In healthcare, complexity costs and kills. ObamaCare will increase complexity. You do the math.
Posted Aug 13 2009 6:19pm
Complexity is considered bad in most business activities because it reduces efficiency and therefore costs money. In healthcare it is worse because it also kills. Anything done to healthcare that increases complexity will waste money and lose lives.
Operations experts in successful businesses such as Toyota, Ford and Intel spend most of their time simplifying processes. “Simpler” translates to faster, cheaper, better quality and fewer errors.
In healthcare, complexity is now threatening to swamp the whole system. Roughly 40% of all the dollars going into healthcare never come out. They are consumed by the middle: by millions of pages of rules and multi-layered organizational charts; by regulatory compliance that leaves too little time for patient care; by contradictory and perverse incentives; and by centralized command and control that is highly inefficient. This is waste – pure and [not] simple.
Compared to the cost-of-complexity, the costs of the uninsured are a drop in the bucket.
Before you shout “single payer,” make damned sure the process you choose to implement is much simpler, less bureaucratic, and more user-friendly than what we have now. Single payer is not automatically cheaper
or more efficient.
Adding over a thousand additional pages of ObamaCare to our current incomprehensible “system” for healthcare financing is guaranteed to do one thing: increase costs. (As proven over and over and over but apparently ignored in Washington, you can only reduce true costs by treating root causes not by palliating symptoms.)
I can also hear some people rationalizing that, “Humans are infinitely complex and the system simply reflects their nature.” As individuals, humans are exceedingly complex but the system need not be. Indeed, it must not be. The degree of simplicity and user-friendliness is the measure of how well planners, regulators, and politicians do their jobs. You draw your own conclusions about healthcare.
• In one large medical Center, it requires 57 separate steps to submit a bill for payment. • At Vanderbilt, it requires 87 separate steps – each involving multiple committee meetings – just to approve a research project. The flow Chart shown above is courtesy of David Dilts, PhD. • HIPAA’s draconian regulations prevent me from emailing letters to my referring doctors. Its security restrictions prevent nurses and doctors from learning how to provide better care and to deliver more efficient service. • The book that lists medical billing codes is over 600 pages long (10 point font) and the codes are constantly being changed. • Prove for yourself the excessive complexity in healthcare: just access the FDA or HHS web sites and look at the organizational charts or the procedures for approving a new drug. • In the name of protecting us and serving us, bureaucratic complexity is consuming hundreds of billions of dollars each year. • What I wrote one year ago unfortunately gets truer every day: “We’re drowning and you’re all coming with us.”
The more complex a system, the more steps and people involved, the more chances exist for miscommunication and errors. In business, this produces waste and reduces profits. In healthcare, miscommunication and errors due to excessive complexity can cause death.
Anecdotal experience, usually dramatic lawsuits, can be found almost daily of some medical disaster, such as an overdose of the correct drug causing death. Dosing errors are usually simple, preventable miscommunications. Hard scientific evidence abounds. The Bristol Report from Great Britain showed that complexity-causing-death was not a personnel issue but a system indeed cultural problem.
The time (and money) it takes to get a drug through the FDA delays new treatments and discourages innovation. Effective new treatments are not researched and/or are not made available in time for seriously ill patients.
Over and over we hear, “The system is broken.” Those who say this are dead right (pun intended). The system IS broken and we need to fix the system not rearrange dollar flow or deckchairs on the Titanic. One of the most broken parts of the system is the middle. It is bloated, wasteful and pulling us under with its massive complexity.
It is much less satisfying to identify the system as the culprit rather than to lay the blame on an individual or group. Nonetheless, complexity is a system problem; it is the system that is “broken;” and therefore, it is system that must be fixed.
If you want to start to fix (cure?) healthcare, SIMPLIFY –make things much less complex. What will ObamaCare do?