In their book “Redefined Heath-Care” Michael Porter and Elizabeth Olmsted Teisberg expounded value as “the health outcome per dollar of cost expended. If all system participants have to compete on value, value will improve dramatically; at the basic level, competition in health care must take place where health care is created. Value in health care is determined in addressing the patient’s particular medical condition over the full cycle of care, from monitoring and prevention to treatment to ongoing disease management.” This definition certainly has little misnomer. It conflates competition, system players and full cycle of medical condition into value.
While cost is certain, value is a combination of perception, emotion and transcendence. It is capricious and lies in different context. The value of health-care provision in developed countries of different income group is narrower, because in developed countries, majority of the people are middle income group, they are more educated, easily access to health information. It is the lower rung of people who are less educated up against little access to health information; depending on public service, tincture of poorer healthcare that I think where we can dramatically improve value, because the gap is wider.
Another area where we can bring colossal value is in the developing countries. The value of health-care provision of different income group is far wider in developing countries. Wealthy people in developing countries can seek better health-care services in more developed countries in the region. Majority living in poverty are less educated, have little access to health information, have to endure poor quality of public health service.
My article based on utilitarian view is not hedonism, rather consequentialism, is to maximize the utility of health-care management of these two groups of people through innovation.
The governance of health-care services in developed countries
What is the role of the government in health-care services in developed countries? The broad objective is to provide quality health services to the citizen as a whole. It encompasses health information dissemination, adequate competition in private sector, and most of all, to improve effectiveness and efficiency of public health service.
As much of the complaints thick and fast centre on rising health-care costs, besides price increases according to general price index, what actually make the health-care costs escalating? At a cursory level, I gleaned from several health-care providers financial statements to look into the cost structure of this industry. I scrutinize the financial statements of both the well-run private health-care providers and also some public hospitals .As things are, the largest proportion of the costs are staff costs. It goes without saying, health-care is a service sector, and the manpower requirements are higher. This shows that there are plenty of rooms for process improvements. Process improvements are not to lemming like culling headcounts, the gist is to balance between maximizing value and minimizing resources. Process improvements are not all about retrenchment. Retrenchment is palliative on costs not on value. Process improvements are about rational deployment of workforce that provides greatest value. Thus far, the government is the largest employer, it is easy to redeploy redundant staff and provide necessary training for new position. I was inflicted by organization restructuring for many years, and now still no offer coming my way. Certainly, government must set good example at any rate as the most admired employer to make yucky restructuring less blight and pernicious.
As yet the second largest costs are fixed assets and supplies. Properties of public hospital cost rise is malleable to upgrading and refurbishment, coupled with purchasing of new cardiology, orthopedics (demand for hip, knee, and shoulder replacements), diagnostic and therapeutic equipment, and higher price new drugs precipitate costs ballooning, the government in order to seek breakeven and maintain profit margin, resort to large step price hike. The urge for intransigent medical professionals to get latest new equipment is strong and oblivious to the financial support level of the patients and how to achieve balance between better, more effective diagnostic and therapeutic equipment for better healthcare and sustainable financial support level. The key to prevent sharp price upsurge is to have long term capital budget plan to make price hike gradual for replacements and upgrading. Secondly, an independent capital asset review committee set up to review large equipment purchases, gingerly analyze costs and benefits rather than promiscuous purchases. It is certainly frail vanity just to showcase possessing state-of-the-art service equipment, if the usage is low. Unless it is nifty for strategic purpose, then the request must have concrete plan for how to enlarge its existing usage to even up the costs.
What happen if every proposal claims their purchase is strategic but not a vestige of truth? A veritable strategic purchase radically increases clinical values that benefit substantially to the patient, or it helps to reduce the patient’s costs tremendously. If the evaluation also takes into consideration the authenticity of past proposals, the proposer will be gravitated to conservatism in their forecast and prediction.
What happen in order to increase equipment usage rapacious doctor foists unnecessary process what Michael Porter and Elizabeth Olmsted Teisberg mentioned in their book –-overtreatment. In practice, overtreatment sometimes is unobtrusive and difficult to discern, because of the subjectivity elements in the process concern. The crux to deter overtreatment is information flow, the patient can get information of therapeutic and treatment process, say from the web or other means; Second, is a mechanism to report complaints for investigation and make restitution as comeuppance for infraction. Doctor is motivated to be transparent, elucidate to patient the rationale of the therapeutic process and fee charge before treatment in order to save the pain of unnecessary litigation costs and time wasted impinges on them.
