The sources of why Americans pay more for healthcare and get less: Poor Organization
 
Poor organization is something many would consider to be too polite, as there is almost no organization America’s health care system and that’s the way American’s like it. They prefer a market based system where each individual can choose the doctor they see. But this is increasingly becoming more a dream than a reality because you can really only see the doctors that are on your insurance company’s preferred provider list. You can see anyone, but you must be willing to pay even more.
 
At the bottom layer, where patients see doctors, better organization really translates to better quality control. Poor scheduling alone costs a doctor at least tens of thousands of dollars each year as shown earlier in this series.
 
More importantly, 44,000 to 98,000 patients die each year in American hospitals each year due to simple, preventable mistakes such as confusing one patient with someone else and giving the wrong treatment (which almost killed Gordon Moore’s wife, who received an insulin shot intended for the patient in the bed next to her). Moreover, this figure does not include the numbers who die because pharmacists can’t read a doctor’s hand writing and errs in the process. In contrast, the Institute of Medicine puts the annual death toll from automobile accidents at 43,000, breast cancer at 42,000, and AIDS at 15,000. Thus, you have a higher probability of being killed by a simple error in a hospital, than one of these.
 
According to a study by the National Academy for State Health Policy, these errors cost $17-29 billion, running at an average rate of $4700 per admission. It also works out that between 1 and 2 people out of each 100 admitted to a hospital will die because of such an error.
 
This is one reason why malpractice awards are so problematic to the system, as real errors account for 60% of them. Truly frivolous cases where no medical injury could be found amounted to a mere 3% of the total in a study of 1400 closed malpractice cases at five insurers across the country. Though it should be noted that in an additional 37% of the claims no error could be attributed to a medical professional. Most of these did not result in any compensation, but the insurer still had to pay to cover the claim.
 
Taking these issues to court does nothing to improve quality, other than driving defensive medicine, where doctors order extra, yet hardly necessary, tests mainly to protect themselves against a lawsuit. This does load even more costs on a system that is bloated with fat.
 
The actual systems and quality processes with which hospitals are run have hardly changed over the decades. We live in a world where computers track and can quickly recall the exact path of most products so quality issues can quickly be identified. Look at how fast tainted pet food was attributed to exact locations in China, halfway around the world. Yet most hospitals mainly use computers for billing purposes. Patient records and identification are still largely on paper. This backwardness occurs because of the unique decision structure in hospitals. Most healthcare decisions are pushed down to doctors, who are the production line workers in the hospital factory. They simply cannot deal with quality issues at this level, which take a global management perspective. Moreover, computer controls are often fought by doctors because poor implementations have slowed down the most expensive part of the system: the doctors and nurses. But America is trading lives for cost because the system is too busy and too disorganized to address quality.
 
As a result, and possibly because of litigation worries, the data needed to improve quality is only tracked irregularly and on an ad hoc basis. Worse, having such low quality levels aggravates the frivolous lawsuit problem because lawyers know the high error rate gives them a high probability of winning. Fortunately the legal system is similarly inefficient as malpractice claims result from only 1 of eight hospital medical errors or 1 of 800 to 1600 patients admitted.
 
Further proof that the quality control system in health care is broken are findings that only 5 percent of America’s doctors are responsible for 54 percent of the malpractice suits and yet fewer than 8 percent of these were ever disciplined by State medical boards (or 1 in 250).
 
Ironically, the quality revolution that swept through American business in the eighties and nineties passed by the medical profession. The good news about this is that solutions to these problems are well known and easy to implement. Except for one thing: the level of disorganization and deer in the headlights of legal systems makes decision cycle times for the health care industry and thus learning cycle times almost infinite.
 
At higher levels, better organization translates into more efficient systems. This is simply taking cost out of the system. For example, eliminating redundancy’s such as insurance doctors second guessing patients doctors.
 
