What If the U.S. Health Sector Were as
Productive as
The
Average American Worker?
Suddenly,
the action for tackling skyrocketing health care costs has shifted from
Congress to the states. Now, Massachusetts, Pennsylvania, California,
Oregon and Minnesota have weighed in with plans of their own to fund
health care for their uninsured. Apart from a few idiosyncratic
differences, the grand idea that all plans have in common is to make
health insurance mandatory.
A key
reason for doing so is the dissatisfaction with health care costs that
now cause 55% of all personal bankruptcies and force poor people to seek
the most expensive care possible in the ER. Add to that the facts that
uninsured people have a 25% shorter life expectancy, do not seek or
receive preventive care, and cannot afford the high deductibles in the
medical savings accounts reforms.
When
these state plans go into effect, they may take care of the funding of
care for the uninsured. Now it is likely more money will flow into the
system that the WHO ranks 37th in effectiveness, 21st
in life expectancy, and 44th in infant mortality.
I
applaud the good intention, but why do we not address the most important
problem of the U.S. health sector?
Let me
explain: The main reason for driving up cost in the U.S. Healthcare
System is that we reward financially those who treat disease in the most
expensive way possible, and we do not reward the preventive medicine
that might have stopped disease from occurring in the first place.
Our
health care sector is a disease care sector.
What financial incentive would such a sector have to prevent disease?
Or to treat it less expensively?
A
consequence of our reimbursement system is that the less effective a
hospital or clinic is in treating patients, the more money it makes.
When Virginia Mason Hospital in Seattle shifted its focus from treating
back pain with expensive MRIs and surgeries to physical therapy, its
income flow dropped, while the patients got better. The hospital
requested higher payments for its physical therapy treatment so that it
would not have to fire people. Virginia Mason needed more money, it
explained, in order to do the right thing. |
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If
the health sector since 1995 had been just as productive as
the average American worker, in 2006, we would have had 36%
more healthcare provided with the same resources, and it
would have cost us 10.3% less than it did in 1996! And
health care workers would still have enjoyed the same pay
raises (4.81% per year in real dollars) they actually did
receive from 1996 to 2006. That is the power of
productivity, and no one is going to tell me that the highly
educated and highly paid health care worker cannot match the
average American worker in annual productivity
improvement.
But the average American worker has every incentive in the
world to be more productive. Improving productivity is the
only sustainable way to raise wages, and the only way to
keep high-paying American jobs.
Workers in the health sector are paid far more than are the
average American workers, and their productivity has been
negative, - 2.3% per year, since 1996. Why?
Because the less productive a hospital is the more money it
makes under a reimbursement system that rewards inputs,
rather than outcomes, process rather than results.
Reforming the American health sector isn’t only about
making sure that everyone is insured.
It is about making sure that everyone in the
health sector does the right thing, in the right way, all
the time.
Is that so hard? If we could get the incentives right?
This year?
The VA did it and is now rated the best health care
delivery system in the nation.
If the VA could, so could the Mayo Clinic, and the
Cleveland Clinic, and the Hospital Corporation of America.
Then
we could afford to pay the health care premium of higher pay
for every health care worker. The overall cost would still
go down, people would become healthier, and this country
would become more competitive in the global arena.
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Leading, innovative companies understand the
power of productivity as the strategy for achieving greater
corporate performance and bottom line results. Yet, most
companies do not apply a systematic and rigorous process for
realizing their untapped productivity potential. 80% of all
corporate initiatives focus instead on efficiency
improvements that are not tied to overall growth objectives
and do not produce any breakthroughs in performance.
Productivity improvement, on the other hand, is so highly
leveraged that even small increases can dramatically affect
revenue, cost effectiveness and profits, while raising
employee satisfaction and customer delight. For publicly
held companies, stock prices and market capitalization can
increase dramatically.
Tor Dahl & Associates is the world leader in this "new"
field of productivity. We have debunked the old myth that
productivity takes away jobs and that it is only concerned
about "doing more with less". Our successful productivity
strategy is rooted in the fundamental belief that
productivity is about removing barriers to individual
performance, freeing up resources from unproductive
processes and reallocating those resources to higher yield
activities that support organizational growth objectives. It
is a positive method that leads to greater earned
competitive advantage, increased job satisfaction and
positive employee engagement, rather than job losses and
downsizing.
Tor Dahl & Associates offers a compressed tutorial for
corporate teams during which the fundamental principles of
productivity will be taught and practiced. It is an
enjoyable, stimulating, practical and valuable session that
identifies key factors that impact productivity and how your
organization can apply this insight to make dramatic
improvements in personal and organizational performance.
Contact us now to arrange for a customized tutorial for your
leadership team. |
