Unintended consequences - health care deliver reform

Business & Health, Annual, 1997 by Reuben McDaniel

It's been said that no good deed goes unpunished, and the thought certainly applies to our ongoing attempts to build a new health care delivery system in the United States. Every action we take has consequences, some of which we don't think about very much. Here are a few that deserve our attention.

On trust

There is an undeniable breakdown in trust in the system as the consumer is left out of the loop in negotiations about which providers -- particularly specialists -- and which services will be available. Trust is the major predictor of treatment compliance and the main preventer of lawsuits. If I wanted to know whether you were likely to do what your doctor told you to do, I'd ask you if you trust your doctor. And if you do trust your doctor, you probably won't sue him or her. Thus, erosion of trust leads to more illness (through decreased compliance) and more malpractice suits.

As health care becomes a for-profit business, the controls provided by professional ethics are eroded and must be replaced by laws and regulation. We can establish a whole new industry of watchdogs -- lawyers keeping hospitals under control.

As the health care system gets less personal, people feel they have less control and may be inclined to rely too heavily on the easily accessible information on the Internet. There's a proliferation of web sites for diabetes, hypertension and every other health condition. But is it valid information? The Internet is an unmonitored, uncohesive source. Keep in mind that the best market for a charlatan is one in which people feel out of control.

Physicians themselves are not blameless -- not every test, visit and procedure that's been billed was really needed -- but people trusted doctors to be acting in their best interest. Whether that's true or not, that's what people believed. Now I don't think people believe that of corporations, so now they're willing to regulate.

When you restructure the system into something people don't know, folks don't trust it -- and a lot of what goes on in medicine is based on trust. I trust you to prescribe medication that will help me. You might even be a better prescriber with a formulary. Your behavior may be clinically better, but I still don't trust you.

On how we do business

Everything is moving so fast, you're renegotiating every 12 months on a quarter of a cent per patient per month. In this administrative mind-set of rapid-fire responses and continuous re-creation of plans, two separate issues emerge: You can't think much about the long-term effects of your behavior, a classic weakness of business management. Nor can you develop long-term initiatives for complex, multiple-diagnosis health problems.

While we're so busy solving today's dollar crunch, who's paying attention to how we handle chronic conditions like diabetes, stroke and long-term heart problems? Who's figuring out how we bring about behavior changes like eating better and exercising more? Those are the real major issues.

Because there is no slack, because we're pressing so hard on finances, we don't think about new forms of delivery systems or new ways for clinical groups to get together and operate. I doubt very seriously, for instance, that you could establish freestanding surgical centers in today's market. With such pressure, nobody has the resources. Thinking outside the box is fun, but it's hard to do when you don't have any money.

That may explain another strange thing that's going on. Suppose I decide to build a big, integrated delivery system. What I'm trying to do is manage transaction costs across all the component units. But that looks a lot like the big conglomerates of 20 years ago, which we've given up. Other industries are establishing strategic alliances, networks and outsourcing. Health care is heading into the past, with strategies that others have abandoned. Is that a good way to do business?

On community and academic hospitals

What's happening to the thousands of dollars of community investment in tax breaks and charitable contributions to hospitals that are now being privatized?

Now hospitals are being purchased by for-profit systems and people are reading in newspapers that these places are swimming in money for trust funds and executive bonuses. Whether the tales are true or not, they reduce people's confidence in the value of charitable institutions. There's a social cost in terms of losing our faith in our ability or willingness to help each other through charitable contributions. We are better communities -- better people -- with this outlet. That's one reason why people have so much trouble giving up community hospitals, even if they're outdated and killing people.

The hospital has historically been the outstanding nonreligious charity in the community. People worked as volunteers, town leaders served on the board and everyone contributed to build the new wing and buy the heart and lung machines.

Of course, we could do better with fewer medical centers than we've got. Sloan Kettering is struggling, and it's one of the best in the world. And we've got three others in southern Texas that really don't belong out there. We're running all of them on a shoestring, but who's prepared to give one up? We don't have any system that allows us to make rational decisions about which to keep and which to winnow out.