Quality and Cost; Why is This So Challenging?

Does Quality Drive Costs or Do Costs Drive Quality?

By Gina Thomas, RN, MBA, Lumere, Chief Development Officer 

Costs = the amount that is paid to purchase something

This is an old topic that should be worn out. We have yet to conquer it.

 

Quality = an essential character of person, place or thing 

Quality isn’t just an effect of the function and features but how it’s used. In the case of healthcare, indications should be considered for the benefit to the patient. 

I’m not going to belabor the point but let me mention a few trends that indicate fundamental problems with the current state of healthcare in the U.S.

  • Land of plenty – We have over 10,000 prescription drugs available to us in the US, which leads to a ‘this drug will cure all that ails you’ mentality.  However, experts estimate that perhaps one-third of all US healthcare spending (COSTS) produces no benefit to the patient and some of it results in harm (QUALITY).
  • While the US leads the world in healthcare costs, we do not come close to ranking high on quality of care. In fact, we rank poorly in life expectancy and other indicators of quality.
  • While we know that higher intensity of care does improve outcomes, we spend a great deal more than other countries to achieve a similar degree of value. Examples of our higher costs include waste and variability in care that often lacks any evidence. Other countries don’t have nearly the resources or technology of the US, yet their value relative to the cost is markedly better.

Life expectancy for both men and women has increased slower in the U.S. than in comparable countries

Remember I wrote about  Dr. Tower  in my last article about the implant that he chose for his own hip replacement. The cost was not minimal and certainly poor outcomes demonstrate a lack quality. 

 

Our children will not be able to afford healthcare and the cycle will continue. 

This is old news but it’s worth repeating. We can’t give up-we can’t forget—OUR LIVES DEPEND ON IT!

ACTION on Quality:

 

· Review your processes to investigate quality compared to costs while asking yourself (and others) these questions to determine quality and value:

 

  • Will the quality initiative achieve a definite, measurable improvement in quality of life for the patient or overall health status?
  • Is the measurement process in place to ensure the quality benefit is achieved as projected?
  • Is the quality benefit derived from an unbiased, reputable and broad source of evidence?
  • Does the quality benefit apply to general populations or only certain patients and types of diagnoses or procedures? Applying a general use guideline to specific patient types results in inappropriate use and unlikely improved quality. If the guideline only pertains to specific populations, how will this be managed? Are clinical guidelines in place to manage these specific scenarios?
  • What are the perceived benefits by those involved and what is their source of information, e.g. practice, expertise, conference, outside company?

  • Provide ongoing access to the above information through conversations, formal meetings or other venues with those most affected, e.g. service line chairs, practicing physicians, quality leaders. 
  • Remember, it takes an adult approximately 32 repetitive times to absorb and learn new information.

 

ACTION on Costs:

  • Review your processes to investigate costs parameters and avoid analysis paralysis, i.e. trying to solve for total costs when consideration assumptions can be applied.
  • Understand the costs perceptions from those directly involved, e.g. costs to the organization, cost of time and money to the individual provider and misunderstanding of costs and charges.
  • Provide access to cost data in a clear format to ensure physicians comprehend interdependencies between quality and costs. 

I will leave you with this last example of the interdependencies of cost and quality through a recent physician survey across multiple specialties:

90% of respondents felt increasing physician access to cost data would positively impact quality of care. Only 40% said their hospital or health system have measures that accurately capture quality of care for their specialties and patient population.

 

Look to MAKO in joint arthroplasty for a good example of cost and quality complexities around procedure types or patient populations.

Evidence indicates a lack of substantial improvement in clinical or operational outcomes and the extremely high capital and recurring cost associated with the MAKO robotic system. Its use in joint arthroplasty is likely not justified at this time. However, one flawed cost model suggests that use of the MAKO robotic system is cost-effective for unicompartmental knee arthroplasty at high-volume hospitals.

Patients want more also

Patients are looking for more information on this topic as well and aren’t necessarily relying on websites like HospitalCompare or Healthgrades but turning to non- healthcare sites like Yelp. 

“…But value—true consumer value—is not simply “quality minus cost.” (Or quality divided by cost…there seems to be a disagreement among academics about whether subtraction or division is more appropriate here.”) www.gisthealthcare.com/gist-blog 

 

Quality and cost will always be tied together, and we shouldn’t accept anything less than a gold standard of high quality of health with longer age expectancy at a reasonable cost.

 

Gina Thomas, RN, MBA – As Lumere Chief Development Officer, Gina spearheads commercial strategies and helps guide product vision. With over 35 years of healthcare  experience, starting as an emergency room nurse and later becoming a nursing executive, she brings a wealth of knowledge to the company, including strong expertise in preparing for new payment models, aligning clinicians, service line best practices, and executive-level approaches to resolving fragmentation in healthcare. She is passionate about patient  advocacy. On a personal note, she has been married 32 years; has 2 daughters who she adores; and she says they have even found great guys who they married! 

Sources:

 

Value-Based Payment Hits the Tipping Point. https://www.businesswire.com/news/home/20160613005067/en/Value-Based-Payment-Hits-Tipping-Point

Lumere Physician Study 2017

Morris M, Abrams K, Elsner N, Gerhardt W. Practicing Value-Based Care: What do doctors need? Deloitte. 2016.

Gisthealthcare.com

Robert Wood Johnson Foundation, “Reducing Overuse and Misuse: State Strategies to Improve Quality and Cost of Health Care,” January 2014.