|Goin' goin' gone!|
The fly in the ointment. The monkey in the wrench. The doc's raised hand at a hospital board of trustees' meeting. Call it what you like, but sometimes our most cherished assumptions and best laid plans have a way of going all akimbo. True to that tradition, curmudgeonly Dartmouth authors Stephen Rauh, Eric Wadsworth, William Weeks and James Weinstein examine the "illusion" of expecting "lower costs" to come out the back end of a health system system after "quality" is put in the front end.
The authors' real focus is on hospitals and define "quality" as any intervention that reduces the utilization of health care services (versus other definitions). Despite the narrow view, the Disease Management Care Blog believes the article makes an important and yet obvious point: large and small health care organizations have rigid cost structures that cannot be flexed. As a result, any increase in quality - such as reducing length of stay, admissions, readmissions or surgeries - mostly results in additional dead space capacity, not bottom line savings.
Clinical improvement can reduce costs is in the general category of supplies and medications. Unfortunately, those costs are at the margins. Just because there are fewer readmissions won't mean all those expensive operating rooms. equipment, personnel costs and other administrative overhead will simply go away. They don't. They'll be idle and cost just as much.
Some economists will argue that hospitals can take beds off line and furlough nurses. It's also been pointed out that multiple health systems can regionally consolidate high-cost low-frequency services.
Unfortunately, the quarter to quarter business cycle facing the typical hospital administrator doesn't really accommodate that kind of wishful thinking. The only way out is to find other revenue by either charging more or providing other services.
Despite many valiant attempts, the DMCB never managed to close another hospital wing.