Breaking silos best medicine for ineffecient healthcare system
FinancialPost.com – executive/productive conversations
17/09/13. Denise Deveau
To describe Canada’s healthcare sector as a “system” is in many respects a misnomer. Many observers contend the industry is run in silos. There are funding and systemic cultural issues, not to mention a lack of integrated technology. There are multiple governance models, and multiple jurisdictions that are managing their own budgets, and different ministries operating at their own pace.
In an ideal world, Canada’s entire healthcare system would receive a universally administered dose of lean thinking. So says Jane Bishop, clinical lead and senior lean healthcare consultant with Leading Edge Group. “I’d like to be right at that table rather than doing it one hospital at a time,” she says.
Doug Angus, a professor at the University of Ottawa’s Telfer School of Management concurs that the healthcare system isn’t a system at all. “Traditional economists would look at what we call a system and say what the hell is going on,” says. “We have a whole set of silos that barely connect. What we need is more efficient and effective ways to deliver services.”
We really don’t reward or incentivize continuity of care across providers
That silo mentality is systemic — from technology to treatment to the way healthcare professionals and providers are paid. In fact, the way healthcare providers are compensated may be one of the key generators of silos within the sector.
“The payment model is very siloed. As a result, so is care. We really don’t reward or incentivize continuity of care across providers,” says Trafford Crump, post-doctoral fellow at the University of British Columbia’s Centre for Health Services and Policy Research.
For example, when someone comes in for surgery the surgeon and hospital are paid from one source that is separate from the one that pays for home care when the patient is discharged. The GP looking after the patient post-surgery is also paid separately, creating a very territorial system.
The main reason for this is that the system we have today was designed to meet the needs of people decades ago. In the early days of the Canada Health Act, much of what was covered was hospital-based care. But Canada has moved away from hospital-based care to other settings such as surgical centres and specialized clinics that can do a lot of what used to be done in hospitals.
There was time in the 1980s when Canada’s healthcare system fared well against international measures. That however was when society needed to respond to acute conditions, says Stephen Samis, vice president of programs for the Canadian Foundation for Healthcare Improvement (CFHI) in Ottawa. “We’ve not built a well-integrated system that matches the health status and complex conditions of Canadians today. We now have a very challenging model in terms of management and maximizing productivity.”
Substantial resources are being wasted in some quarters. In some cases, 20% of hospital patients kept in acute care don’t need to be there and should be moved to a more appropriate, lower cost setting.
“When you apply the standard productivity equation (i.e. the amount of resources going in versus output) keeping patients in higher cost facilities is horrible for productivity,” says Andrew Sharpe, executive director at the Centre for the Study of Living Standards in Ottawa.
This is nothing out of the ordinary. Mr. Angus cites studies dating back to the early 1990s that looked at the cost-effectiveness of shifting people out of acute care to less intensive settings. Estimates were it could deliver net system savings of at least $7-billion a year.
“If the private sector was spending that kind of money on unproductive processes, they would be out of business,” he says. “We need to bring an element of competition into the picture because that is what generates entrepreneurial and innovative ways of doing things.”
Many observers believe a more sustainable and efficient system requires a move away from the “curative” model used today to a preventative model. That would involve a much broader group of stakeholders, including education, unemployment and social services. Doing that would help to address some of the socioeconomic issues at the root cause of healthcare problems today.
Another critical shift is focusing on the revenue side of the balance sheet rather than just costs. Yet information systems are not in place to execute those kinds of models.
“If you ask a hospital how much it costs for an appendectomy, they may not be able to tell you,” says Mr. Crump. “How then are you supposed to improve on delivery if you don’t know what it’s costing you? I don’t know of any other organization anywhere in the world that can do that and stay in business.”
Mr. Samis points out that while the U.S. as a whole performs more poorly than Canada on a per-capita-spending basis, high-performing institutions that integrate clinical and administration leaders — such as Kaiser Permanente in California, Group Health Cooperative in Seattle, and Intermountain Healthcare in Utah — have done a remarkable job of achieving economies of scale, reducing cost and improving performance.
If you ask a hospital how much it costs for an appendectomy, they may not be able to tell you
It’s a model that may serve Canada well; the key challenge for getting there, however, is increasing that relationship between cost, productivity and quality of service and finding more innovative ways to bridge the gaps.
The fact that Canada’s system encompasses 13 provincial and territorial jurisdictions, as well as federal direct health services, also brings challenges. It prevents us from achieving economies of scale, as well as has an impact on our cost structure. However, as Mr. Samis notes, having 13 systems does off the advantage of being able to try out and scale innovations.
“Thirteen jurisdictions can be incubators of innovation and that’s good. It’s the one thing we do get in Canada that we need to capitalize on. If Nova Scotia is doing something that is making an impact, perhaps it can be applied across the country. But it’s not good if that innovation is sitting in one place and not being capitalized on, because someone else is doing the same thing all over again.”
Above all else that means collaboration across jurisdictional and functional boundaries, including providers, administrators, clinicians and payers. It’s not just focusing on one or two fixes. Piecemeal solutions such as new funding models targeted at specific areas don’t seem to be delivering the efficiencies needed. Some trials have barely moved the needle, which implies the need for a total redesign from the basic to the top levels.
Ultimately, real reform will require a change in culture and attitudes first, Mr. Angus says. “That’s the most challenging part. We need to apply grey matter to come up with more innovative ways of doing things.”
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