The existing costing system is also to blame for averaging out total costs and reflecting it in the price surge. It is certainly warped, unfair to those who do not receive the benefits but bear the blunt of someone else’s burden, willy-nilly. If the worst comes to worst, the fairer solution is for the government to allocate a bigger budget under fixed asset acquisition reserve, let all taxpayers pay for it. No one is ostracized by dint of effective equipment.
Supplies are another big chunk of costs. Some countries in their financial accounting lump medical and surgical supplies, drugs and operation supplies together, certainly, the accounts are obfuscate and not informative, there are no segregation of large cost items; A better costing system is presented according to activity-based, efforts to trim non-value added activities occurred in the operation will be highlighted. It is common place that public health-care providers to cut drug supply costs, source from the cheapest suppliers, and perversely use cheap medicine for clinical purpose. That is a waste of resources if the prescription vitiates its intended effects. Value and costs are symbiotic. A flexible approach will be: if the subsidies for expensive medicine are long term for patient who are up the creek due to abysmal financial condition (according to standard guideline measure), the health-care administrator will make known to the patient the long term effect of subsidies, then request, but not dickering, the patient’s family member voluntarily perform some public services at convenience time in lieu to repay tax-payer’s funds.
Another good example of imbalance in cost and value occurs in public outpatient service. Thus far, all outpatient doctors are general practitioner. To avert these general practitioners become Jacks of all trades conundrum, and cutting through tangles and knots of being dilettantish, be all and know all, they should cum specialize in one or two common diseases, such as renopathy, gastrology, cyesiology, celialgia etc. In their specialized fields, they are connected through web-cam joint consultation to the specialist centre in the particular field or patient referral. Now that the care-giver shortens the process by getting it right the first time, the right therapeutic and treatment process are on the card, enhancing value to the patient.
A good IT strategy is a sine quo non to unleash great value. Each patient will have their “identity address” represented as a folder in the server’s data-base. The health care management software will incorporate each doctor specialized field and assist to allocate patient to the right doctor. Another way of allocation is evidence-based on objectively evaluated and accredited clinical results stored in the system. Patients will self-help at entry point with the aid of the software Experienced duty doctor and nurses are pivotal to guide patient needing help for allocation of doctor and determine the urgency of the case at entry point, unalloyed emphasis on risk assessing vicariously at this point to determine acute care (quelling acute pain etc) needs immediate attention, transfer to specialist care or remain in the queue for normal routine therapy and treatment. This is the crunch point of critical decision making process immediately resonates the quality of the delivery. Few public hospitals or clinics manage this critical process well. Improving this process, you can eliminate altogether the process of registration section and long queue time. If you do it right the first time, certainly patient get the value by recovering faster, attenuate wastage of drug, administration and other resources. You achieve the efficiency and effectiveness.
Patient’s rights to choose doctor also drive doctor to deliver their best value. It is said the trend now is move towards consumer based. Michael Porter and Elizabeth Olmsted Teisberg thought that consumer focus is a cornerstone move to value-based competition. They are reticent about the consumer’s ability to make their own decision due to restricted information available and lack of expertise in the field.
In public outpatient service, there should be a cap for maximum number of patient to be consulted to extricate doctor’s fatigue. You can’t deliver value without spending adequate time to look into the details of the symptoms rather than through “cavalier and quick intuition”. Worst, “cavalier and quick intuition” becomes habitual. The present system favors “quick delivery of every patient”. This phenomenon is similar to Michael Porter and Elizabeth Olmsted Teisberg so-called under-treatment. Undertreatment is prevalent in public outpatient service due to overwhelming in demand for consultation. Doctor is human. There is no incentive but stress for doctor to take longer time enquiring the details of patient’s symptoms if the queue is long and consultation time is fixed. A special bonus or other rewards will be awarded to outstanding doctors accordingly after reviewing and evaluating objectively evidence-based clinical records and accredited clinical results. The process segues inputting into the system. This is part and parcel of performance management.
To reify this process, health-care management software can come to rescue. The software will monitor the consulting process of each doctor, the remaining time left and number of patient still in the queue. This process improvement helps to assuage long queue time in registration and consultation, because the software will help to route patients based on queuing theory. It is a worthwhile long term investment. Sad to say, the present ERP clinical system does not develop program to improve this critical process.
