23 Mar 2010

Richard Bohmer on the Passage of U.S. Healthcare Reform Legislation

Richard Bohmer

Richard Bohmer
Physician and Professor of Management Practice. Author of Designing Care: Aligning the Nature and Management of Health Care.

Adapted from the 11/23/09 HBS Working Knowledge
article titled,"Management's Role in Reforming Health Care."

Insurance reform is a necessary but not sufficient component of U.S. health care reform. We need to think very hard as well about the optimal way of caring for a particular type of patient and then how to pay for that optimal way. For me, the optimal way is the function of a science: What is possible in terms of drugs, technology, devices, information technology, and personnel; then
secondarily, consider the current regulations
in place and the payment models.

There is an important set of discussions to be had around how we actually organize care, with all sorts of managerial and strategic decisions to be made at a policy and national level. Yet at ground zero, lots of interesting experiments are underway, with professionals trying different ways of configuring and managing services. On that list I include experiments with disease management programs, substituting nurse practitioners for physicians in certain circumstances, the in-store clinic model for treatment of simple diseases, and experiments with IT to enable precise electronic communication between patients and doctors so that real medical discussions can be had at a distance.

At the national level we don't hear much about these innovations; yet they present an equally important set of issues. We need to make a distinction between debating how it will be paid for and what the "it" is that is paid for.

Several factors are pushing us to change how we deliver care. Perhaps the most important of these is changing expectations. Patients are used to good service from other industries, and they expect higher performance than they see in the health care sector. They obviously worry a lot about whether their insurance will cover the medical services they need, but they are also concerned about the care they get--how accurate, reliable, and fail-safe it is, as well as how responsive and convenient.. Employers expect better outcomes, and of course they and patients want fewer errors and fewer patients harmed by care that was intended to cure their disease. Finally, all health care's constituents expect better value.

As for innovation, our prevailing model has been that knowledge flows into medical and nursing practice from funded external research. In this model it is the role of provider organizations to bring knowledge published in the medical and nursing literatures to bear on individual patients by selecting the right therapies and the right way of implementing those therapies--a one-way flow of knowledge from the research community to the delivery community to each individual patient.

However, routine practice is itself a fertile source of innovations in care, in both what to do and how to do it. Medical knowledge and how to operationalize it can be learned through taking care of patients, and delivery organizations create knowledge for themselves. This is knowledge flow not from bench-side-to-bedside, but from bedside-to-bedside. New insights derived from practice can be brought to bear for the benefit of each subsequent patient.

Given the increased expectations of performance, we now need to design care by asking nitty-gritty design questions such as: How is care going to be delivered? Who will do what, when, where, and how? How will they hand over tasks and decision rights and accountability to the next person who will do what, when, where, and how? And how does technology support these decisions?

Hence, a lot of healthcare reform is a management problem. It can't be solved by policymakers acting at a distance. That is why we should help doctors understand the managerial issues related to their clinical practice. My involvement with the MD/MBA program at Harvard Business School is part of that belief. A not-for-profit institution deserves to be as well managed as a for-profit institution. In terms of health care delivery, the absence of a profit motive doesn't mean that people should tolerate poorly designed processes and symptoms, especially when organizational performance is a necessary component of realizing the best clinical outcomes for individual patients.

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