Alice: Oh, no, no. I was just wondering if you could
help me find my way.
Cheshire Cat: Well that depends on where you want to get to.
Alice: Oh, it really doesn't matter, as long as...
Cheshire Cat: Then it really doesn't matter which way you go. [1]
Alice: Oh, it really doesn't matter, as long as...
Cheshire Cat: Then it really doesn't matter which way you go. [1]
Some time ago, February 2008 to be exact, I
published an MIT working paper entitled GDP-Based Productivity in Ambulatory
Healthcare: A Comparison with Other Industry Segments, 1998-2005[2],
wonderful title, I know… I looked at a set of productivity measures over the
years 1998-2005 for ambulatory healthcare, auto manufacturing & the
information industries, & what I found surprised me. Productivity measures
such as value added per hours worked or gross-output per gross-input were
generally better for ambulatory healthcare than for auto, & only slightly
less productive than for information industries. Value added per total
compensation was actually better in ambulatory healthcare than in the other
benchmark industries, but that was mainly because compensation was
comparatively low in healthcare. These measures are based on labor productivity
that is the contribution of the direct work that people do to produce an output
or product.
OK you say… that’s semi-interesting, but what does
it have to do with re-engineering, healthcare reform or Alice’s feline
adversary? Bear with me for a minute & I’ll try to explain. It does make
sense (at least to me…). Over the past 25 years or so, economists have
developed measures of productivity that are not based on direct labor. The main
one of these is called total factor or multifactor productivity (MFP)[3]
& it measures the effect of non-labor, usually capital-based, inputs on
outputs. I’m already way to deep in the weeds here, but suffice to say that
multifactor productivity is taken as a measure of how well industries use
capital, & is thought to reflect the efficiency of “ changes in characteristics
and efforts of the work-force, changes in managerial skills, changes in the
organization of production, changes in the allocation of resources between
sectors, the direct and indirect effects of R&D, and new technologies”.
More specifically, effective inputs are: improvements in workflow, more
effective R&D investment, adoption & usage of new technology. The
Bureau of Labor Statistics recently published multifactor productivity
statistics for industries up until 2011[4],
the last full year that stats are available. An analysis of these stats for the
11 years 2001-2011 has the following summary:
Auto
|
Information
|
Amb. Healthcare
|
|
Multifactor Productivity[5]
|
98.4
|
102.8
|
99.9
|
Standard Deviation
|
3.83
|
3.95
|
1.26
|
The key facts here are
that MFP in information industries is a good deal higher than in Auto or
Ambulatory healthcare, that MFP is higher in Ambulatory Healthcare than in Auto
& that there is almost no variation in the MFP measure in Ambulatory
Healthcare over the 11 years.
Auto had a significant (0.99) decrease in MFP
starting with the beginning of the recession in 2008 & had still not
recovered as of 2011, while Information Industries had a significant (0.99)
increase during the same time. MFP in Ambulatory Healthcare stayed relatively
constant for the period. The explanation that is generally accepted for this
pattern is that manufacturing process in Auto went through a period of intense examination
& redesign in the 1990s & as did the Information Industries a bit later
(1995-2005). This effort resulted in improvements in MFP, particularly from
workflow redesign, adoption & use of new technologies & efficiency of
R&D investment. The loss of productivity in Auto was associated with major
losses in sales, bankruptcies, loss of employees etc. in the 2007-2010 period.
Which brings us to re-engineering in healthcare.
In 1990, Michael Hammer, then at MIT, published an article in the Harvard
Business Review titled: Reengineering
Work: Don’t Automate, Obliterate[6].
His main points were that most work being done did not add value for customers
& that automating this work only perpetuated the inefficiencies in more
effective forms. He suggested that what should be done is abandon ineffective
work & redesign work process to be in line with corporate goals &
customer needs. This effort was called reengineering, & many authors took up
the debate about through out the 1990s, just as many corporations undertook to
reengineer their way of working.
The increases in MFP in the Auto & Information
Industries, & even the subsequent decrease in Auto are evidence of their
reengineering efforts, especially in workflow redesign & use of new information)
technologies. As I said in my ESD Working Paper (op. cit.), “The
ambulatory health segment has not made many of these changes up until this
time. …investment in new technologies, whether in hardware (medical devices and
computers) or software applications has not been a priority. Neither has
structural or management reorganization. This segment is only just now faced
with needing to make some of these changes as it focuses on the adoption of
electronic healthcare records (EHR), which requires investments in hardware and
work reorganization. Ambulatory healthcare has made progress in labor
productivity without making these changes, but not in capital efficiency. In
order to consolidate and extend the labor productivity gains made from 1998 to
2005, and to begin to make gains in capital efficiency, this segment will have
to address the key factors that affect these productivity changes. These include
increased research and development spending, increased technology adoption and
addressing economies of scale as well as making serious efforts at productive
structural and work reorganization, and improving managerial skill. Advances in
these areas will allow ambulatory healthcare to lower costs and improve both
labor productivity and capital efficiency.”
