President Obama has repeatedly promised that providing every American affordable access to quality health care won't cost more money than we'll save through reform, but he's recently raised the stakes even further. Health care reform, he has said, would "foster economic growth" and "unleash America's economic potential."
Is that realistic?
I understand why critics are skeptical. After all, if you'd asked U.S. automakers several years ago what the chances were that someone could produce a snazzy family sedan averaging 50 miles per gallon, they would have been dismissive, too. Yet while the establishment scoffed, Toyota rolled out the Prius.
The poster child for the Prius equivalent in health care-high quality, reasonable cost, satisfactory personal experience--is the Mayo Clinic. But we can't rely on franchising Mayo to remake American medicine. If you spend time with those working in the trenches of genuine health care transformation, you'll see hopeful signs you might miss just looking out the window in Washington.
Researchers believe there is 30 percent "quality waste" in U.S. health care; that is, unnecessary costs due to care that is inappropriate, inefficient or unsafe. As it happens, the first hospital executive I ever heard use that figure to describe savings he'd personally seen at his own institution works on a much more modest scale than Mayo.
Lowell Kruse is about to retire after 25 years as CEO of St. Joseph, Missouri-based Heartland Health. Seven years after I listened to him describe what his team had done to improve care and cut costs, he's still sticking by his earlier estimate of the waste that's there for taking. "It's not easy to get at, not easy at all," he cautioned in a phone call. "There's a whole bevy of things lined up against it, but it's there."
Kruse might have added that you don't have to run a large, rich, academic health system in order to be successful at trimming costs while improving quality. You just have to build the kind of culture that believes preventing heart disease is just as important as providing superior care to those who end up needing cardiac surgery. You have to build a culture that relentlessly attacks broken business processes; for example, standardizing a confusing welter of surgical supplies. And, of course, your physicians and employees have to regard these activities and countless others as a benefit to patients rather than a threat to profits.
Heartland may not be a household name, but its medical center ranks as one of the top 20 in the country (out of about 5,000 hospitals) on a series of Medicare quality and safety measures. Heartland has also accumulated a slew of awards, and it recently hosted a group of British visitors wanting to import some of its Show-Me State wisdom.
Nor is Heartland an isolated example. In Appleton, Wisconsin, Dr. John Toussaint insists that "quality waste" adds up to a stunning 40 to 50 percent of costs. Until recently Toussaint ran ThedaCare, whose systematic efforts to improve care and lower costs were profiled in a case study by Harvard Business School superstar expert Michael Porter.
Porter and heavy hitters like former Treasury Secretary Paul O'Neill serve on the board of Toussaint's new ThedaCare Center for Healthcare Value, which is organizing a national coalition of other providers with a similar approach. Think of it as a cooperative to take the basic "Prius Medicine" platform and refine the details.
More broadly, these types of initiatives are critical to demonstrating that the rhetoric of health system transformation makes sense in reality. For example, experience shows that widespread use of information technology, a focus of the Obama effort, has the greatest impact when applied by clinicians and managers in support of specific cost and quality improvements.
Accountability and transparency, two other pillars of reform, produce the best results when incorporated into routine clinical and business decisions. And it's not coincidental that everyone from physicians to the cleaning crew at places like Heartland and ThedaCare make constant references to "lean production" and other kaizen (continuous improvement) terms adapted from none other than Toyota.
As everyone agrees, the stakes involved in health care reform are critical to U.S. economic health. If we can slash the $2.4 trillion spent on health care by anywhere close to 30 percent, the $720 billion saved each year would have a profound effect on our ability to rebuild roads, invest in schools and restore our global competitiveness. Together, these are critical components of realizing America's economic potential.
Although the Congressional Budget Office is not allowed to "score" these potential savings when evaluating legislation, achieving even a fraction of what is possible would pay for the $1 trillion to $2 trillion estimated 10-year cost of universal coverage.
Leaders like Kruse, Toussaint and others have shown they can give their communities care that's safer, more affordable and more reliable. The question is whether Congress will address the misaligned incentives and other obstacles standing in the way of making a Prius-equivalent the new standard of American medicine.