physicians are in the business of “health.” Personally, I treat patients with significant chronic diseases, but I cure fewer than 1% of those with whom I am involved. When successful, I do not restore my patients to health, I restore them to life at home with some degree of independent function. Many of the factors that determine their ability to do this, though, are not medical, but reflect a series of social and personal determinants that I am powerless to affect.
    A more recent commentary by McKellar and associates tries to move the debate forward by refining the notion of productivity.  After defining productivity in classic economic terms, they note that “throughput-based metrics,” such as RVU productivity, are appropriate in most industries:

But while medical institutions are intended to provide medical services, productivity measurements that only consider throughput are fundamentally flawed. There are two primary problems: medical services do not, in themselves, constitute valuable medical care, and not all medical services are created equal. There’s a clear difference between health care and most other goods that people buy. When someone buys a cheesecake or a pair of pants, they make that purchase because they want to eat the cheesecake or wear the pants. By contrast, nobody gets an MRI just because they want an MRI – rather, people consume medical care because it’s supposed to make them healthy. In economic terms, that means health care is not a consumption good: it doesn’t directly contribute to making anyone better off, but only contributes by increasing another output, in this case by improving health.

    They define useful treatments as those that are effective, done well, and well-matched to the patient. They also point out that experiments with bundled and global payments encourage providers to withhold care, increasing the importance of having good metrics that measure something other than throughput.
    Efficiency and productivity, though, are not quite the same thing. As articulated by the IOM, efficiency means expending the fewest resources necessary to treat the patient in the best possible way, whereas productivity is, as defined above, a measure of throughput. But are efficiency and productivity in oppositional tension? I think many times they may be.
Several years ago Swenson and associates argued:

Our current health care system is essentially a cottage industry of non-integrated, dedicated artisans who eschew standardization. Services are often highly variable, performance is largely unmeasured, care is customized to individual patients, and standardized processes are regarded skeptically. Autonomy is hardwired into the system, because most physicians practice in small groups with limited oversight or coordination. Even those who work in larger groups, including academic medical centers, create individualized care plans that cannot be integrated with care in neighboring “out-of-network” facilities; they cannot treat and track patients over space and time. Today's system usually pays for volume rather than value, and we get what we pay for: more tests, exams, surgeries, and appointments. “Good doctors” are celebrated for their unwavering dedication to doing whatever it takes to care for their individual patients, which often means swimming upstream against the system, rather than relying confidently on it.

As a counter to this reality, they argue for guidelines and protocols, stating:

The massive investment in clinical-guideline development and dissemination is predominantly being made by experienced professionals and researchers who believe that unscientific and clinically unwarranted variation in practice is widespread, injurious, and costly. When properly constructed, guidelines are grounded in science and thoroughly vetted by experts before being adopted. Of course, undiscerning enforcement of even excellent guidelines can be dangerous. Many patients have complex multi-system diseases, allergies, or genetic conditions that are valid contraindications to a given protocol, and guideline-supported care must be tailored to the patient's needs. Most patients, however, will benefit from properly vetted and implemented guidelines.

    Today these three points of view are in conflict—the artisan, the businessman, and the scientist are all battling for supremacy, although the artisan appears to have lost out. But what if the real answer is a blending of perspectives? We used to talk about the science and the art of medicine. If we want patients to be satisfied with technically correct care, we need to mind the art. Is it possible to have a system that is both efficient and patient-centered, and if so, what might that might look like?

17 October 2014

Further Reading

Clinical Microsystems
 Clinical microsystems are composed of front-line clinicians engaged in direct patient care.  Despite a lack of formal authority, they are the key to successful healthcare reform.

Nursing Staff Turnover
If empowered teams of clinicians is the key to effective, efficient care, then staff turnover is Achilles' heel. Nationally, RN turnover exceeds the cap needed to maintain patient safety and quality of care. The problem and approaches to a solution are considered. 

Physician Engagement
Is physician engagement a strategy to promote physician leadership, or a code word meaning how do we get the doctors to do what  we want?
  
 Strategic Human Capital
Healthcare organizations need to realize the economic value of experienced teams of clinicians able to provide highly reliable care and to recognize the importance of maintaining team integrity in times of surges in patient volumes.