Translated from academize, this means
that Ambulatory Healthcare has yet to seriously address those areas that will
allow it to make progress, namely: clinical & operational workflow
redesign, adoption of new information technologies (other than EHR) & more
effective use of R&D investments. The Federal Meaningful Use program has
ensured that healthcare organizations adopt EHR technology, & this has
required a good deal of workflow change, but as we have seen in several of my
previous posts, adopting EHR technologies & qualifying for meaningful use
reimbursement does mean that an organization is using technology in a
(clinically or operationally) meaningful way, or that the workflow changes made
are effective in terms of any goals other than to be able to use a specific
vendor’s EHR. This is the point of the Alice quote at the beginning of this
piece. The Cheshire Cat is quite correct – you can’t get where you want to go
unless you know where that is. If all you want to do is to qualify for
Meaningful Use, than what has already been done is adequate, but if what you
want to do is really address the Triple Aim, you have to do much more. How
would you align workflows, especially clinical workflows, as well as the
adoption of newer health information technology along with the more effective
use of R&D investment if you really wanted to focus on the Triple Aim. Here
are some suggestions:
- The ideas behind meaningful use, Patient-Centered Medical Home, Accountable Care Organizations etc. are correct in the sense of a high-level direction, even of the specific details of the programs are less than effective in actual improvement of clinical outcomes & achievement of cost reductions. The first thing to do (IMHO) is to evaluate what changes would actually be effective in addressing the Triple Aim, & then to move toward making those changes. Some of these changes appear to be:
- Reengineering both administrative & clinical workflows to emphasize continuity of care, care transitions, medication reconciliation & team-based care planning & treatment where the patient (&/or caregiver) is part of the team.
- One of the first “technical” changes would be the provision of a complete, integrated patient record. This would include primary care, behavioral health, dental, patient supplied data & potentially data from external sources (such as public social media)[7]. Such a record is essential for realistic care planning & treatment. Current EHRs do not provide this type of integrated record & are currently under no regulatory or commercial pressure to do so. Many organizations are attempting to do this level of integration either themselves or through a cooperative vendor. This situation has to change so that integrated patient records a the general case, not the exception
- Of course, this kind of change is not entirely technological. One of the main reasons that such records is cultural, both on the healthcare & the vendor side. Vendors have to be rewarded commercially for providing the capability to produce such a record & providers have to be reimbursed for using one in an integrated & patient-centered manner.
- Workflows have to be restructured so that teams are enabled & so that patient input is expected (& welcomed). Auto, Information Industries & other industries (such as Aerospace as well as continuous process industries such as chemical manufacturing) went through years of process redesign, mostly by trail & error (enabled or not by process consultants). Ambulatory healthcare has only just started this process with respect to meaningful use of EHRs. That effort has to be extended to include the provider, care team & patient addressing all aspects of the triple aim.
- This reengineering will necessarily mean that EHRs & other HIT will need to be redesigned (fundamentally, not just their UIs) in order to enable the new integrated focus.
That’s at least a start…
Next up:
- Part of the problem with reengineering in healthcare is that reengineering works well in segments that are actual markets (because of competitive & cost pressures), but less well in segments that are not. I (& many other people better qualified to know than me) believe that healthcare is not a market so these competitive & costs pressures are not effective at structuring how the segment functions. Why isn’t healthcare market? Stay tuned for that…
- I spent almost three years working as the corporate technical leader for the Digital Equipment Corporation to General Motors. This was during a time (1986 & following) that GM was undertaking a huge reengineering effort in engineering & manufacturing called C4. I participated deeply in this effort & think there are some lessons learned for healthcare, very tough lessons. I’ll try to explain the relationship & what it might mean for healthcare reengineering.
[1] Alice
in Wonderland. 1865. Charles L. Dodgson (Lewis Carroll). Woodblock
Illustrations by John Tenniel for the first (1865) edition. Read in the 1993
edition: The Annotated Alice: Alice’s Adventures in Wonderland & Through
the Looking Glass. 1993. Martin Gardner (ed.). Random House.
[2]
Hartzband, D.J. 2008.
GDP-Based Productivity in Ambulatory Healthcare: A Comparison with Other
Industry Segment, 1998-2005. ESD-WP-2008-11. Engineering Systems Division.
Massachusetts Institute of Technology
[3] http://www.bls.gov/mfp/. The Bureau of Labor
Statistics MFP site
[5] 2005
taken as index year (100.00)
[6] Hammer, M., (1990). "Reengineering Work:
Don't Automate, Obliterate", Harvard Business Review, July/August,
pp. 104–112.
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