Outsourcing is now not only prevailing in private hospital, but also in public hospital. Some health-care providers classify outsourcing services in the name of purchased and contracted services under operating expenses. It is a direct cost and should be cost of service provided; so be the drug supplies and equipment expensed off, depreciation and direct service staff expenses. A direct cost format provides information about contribution margin movement for service provided. A differentiation between direct and indirect costs highlights the economics of service provided. My personal encounters for contracted services were pleasant experiences. The value of outsourcing service goes up tremendously, so did the costs. It shrugged off the image of only newly qualified doctors are the mainstay of public hospital. Many private practitioners, especially the specialists are willing to be engaged in contracted public health services to stabilize precarious income stream. Therefore, it is propitious to draw up an agreement to the advantage of the public hospital plus performance bonus as incentive. As this is a long term planning, an outsourcing service committee will review service contract, costs, performance and rewards. Just like Michael Porter and Elizabeth Olmsted Teisberg mentioned in their book it is the chain efficiency and competition will unlock outsourcing value.
I see a steep upward rise of healthcare costs in ten to twenty years time, not only Baby Boomers in the US, but also other parts of the world where aging population drastically increase due to decline fertility. A plethora of problems will arise due to retirees do not save enough; or unmarried, separated, divorced; instead of having maid or an adult child to help in case of illness, a sick person may turn to hospital or nursing home. The demand for low cost public service will rise sharply. When we reach that stage, a steep cost rise will happen, because many countries aware of it, but no concrete action plans to smooth the learning curve. If we start geriatrics earlier, getting infrastructure ready, cooling the demand of new drugs for common old age illnesses, develop generic drugs, educating about gerocomy (It is low cost and will strengthen prevention care), building a pool of healthcare specialist and personnel, building specialized public hospital for aging population. Every step we take now will reduce costs in the future.
Some countries have medical insurance scheme to alleviate part of the burden of the patient during contingency. The idea is good, but the bulk of the problem is its iniquitous; large numbers of healthy people are subsidizing small number patients’ financial needs. To fine tune the system, is to assess the risk of claim. It should operate like motor insurance system where reported accident rate determines higher premium payable; In other words, healthy people will pay reduced premium, and only hospitalized patient in the high risk will pay higher premium. To stay healthy becomes an incentive for individual to keep their premium low. Another concern is the threshold for insurance claim, if setting too high only fatten the agents, because the pay out is not in proportion with the premium received by the agents just to consider the number of people subscribe for medical insurance.
For practical purposes, instead of hallowing Michael Porter and Elizabeth Olmsted Teisberg “medical condition” ², which is multifariously intractable and atypical, vacillating between long commonly understanding of Medical Glossary, let get back to the basics of using the standard and universal terminology, like hysteritis, bronchitis, and rhinitis rather than anything else. Standardization will help software developer and also users.
There are pros and cons to have a health-care provider to manage the full cycle of care, the present system adequately handles curing process in a discrete cycle, it gives the patient choices and flexibility to change course if they find treatment is not to their satisfaction. What I see as imminent problem is the incongruity in the process of treatment that prolongs delivering results and intensifies the patient’s suffering. That is truly value destroying. Supposing a patient has to go through the process of registration, consulting doctor, and is instructed to have lab test to aid diagnosis, and back to doctor again for treatment. What make things worse is the lab not under the same roof, the patient has to move to test centre at another location. It is sickening if the patients awaiting for lab test is in a long queue and at last the lab test done, but waiting for lab technician to process the sample and deliver result, sometime the lab technician may not be able to deliver the outcome on the same day, and finally the result reaches the doctor, but the doctor may not be there on the same day to finalize her treatment. The process of sheer purgatory is ineffable, not only to the anguished patient, also the family member accompanying the patient. An integrated system will help to send report or image to the patient’s personal folder and forwarded to the doctor, the bulk of the problem is apposite operation improvements.
Many of the problems mentioned in Michael Porter and Elizabeth Olmsted Teisberg’s book are the result of concomitant self-interest take precedence's health care system, rather ascribed to the dereliction of health plan.
I am demurred at the idea of public health-care service is to profit seeking. Not only physicians in public sector, so do many private practitioners not seeing maximizing personal wealth as their goal. They want to live a decent living but morally. That is why we read news about some volunteered cosmetic surgeons spent their free time performing Cleft and Craniofacial surgery free of charge for children in developing countries. In particular, these surgeries are worth thousands of dollars for each operation.
The government needs not to duplicate or crowd out the private practices but assiduously ensure competition rules for those who can afford for choices and helps to provide reasonable care for those who can’t afford a better choice ensnare in public health-care system. If the government pegs the percentage increase in health-care costs with the rises of lowest echelon wages and subsidizes the difference, that way, will motivate the public service providers to improve internal efficiency.