Insurance companies load on layers of inefficiency to control costs. That’s right, the more inefficient they are, the more profitable they are. This happens because in applying to get approval for expensive treatments enough patients give up and forgo treatment to offset the cost of the initial inefficiency.
 
On boon to this profitable inefficiency has been the HIPPA privacy law, which insurance companies hide behind. They block your doctor or pharmacy and you from talking to them.
 
This profitable inefficiency occurs to such a degree that some lawyers specialize in getting treatments owed patients from insurance companies. So the inefficiency escalates.
 
So what does it cost? One study from 1999 found that the cost of administration in the United States amounted 31.0% of total health care expenditures versus 16.7% in Canada. The cost per capita was $1,059 in the United States – more than three times the $307 of Canada’s. But cost isn’t the only issue here. Lives are. No company could introduce a product that killed up to 100 thousand people a year. Yet that is exactly what happens in health care.
 
 
The sources of why Americans pay more for healthcare and get less: Poor Organization
 
There is practically no organization America’s health care system and that’s the way American’s like it. They prefer a market based system where each individual can choose the doctor they see. But this is increasingly becoming more a dream than a reality . . .  
 
At the bottom layer, where patients see doctors, better organization really translates to better quality control. Poor scheduling alone costs . . .
 
More importantly, 44,000 to 98,000 patients die each year in American hospitals each year due to simple, preventable mistakes such as confusing one patient with someone else and giving the wrong treatment (which almost killed Gordon Moore’s wife, who received an insulin shot intended for the patient in the bed next to her). Moreover, this figure does not include . . .
 
 
Hot Links to The News
 
Discovery to save millions of lives AUSTRALIA'S top heart specialists believe they have found a treatment to stop heart disease in its tracks, potentially saving millions of lives worldwide. ...Self
 
 
 
 
 
Next

Why America's Medical System is Failing It: Part VI

  2064      Nov 30, -0001
The sources of why Americans pay more for healthcare and get less: Poor Organization
 
Poor organization is something many would consider to be too polite, as there is almost no organization America’s health care system and that’s the way American’s like it. They prefer a market based system where each individual can choose the doctor they see. But this is increasingly becoming more a dream than a reality because you can really only see the doctors that are on your insurance company’s preferred provider list. You can see anyone, but you must be willing to pay even more.
 
At the bottom layer, where patients see doctors, better organization really translates to better quality control. Poor scheduling alone costs a doctor at least tens of thousands of dollars each year as shown earlier in this series.
 
More importantly, 44,000 to 98,000 patients die each year in American hospitals each year due to simple, preventable mistakes such as confusing one patient with someone else and giving the wrong treatment (which almost killed Gordon Moore’s wife, who received an insulin shot intended for the patient in the bed next to her). Moreover, this figure does not include the numbers who die because pharmacists can’t read a doctor’s hand writing and errs in the process. In contrast, the Institute of Medicine puts the annual death toll from automobile accidents at 43,000, breast cancer at 42,000, and AIDS at 15,000. Thus, you have a higher probability of being killed by a simple error in a hospital, than one of these.
 
According to a study by the National Academy for State Health Policy, these errors cost $17-29 billion, running at an average rate of $4700 per admission. It also works out that between 1 and 2 people out of each 100 admitted to a hospital will die because of such an error.
 
This is one reason why malpractice awards are so problematic to the system, as real errors account for 60% of them. Truly frivolous cases where no medical injury could be found amounted to a mere 3% of the total in a study of 1400 closed malpractice cases at five insurers across the country. Though it should be noted that in an additional 37% of the claims no error could be attributed to a medical professional. Most of these did not result in any compensation, but the insurer still had to pay to cover the claim.
 
Taking these issues to court does nothing to improve quality, other than driving defensive medicine, where doctors order extra, yet hardly necessary, tests mainly to protect themselves against a lawsuit. This does load even more costs on a system that is bloated with fat.
 
