Managing Healthcare Costs: Harvard School of Public Health

Today’s Managing Health Care Costs Indicator is 12

I’m taking a break from my usual commentary on news, opinion pieces and recent research to celebrate great work done by 12 groups in this fall’s class in “Managing Health Care Costs” at the Harvard School of Public Health. The final project (in groups of 4-5) was to describe an innovation that could genuinely lower health care costs, and build a business plan to make it happen. (Full information on the project is on page 40 of the course syllabus, which is available without Harvard ID).

The class is comprised of 58 students, including physicians, medical students, public health students, dentists and lawyers. Most will graduate with an MPH or an MS in Public Health this May, although a minority will graduate with an MS in May, 2013.

Here is a list of the projects, with brief descriptions which probably don’t do each project justice. A few of these projects mirror work happening right now – although many represent potential innovation that is not, to my knowledge, yet being tried. The good ideas represented here are one more reason to be optimistic that we can effectively address the rising cost of health care in the US.

Diabetes Disease Management

Web-based education and training for patients, case managers, and physicians, with a decision-support module for electronic medical records to promote evidence based practice.

Reference Pricing

Firm will provide consulting and on-line tools to facilitate reference pricing initially in New Hampshire, and later expand to other geographies. Note that this is already happening – see for instance Castlight, Thomson Reuters, Change|Health Care, and Health Care Blue Book. See Catalyst for Payment Reform for more details on reference pricing.

Farm Fresh Food

Nonprofit will provide crates of locally grown food with appropriate cooking instructions and other ingredients to be distributed through schools, with initial grant funding and graduating to redirection of current farm subsidies.

Decision Software for End of Life Care

Software and consulting services to help hospitals decrease variation and futile care at the end of life

Real Time Cost Tracker

Software and GPS device to simplify implementing time derived activity based costing (TD-ABC) in hospitals. See a post on the Robert Kaplan/ Michael Porter article in HBR this fall. We have to know where the resource costs are to lower them - and this would be a very helpful tool to lower the barriers to TD-ABC.

USB Medical Record Card

Expanding on the experience of using cards with embedded chips in France and Taiwan to improve coordination of care and decrease duplication.

Handwashing Monitor

Putting cameras near sinks outside ICU patient rooms and remotely monitoring handwashing. This approach has been successful at decreasing contamination in meatpacking plants – a good example of taking learnings from other industries.

Readmission Prevention

With a predictive modeling tool to identify those at highest risk of readmission

Medicaid Fraud Detection

Using a combination of software and human claims auditors

Pioneer Accountable Care Organization

Developed a business plan to convert a primary care practice to a Pioneer ACO

End of Life Surgical Check List

Add-ons to hospital EMR systems to alert surgeons and others to likely outcomes based on the terminal patient’s comorbidities.

Thanks to this year's class for great projects!

I've been finishing up lectures for the final classes in a health care management program over the last week- and so I'm behind on blogging. I'll do some catching up this coming week.

In the meantime, I've posted the final slides from the Fall course, Managing Health Care Costs, at Harvard School of Public Health. Here are my eighteen observations - the slides contain substantially more detail.

Observation One: Sick people are expensive to care for!

Observation Two: The problem in the US is cost per unit, NOT utilization

Observation Three: We are too sedentary, too fat, and smoke less than we used to, but still too much.

Observation Four: We don’t like to make tradeoffs!

Observation Five: There is HUGE Variation

Observation Six: Fee for service is toxic (but everything else is difficult)

Observation Seven : There is a cultural clash between those seeking to preserve the “art” of medicine, and those looking to create more reliability and cost effectiveness through industrial redesign

Observation Eight: We pay a heavy economic and noneconomic price in our effort to banish uncertainty

Observation Nine: We often promote competition that does not generate new value for patients, and reject competition that could create such new value.

Observation Ten: We “medicalize” many conditions, driving up cost

Observation Eleven: Many see a primary care shortage

Observation Twelve: We are reluctant to regulate prices (and when we do, we often do it poorly by design)

Observation Thirteen: Providers must consolidate to allow for more integrated payment; however, provider consolidation increases the cost per unit

Observation Fourteen: We often mistakenly think that we can measure the cost of health care by medical claims alone

Observation Fifteen: You can’t ‘reform’ an industry representing 17% of the GDP without angering many, and without unintended consequences

Observation Sixteen: Americans will pay for a larger portion of their health care out of pocket over the coming years, and this is likely to lower utilization

Observation Seventeen: Physicians are more likely to prescribe treatment associated with high margins for their practices

Observation Eighteen: There are no magic bullets

1/14/12 Addendum: Here's the OECD list of out of pocket payments. Remember that the total cost of health care is so much higher in the US than elsewhere that a lower percent of health care spending still means a higher portion of personal income. Thanks to Vegncook for comments.