The Governance of healthcare service in developing countries
This is an interesting ethical story ³ of biologist Garrett Hardin’s lifeboat example whether a responsible captain should risk the lives under his command to rescue a capsized boat. The implication is what the book says “to what extent should individual risk their own well-being for the well-being of others?” It extends the meaning to rich countries do not have any obligations to poor countries, as they endanger the well-being of their own populations were they to admit the world’s poor in the rich world’s “lifeboat”. If the world’s wealth was shared out equally, it might only mean that everyone had too little. The book said Hardin argues that “altruism can only apply on a small scale. Population is the root cause of both hunger and poverty.”
A sigh of relief, not everyone in rich countries is impervious to extend their help to the poor. World Health Organization (WHO) is one of the non-believers. WHO has spent much of its financial resources helping developing countries in Africa and Southeast Asia. In their broad mid-term strategic plan, it stressed its result based management to achieve myriad objectives. Notwithstanding, there are plenty of scope to trim headquarter administration costs.
As I mentioned in my introduction paragraph, the value to improve healthcare rise sharply in developing countries due to bigger income gap. To ameliorate developing countries such as African countries health care problem is first to resolve economic progress. To get rich quick, African countries are to be in control of critical natural resources that are low costs and high yields.
Besides, is to institute good governance. Good governance manages the controllable and takes measurable steps to control contingency. It ensures sound economic policy implemented, improves employment and household income. In Africa, good governance also overcomes other incapacitating factors such as resisting being browbeaten by and at the behest of the negative external political influence; has big picture in mind and willing to be more conciliatory to stop belligerent in tribes and factional long standing feuds, beefing up education level, fighting corruption,control and retain the flow of talents seeking for greener pasture in the richer countries; these factors are interrelated; by then, exalted living conditions certainly improve health care quality.
To alleviate the resources burden in developing countries, first and foremost, is to establish a workable healthcare model, a model which is commensurate with their economic developments. WHO can assist African countries to establish a regional medical share services centre to buttress economic use of expensive resources. This regional share services centre will be equipped with better diagnostic equipment and a pool of qualified health professionals; It also play a role of promoting sharing of health-related knowledge among the countries, and provide health-care training and public health education to locals.
WHO cannot depend on volunteers to resolve long term issues. The crux to resolving personnel shortage is to train and mobilize a large contingent of local health care workers. Their job is to cater the basic needs of health care and preaching health information. In Africa continent, many are illiterate, afflicted common diseases, such as HIV/AIDS, Hygiene, Hepatitis, Malaria, these can be early prevented by health education therefore health information dissemination is of paramount importance. Their training is practical, central around targeted common communicable and non communicable diseases. Their knowledge level is in between nurses and doctors
Shrug off the bigoted belief that complementary alternative medicine can only heal but not treating person. There are many low cost complementary alternative medicines provide equally efficacious intervention and have scientific basis; even for life threatening deceases like HIV/AIDS. WHO should source and research the clinical results of these low cost alternative treatments and integrate these economic but equally efficacious complementary alternative treatments with western treatments in training the local. These trained local health professionals mesh with the share service regional centre for technical assistance via web-cam meeting or joint consultation. WHO can also engage low cost producer to manufacture generic drugs and drugs commonly in use in developing countries.
I notice a country who implemented this system during nascent stage of economy with certain degree of success. Once this model achieves success in one region, the same model can be improvised to implement in other developing regions. This method dovetails WHO result based management, because it tailors to local economic evolvement, extending the help to the largest part of the population, alleviate financial burden of WHO.
Notes:
I was inspired by the resounding work of Michael E. Porter and Elizabeth Olmsted Teisberg. Both have written a book “Redefined Health care- Creating value based competition on results”. While I am reticent about some of the ideas enunciated in the book which I will mention in this article; there are also percipient opinions deserve attention. My article also does not intend to address problems in the US, as they are adopting unique health-care plan system which is not adopted in many developed countries. According to “The Economist” (Jan 2006), in US, a large chunk of health care is paid for by tax-subsidized employer-based insurance. It also praises America’s system has some clear strengths. Consumers get plenty of choice, and innovation is impressive. It said “the American system has big problem, notably inadequate coverage, spotty quality and high cost.” I address the health-care issue for developed and developing countries as a whole adopting utilitarian view.
2. In their book (page 5), they reason the use of term medical condition rather than disease, organ system, illness, or injury because it will prove to be more closely tied to patient value.
3. Lifeboat example is extracted from the book “101 ethical dilemma” By Martin Cohen
