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Planting the seed: Why assembly-line medicine could help a hospital's revenue cycle

Posted Apr 22 2010 7:46am

by Paul Roemer

Now that spring is in full bloom, I've been doing a little gardening. My dogs are the anti-gardeners. No sooner do I turn my back after planting something, there they are, happily digging away and ceremoniously digging it up. I don't know if that's because they don't like the particular plant, or just happen to disagree with where I planted it.

Today I discovered the youngest dog uprooted a plant and replaced it with a Reece's Peanut Butter Cup. Perhaps she wanted to grow a candy tree.

One thing that always confuses me about gardening is this: When I plant a one-gallon shrub, I dig a two-gallon hole. I place the gallon shrub in the two-gallon hole and proceed to fill the remaining one gallon hole with the two gallons of dirt lying next to it. Without fail, there is never enough dirt to fill the hole. Perhaps you can tell me what I am doing wrong.

Here is another area of confusion for me: When you walk or are wheeled into a hospital, neither you nor anyone else knows the answer to anything. That is astonishing. Nobody can tell you:

* With whom you will interact.
* How long you will stay.
* What will happen to you.
* How it will happen to you.
* When it will happen to you.
* Who will be doing the happening.
* Exactly when it will happen.
* Whether it will need to happen again.
* What it will cost.
* What you will be charged.
* What will be covered.
* How much you will owe.

I am stupefied. How can anyone run a business like this? My daughter knows what her lemonade stand costs per cup. Wendy's knows the cost of a bag of fries and a large Frosty. Porsche knows the cost of a Cabriolet, the cost of the shift knob, when the wheels will arrive at the factory, when they will be placed on the car, who will build it, who will inspect it, and who will sell it. They can tell you exactly who will touch the car, when they will touch it, and what those people will do to it.

The only thing anyone at a hospital may be able to tell you is whether HBO is billed separately. If I wanted to fly into space with the Russians, I would know the answer to each of those questions. The cost, for example: $50 million.

Why can't a hospital do this? Because it doesn't know the answers. It is not because anyone is keeping this information a secret--it's because they really don't know. The truly strange thing is that they seem to be okay with not knowing.

Recently, I reconnected with a good friend whom I haven't seen in years. He is the vice president of finance for a large hospital. He used to be an accountant--a very detailed and precise profession, unless you're one of the guys who used to do Enron's books. (The only thing I remember about accounting is that debits are by the window and credits are by the door--if I'm in the wrong room, I'm at a total loss.) This business must drive him nuts!

And so I've been wondering; would hospitals be more profitable if:

* They had a P&L by patient?
* They had a P&L per procedure?
* The steps for the same procedure, say a hip replacement, were identical each time?
* They had answers to any of the questions you read above?

Of course they would!

Some areas of healthcare already discovered this tautology--Lasik, endoscopy, the Minute Clinic. Assembly-line medicine. Some people say those words with an expression on their face as though they'd just found a hair in their pasta. The office of my Lasik surgeon looked more impressive than the lobby of my Hyde Park hotel. It may leave a bad taste in the mouth of some, but for others, they are laughing all the way to the bank.

Paul Roemer is a healthcare strategist and the managing partner of Healthcare IT Strategy , which helps health care providers solve business problems using EHR, workflow improvement, and change management.

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