| By Haydn Bush | December 20, 2011 |
| Want to save 20-30 percent of the U.S. health care bill, without slashing quality? Don Berwick has a few ideas. | |
During recently departed Centers for Medicare & Medicaid Services Administrator Don Berwick's return to the Institute for Healthcare Improvement's National Forum in Orlando earlier this month, I saw him speak twice ? once during a keynote address for all Forum attendees, and during a small press briefing.
During both appearances, Berwick hammered home the pressure the health care industry faces to curb health care spending ? and how those ends can be accomplished in tandem with improvements to quality. To be sure, Berwick isn't the first health care expert to link reduced costs with quality improvements, but he believes the system, using principles of the Lean and quality improvement movements, could stand to trim a staggering $1 trillion ? or what he estimates as roughly a third of overall U.S. health costs.
"The way out of the health care dilemma in this country ? costs are out of control, quality should be better ? is to improve," Berwick said. "? Great leverage in cost reduction comes?exactly from focusing on meeting the needs of the person you serve."
Berwick believes that health care providers hold the power to help trim U.S. health care spending to a smaller share of Gross Domestic Product, and has identified six "wedges" of potential improvement: Coordination Failures, Process Failures, Overtreatment, Administrative Burdens, Price Variation and Fraud and Abuse.
Failures of Coordination
By this, Berwick refers to activity or investment "that doesn't help the person you were intending to help." He cited patient handoffs that aren't communicated well, letting vital patient information slip through providers' fingers, which can lead to both poor care and higher downstream costs.
"This is the waste that comes with people, especially with chronic illness, fall through the slats," Berwick says. "They get lost, forgotten, confused. The result: complications, decays in functional status, hospital readmissions and dependency."
Process Failures
While best practices for reducing or even eliminating many health care-acquired infections ? or standardizing once-risky processes ? are well publicized, Berwick says there's still plenty of work to be done to improve their execution. For instance, Berwick refers to the vast number of health care-acquired infections where proven best practices are either not used or implemented incorrectly.
"Whatever health care fails to do scientifically, the cost goes up and the quality goes down," Berwick said.
Overtreatment
Citing everything from aggressive end-of-life care to patients who receive antibiotics for viral colds, Berwick argued that the health care delivery system devotes far too much time to "subjecting people to care that cannot possibly help them ? care rooted in outmoded habits, supply-driven behaviors and ignoring science." In particular, Berwick cited patients who receive a series of inconclusive tests without a resolution.
"This is the Odysseus complex," Berwick said. "You take a bunch of tests, and one is abnormal. Then you take another set, and one is abnormal. You keep going until you head home, like Odysseus."
Administrative Burdens
"This is the waste that comes when we create our own rules that force people to do things that make no sense, "Berwick said.
As an example, Berwick referred to efforts undertaken during his tenure at CMS to simplify regulatory requirements "that don't add value." For instance, Berwick noted, a health care system planning to put into place a pressure ulcer reduction initiative would need to get the boards of every one of their hospitals to approve the effort. Instead, Berwick said, "If you're a system, you can have a system board."
Berwick estimated the CMS administrative simplification program could save Medicare in the neighborhood of $1 billion.
Price Variation
The gap between the cost of a given health care procedure in the United States and elsewhere in the world is "stunning," Berwick said. While health care analysts often scrutinize care delivery models to look for inefficiencies, Berwick says there is tremendous room for improvement at the beginning of the process, when providers of all stripes purchase equipment and devices.
"Why is there not a commoditization of the production of things that are relatively standardized to do?" Berwick asked.
For instance, when CMS implemented a competitive bidding process for durable medical equipment, Berwick said, costs fell by 32 percent. If the program had been implemented nationally, it would have saved Medicare $28 billion.
Fraud and Abuse
The final category, fraud and abuse, is a well-known and reported area of concern for Medicare and other payers. While CMS has typically used law enforcement strategies to target and investigate fraudulent billing, Berwick says the agency is beginning to take a more proactive approach, predictive analytics that help the system prescreening suppliers and other vendors. Every dollar that's spent on fraud detection and prevention, Berwick said, has roughly a sixfold return on investment.
You are on the cusp of history'
At the end of his keynote, Berwick challenged attendees to take up the charge to reduce costs, arguing that real movement on cost containment must come from health care providers. Despite the political challenges that surrounded his 16 months in Washington, Berwick argued that the health care system can meaningfully tackle the challenges ahead if it systemically addresses the concerns he cited.
"You are on the cusp of history?not Washington," Berwick said. ?Our quest may not be quite as magnificent as the quest for human rights or a sustainable earth, but it's immensely worthy."
Haydn Bush is senior online editor for Hospitals and Health Networks. You can reach him at hbush@healthforum.com.
The opinions expressed by authors do not necessarily reflect the policy of Health Forum Inc. or the American Hospital Association.
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