The actual systems and quality processes with which hospitals are run have hardly changed over the decades. We live in a world where computers track and can quickly recall the exact path of most products so quality issues can quickly be identified. Look at how fast tainted pet food was attributed to exact locations in China, halfway around the world. Yet most hospitals mainly use computers for billing purposes. Patient records and identification are still largely on paper. This backwardness occurs because of the unique decision structure in hospitals. Most healthcare decisions are pushed down to doctors, who are the production line workers in the hospital factory. They simply cannot deal with quality issues at this level, which take a global management perspective. Moreover, computer controls are often fought by doctors because poor implementations have slowed down the most expensive part of the system: the doctors and nurses. But America is trading lives for cost because the system is too busy and too disorganized to address quality.
 
As a result, and possibly because of litigation worries, the data needed to improve quality is only tracked irregularly and on an ad hoc basis. Worse, having such low quality levels aggravates the frivolous lawsuit problem because lawyers know the high error rate gives them a high probability of winning. Fortunately the legal system is similarly inefficient as malpractice claims result from only 1 of eight hospital medical errors or 1 of 800 to 1600 patients admitted.
 
Further proof that the quality control system in health care is broken are findings that only 5 percent of America’s doctors are responsible for 54 percent of the malpractice suits and yet fewer than 8 percent of these were ever disciplined by State medical boards (or 1 in 250).
 
Ironically, the quality revolution that swept through American business in the eighties and nineties passed by the medical profession. The good news about this is that solutions to these problems are well known and easy to implement. Except for one thing: the level of disorganization and deer in the headlights of legal systems makes decision cycle times for the health care industry and thus learning cycle times almost infinite.
 
At higher levels, better organization translates into more efficient systems. This is simply taking cost out of the system. For example, eliminating redundancy’s such as insurance doctors second guessing patients doctors.
 
Insurance companies load on layers of inefficiency to control costs. That’s right, the more inefficient they are, the more profitable they are. This happens because in applying to get approval for expensive treatments enough patients give up and forgo treatment to offset the cost of the initial inefficiency.
 
On boon to this profitable inefficiency has been the HIPPA privacy law, which insurance companies hide behind. They block your doctor or pharmacy and you from talking to them.
 
This profitable inefficiency occurs to such a degree that some lawyers specialize in getting treatments owed patients from insurance companies. So the inefficiency escalates.
 
So what does it cost? One study from 1999 found that the cost of administration in the United States amounted 31.0% of total health care expenditures versus 16.7% in Canada. The cost per capita was $1,059 in the United States – more than three times the $307 of Canada’s. But cost isn’t the only issue here. Lives are. No company could introduce a product that killed up to 100 thousand people a year. Yet that is exactly what happens in health care.
 
 
The sources of why Americans pay more for healthcare and get less: Poor Organization
 
There is practically no organization America’s health care system and that’s the way American’s like it. They prefer a market based system where each individual can choose the doctor they see. But this is increasingly becoming more a dream than a reality . . .  
 
At the bottom layer, where patients see doctors, better organization really translates to better quality control. Poor scheduling alone costs . . .
 
More importantly, 44,000 to 98,000 patients die each year in American hospitals each year due to simple, preventable mistakes such as confusing one patient with someone else and giving the wrong treatment (which almost killed Gordon Moore’s wife, who received an insulin shot intended for the patient in the bed next to her). Moreover, this figure does not include . . .
 
 
Hot Links to The News
 
Discovery to save millions of lives AUSTRALIA'S top heart specialists believe they have found a treatment to stop heart disease in its tracks, potentially saving millions of lives worldwide. ...Self
 
 
 
 
 
About weVISION: weQuest's are written by G Dan Hutcheson, his career spans more than thirty years, in which he became a well-known as a visionary for helping companies make businesses out of technology. This includes hundreds of successful programs involving product development, positioning, and launch in Semiconductor, Technology, Medicine, Energy, Business, High Tech, Enviorntment, Electronics, healthcare and Business devisions.

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