Understanding Health Care Costs

In the current JAMA there is an article describing how medical students should have a better grasp of the costs of health care especially the complexities of many procedures.

The article states:

Teachers can demonstrate the consequences of seemingly simple decisions. For example, an order for an inpatient chest x-ray requires the following: someone schedules the test, someone informs the patient that the x-ray is being done and why, someone transfers the patient from the bed to a stretcher or wheelchair and transports him or her through hallways to the radiology department where the patient spends time alone in the holding area, and then someone leads the patient through maneuvers to obtain the radiograph. These steps are reversed to return the patient to his or her room. A radiologist interprets the image and creates a report. The clinician who ordered the test examines the report and then makes a decision based on that information. Then, the patient and often several family members need to be informed of the findings and how those findings will affect the next steps in care. This is not a simple process. Now multiply this by the number of patients under a team's care and the number of tests ordered for each patient. 

Consider the challenges of more complex diagnostic tests, such as colonoscopy. Then think about the influence of the patient's age and health status on that process. Having students observe each of these steps for tests they order on some of their patients would emphasize the effects of those decisions on patient comfort and resource utilization. This exercise would complement the strategy of showing trainees the prices of ordered health care services, an approach that has produced mixed results on cost reduction. It does so by translating prices in monetary units into real resource (primarily labor) requirements.

In 1991 I wrote a paper with Mike Sununu which examined the  number of steps in performing a nuclear scan (see the steps above). We examined ways to reduce the steps and in turn the costs. The article in JAMA raises a much larger set of issues. Health Care providers as a result of Government regulation as well as legal liabilities are often forced to go through steps so arcane and complex that they drive costs to extreme levels.

Health Care administrators all too often focus on collecting maximum benefits and fails grossly to address the issue of cost reductions, and they do not understand the work flow environment. The JAMA article establishes a paradigm for a set of simple procedures. However the overhead is exploding. As we have shown in a prior posting the only growing industry is health care, not because we provide more and better care but simply because it is so complex and arcane. No business person would tolerate such inefficiencies. However it is the Government which all too often makes this worse, just look at ACA.

With the EHR now coming to the fore, I observe several phenomenon, they drive costs up and care down. Namely the use is as follows:

1. The physician enters the data looking at the screen and not the patient. Osler would not at all be happy.

2. A second person follows the physician around typing into the system.

3. A physician takes notes and then has another person transcribe them after the fact into the EHR.

The variations go on. I have yet to see an EHR provide useful information for patient care. It is now just one more added burden. Using the work flow analysis as described above one could readily calculate costs, the benefit is de minimis but the cost is extraordinary.