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The Failure of Organizational Innovation in Health Care
Submitted by Ann Miller RN, MHA
[Executive-Director]
The following quote is from a white paper by David M. Cutler
NBER Working Paper No. 16030
Issued in May 2010
Medical care is characterized by enormous inefficiency. Costs are higher and outcomes worse than almost all analyses of the industry suggest should occur. In other industries characterized by inefficiency, efficient firms expand to take over the market, or new firms enter to eliminate inefficiencies. This has not happened in medical care, however.
Therefore, this paper explores the reasons for this failure of innovation. I identify two factors as being particularly important in organizational stagnation: public insurance programs that are oriented to volume of care and not value, and inadequate information about quality of care.
Assessment
Recent reforms have aspects that bear on these problems.
Link: http://papers.nber.org/papers/w16030
Conclusion
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Filed under: "Doctors Only", Career Development, Health Economics, Practice Management | Tagged: Consumer Healthcare Efficiency Indices, David Cutler, Health Care Entrepreneurs, Health Care Innovators, healthcare efficiency, heathcare costs, Innovation Health Care |
The Leading Business Education Network for Doctors, Financial Advisors and Health Industry Consultants 
For more on disruptive innovation and entrepreneurs in healthcare, feel free to visit this link:
http://theincidentaleconomist.com/disruptive-innovation-for-health-care/?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+TheIncidentalEconomist+%28The+Incidental+Economist+%28Posts%29%29
Samantha
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Innovation or Chicanery?
The inefficiencies of private medical care have been mostly wrung out the past decade; thanks to management consultants like http://www.MedicalBusinessAdvisors.com
Human doctors can only do so many more procedures, or see only so many more patients, in order to increase their income. Time and operational blockage always occurs in such a linear system; the wall is always hit.
The history of American health policy and innovation is full of new ideas to overcome this linear hurdle that never went anywhere. The “real” versus “perceived” idea of competitive advantage thru instrumentation or equipment, for example, states that if you can purchase “it”, the advantages is not sustainable because ultimately the price will come down and everyone will possess “it.” Such the marketing artifice! THINK: Scans like CT and PET scans.
And so, one latest new linear thing is the Accountable Health Organization (ACO) — which seems to be a new wave HMO model that includes provider-driven PHOs [a prior failed concept] and “bundled payments” [episodes of care].
Of course, many pundits will opine and much will be written about these innovations of linear salvation. But, depending on which party or institution pushes the ideas, the concept still seeks to profit from rationing care and/or adding interventions to the patient mix. Unfortunately, they won’t go very far.
At the moment, we have few cost-control instruments other than rationing care by price and the patient’s ability to insure; or pay.
And so, is this true innovation or chicanery; you decide? I have.
Dr. David Edward Marcinko; MBA
[Publisher-in-Chief]
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More on Medical Innovation
According to Robert James Cimasi MHA, AVA, CMP™ of Health Capital Consultants, LLC in St. Louis MO, if the emerging healthcare industry is to respond successfully to market pressure to reduce costs, and the new Affordable Care Act [ACA], then the market must first create incentives for innovation. The existing barriers to competition cannot include barriers to innovation as many do now. Physicians, nurses, healthcare purchasers, managers and legislators must ensure innovation takes the forefront of any reform, if it is to be effective.
Link: http://www.HealthcareFinancials.com
For example, Michael Porter and Elizabeth Omstead Teisberg stated in their book Redefining Health Care, that limiting competition is not the solution, but rather, “The only way to truly reform health care is to reform the nature of competition itself.” In the offer that this reform should be focused around “value based competition over the care cycle at the medical condition level“.
Porter further explained that, Because of the lack of effective competition at the condition level, the actual organization and structure of care delivery by most providers is not aligned with patient value. Lack of value-based competition on results has allowed care of a patient to be fractured across numerous specialties, hospital departments, and physician practices, each of which focuses on its discrete intervention. Nobody integrates care for the medical conditions as a whole and across the full care cycle, including early detection, treatment, rehabilitation, and long-term management.
This is in sharp contrast to proponents of a universal health coverage system. For example, as advocated by Arnold Relman, MD in his recent book, A Second Opinion: Rescuing America’s Health Care,
“The present control of medical practice by market economies does not serve the health care needs of patients very well and is not compatible with a strong, ethically based profession … I urge physicians not only to support the development of a single-payer insurance system, but to help devise the reforms in the delivery system that must accompany a single-payor insurance, if inflation in medical costs is to be controlled and quality of care improved. The key to this new delivery system should be the development of prepaid multi-specialty medical groups in which physicians are paid largely by salary.”
And so, what do you think ME-P colleagues and readers? Where are the entrepreneurs?
Dr. David Edward Marcinko MBA, CMP™
[Editor-in-Chief]
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Innovation at the VA?
http://www.govhealthit.com/GuestColumnist.aspx?id=75099
Is this concept an oxymoron?
Greg
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Video on Canadian Health Innovation and Sustainability
Innovation Forum: Institute of Health Economics
Panel Qs and As
Moderator Don Newman
Enjoy.
Dr. David Edward Marcinko MBA CMP™
http://www.CertifiedMedicalPlanner.com
[Publisher-in-Chief]
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Oh HealthTap
HealthTap is a health and technology start-up company dedicated to improving health and well-being by personalizing information.They help you better understand health, and make the best evidence-based decisions for yourself and your family.
HealthTap combines these resources in an entirely new online experience. It’s free, easy to access, and available for you anytime and anywhere.
http://www.healthtap.com
Rosemary
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Nine [9] Hi-Tech Innovations for Your Health
Excellent post and comments, all!
Now, check out these promising health-related apps, gadgets, and ideas from the recent Digital Health Summit.
http://www.informationweek.com/news/galleries/healthcare/patient/232500827
Strum
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Strum,
This doctor recently attended the Health Innovation Summit organized by Rock Health, a seed accelerator for health startups based in San Francisco.
Coming from the bureaucratic and comparatively stagnant world of health care systems, this event made him feel like he could dream again. Speakers provided pearls of wisdom for an engaging design. Panels offered strategic advice to attract VC and Angel funding.
And, most exciting was the chance to hear from entrepreneurs, each of whom offered their own incremental solution to improve health.
Read his report, here: http://thehealthcareblog.com/blog/2012/02/11/startups-the-other-health-technology-revolution/
Ann Miller RN MHA
[Executive-Director]
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