ATLANTA, GA – As the debate over how to reform America’s health care system continues, one expert says that the political efforts miss the point. “Neither the Democratic nor the Republican proposals are really looking at increasing efficiency”, notes Frederick W. Croft, speaking at the Society For Health Systems/American Society for Quality Joint National Conference on Health Care in Atlanta. “Until we can make our hospitals and physician groups work cost-effectively, the cost and quality problems in health care will keep growing. Passing laws won’t solve the problems.”
Mr. Croft, Managing Partner for Los Angeles-based consulting firm PVM Partners LLC, claims that activity-based costing (a method of determining what operations – facilities, doctors, diagnoses, etc. - in a health care facility make or lose money) can guide efforts to identify the most efficient practices. And, since efficiency is generally related to reducing poor processing and confusion (which, in turn, are primary causes of medical mistakes), the effort to find low cost methods can also improve the quality of patient care. “North Mississippi Medical Center increased patient satisfaction by 10% while saving $11 million using this type of data-driven approach”, states Croft, who has implemented similar programs in hospitals and clinics throughout the United States and whose book, A World Without A Safety Net: Walking the Tightrope to Business Performance (iUniverse, 2009) includes case histories showing the relation between costs, efficiency and profits.
This approach moves in the direction of evidence-based medicine, a method that lessens the substitution of higher-cost for lower-cost treatments if their value isn’t proven. Evidence-based medicine is widely supported by health care management experts, but has proven difficult to take from concept to usage. This is partly due to data: since many hospitals and physicians aren’t using electronic medical records (“EMR”), it’s difficult to gather the data to evaluate different treatments. “It’
Is there an alternative?
But efficiency programs, including Mr. Croft’s activity-based costing approaches, can produce savings that increase care to underserved populations. “Many hospitals – and doctors – already care for people who can’t afford it. The only way they can afford to do this is by finding money in other parts of the business. Cost analysis and efficiency are one way to do this.”
Does cost control and efficiency produce better care? If more findings support Croft’s costing findings, one of the most important members of your surgical team may turn out to be the accountant.
