Flatlined: Resuscitating American Medicine

Chapter 21. Reducing Spending on Hospitals and Specialists

The United States is paying for high-performance hospitals but not getting them. What would a true high-performance hospital look like? I interviewed Dr. Lucian Leape, adjunct professor of health policy at Harvard School of Public Health, who is a pioneer in hospital safety and quality. When I asked how he framed the difference between safety and quality, Leape said that they are always found together. He thinks of quality as involving process measures: for instance, did a patient get antibiotics before surgery? He thinks of safety as the outcome measure of quality: for instance, did the patient have a wound infection? According to Leape, two U.S. hospitals best exemplify safe, high-quality hospitals: Latter Day Saints (LDS) Hospital in Salt Lake City, Utah, and the Mayo Clinic in Rochester, Minnesota. I flew to Salt Lake City to interview one of the leaders in the quality movement, Dr. Brent James, who was a cancer surgeon before he became consumed with creating quality health care systems. James came from Harvard to LDS Hospital in1986. But even before his arrival, the hospital had been concerned about quality: as early as 1964, a visionary had outfitted the LDS intensive care units with computers that filled seven office-sized rooms. LDS is part of Intermountain Healthcare, a statewide group of hospitals and clinics. At LDS, James met Steve Busboom, 243 21 Reducing Spending on Hospitals and Specialists The way to pay specialists and hospitals so that they reduce waste is to bundle together their payment in a flat rate for an entire episode of care—from admission to return home—and to monitor quality. CH021.qxd 10/7/08 10:15 AM Page 243 Intermountain’s vice president of finances, who was struggling to find a system to bill insurers more accurately. All hospitals have a list of billable services called a charge master, and Busboom was struggling with the 25,000 items on the LDS charge master. James and Busboom joined forces to examine not only the variations in care but also the cost of these variations . When I asked who had paid for that work, James told me, “Steve and I talked the system into it. He was working on billing, so they thought they might save some money.” James studied the work of John Wennberg and his colleagues at the Dartmouth Institute for Health Policy and Clinical Practice. This group’s work revealed the 160-percent regional variation in Medicare spending and demonstrated that high-cost areas were also low-quality areas with increased mortality rates. James expected to find variations among practices within the same hospital, so his first study was to examine six common procedures. He said, “I had no appreciation of how common [these] common procedures are.” A small number of procedures and diagnoses consumes a vast amount of hospital resources, a situation analogous to the health care system as a whole, where 10 percent of patients consume 70 percent of resources. For instance, consider a transurethral prostatectomy (TURP), a common procedure performed in elderly men whose prostate glands enlarge and obstruct the urinary tract, preventing or slowing urination. To perform a TURP, a urologist inserts a narrow tube up the penis and then removes a portion of the prostate gland to increase urination, boring an opening for the urine to pass through the prostate gland. James and his investigators analyzed the variations in care among TURP patients and found ninety separate factors. Although patient selection and performance of the procedure are as standardized as any intervention in medicine , James said the closest pattern for any two patients was a 60-percent variation from high to low. (That is, if one physician was using ten of something to get the job done, the closest any other physician came was to use sixteen of the same thing.) The widest range of variation among physicians performing a TURP was 460 percent (ten versus fifty-six of the same thing). The average pattern for any two patients was a 160-percent variation among the ninety factors. James said, “I could scarcely figure out what a TURP was.” The investigators also found a 100-percent difference REFORMING AMERICAN HEALTH CARE 244 CH021.qxd 10/7/08 10:15 AM Page 244 in the cost of care, with variations spanning a spectrum from “very high” to “very low.” James said he had always believed that some surgeons...