Health Care, Toyota Style
Friday, June 15, 2007; 12:00 AM
Paul Levy, CEO of Beth Israel Deaconess Medical Center in Boston and author of the taboo-busting "Running a Hospital" blog, wrote recently about a dilemma he faced involving the "da Vinci Surgical Robot." Levy has been advised that without purchasing a new da Vinci robot, the hospital's prostate surgery volume will plummet because others will market this new treatment even if it's not superior to current procedures -- and it might not be.
Last year, Levy reported that less invasive robotic surgery is proven to be no better than "open" prostate surgery -- on measures such as success removing cancer, retaining potency, amount of pain and reducing recovery time. The editor-in-chief of the journal Nature Clinical Practice Urology wrote this past month that he had similar reservations.
Despite the findings above, plummeting surgery volume is not acceptable. The only solution to Levy's dilemma is to spend over $1 million on a new robot that hasn't been shown to increase the quality of care. That doesn't even include the hospital's marketing expenses.
This example is one of many that explain rising health care costs, which are a major threat to the economic security of the middle class. These higher expenses are causing many employers to either drop health coverage, pass the increases along to workers by way of higher cost-sharing, or even shift jobs overseas. In turn, growing numbers of employees are declining coverage because it's no longer affordable.
Adoption of new technology is the driving force behind recent increases, which presents tough choices for insurers and clinicians: obviously they want to give patients the best care possible, but that comes at a price -- or does it? Are patients gaining value for their higher payments? Many scholars now believe a new public-private entity is needed to sort out the best treatments. This would help patients get the best care and at the same time slow health care cost growth.
Many in the health care industry are looking to successful non-health businesses as a guide, and the Toyota Motor Corporation is one of the best examples of achieving high value for dollar. The company builds high-quality, low-cost vehicles and is poised to become the world's largest automobile manufacturer this year, producing 9.4 million vehicles. Toyota is guided by a set of principles called "the Toyota Way," finely illustrated in Jeffrey Liker's 2004 book of the same name. Hospitals in Pittsburgh and Seattle, and increasingly in other regions of the country, are using Toyota principles to improve the quality of care, while making it more patient-centered and efficient.
A vital Toyota principle is "use only reliable, thoroughly tested technology that serves your people and processes." What lesson does this offer health care? Levy's lament of "appearing behind" in prostate surgery, despite offering comparable quality of care, makes it sound like he must spend $1 million to purchase the da Vinci Robot. Yet what happens when a newer technology is released in 2010, at double the cost? Will hospitals wait to see if the quality is better, or will they simply purchase it to protect market share?
To better serve our people and processes in health care, Congress and the president must work together to establish a comparative effectiveness institute. As many conservative and liberal health policy scholars have suggested, it should be publicly funded and independently managed to avoid capture by political interests.
The institute would help clinicians, insurers and patients compare the likely impact of various treatments by funding and organizing clinical effectiveness research -- examining what treatments work best, for whom, when. Some of this information already exists, but it is spread across a variety of government agencies and private centers. The institute would fund new research and organize current information so that it could be easily accessed. It would be transparent and readily available to the public.
The institute would not make coverage or treatment decisions; those would continue to be made by insurers and clinicians, respectively, who would use this new information as a tool. Insurers could choose, though, to further adopt reference pricing: If two drugs or treatments were to have the same effectiveness, the patient would be forced to pick up the tab if they chose the more expensive route. The patient receives appropriate care either way, and the lower costs to the insurer result in more affordable coverage for everyone else.
A unique opportunity comes next February when President George W. Bush is required by law to submit a plan to address Medicare's struggling long-term finances. The president lacks a big domestic policy win in his second term and health reform makes an attractive candidate. A comparative effectiveness institute would fit nicely in a larger Medicare bill and would be a smarter way to achieve long run cost containment than focusing on payment cuts.
The BlueCross BlueShield Association and Sen. Hillary Rodham Clinton (D-N.Y.) each have proposals similar to the one described above. Reps. Tom Allen (D-Maine) and Jo Ann Emerson (R-Mo.) have a bill to expand the government's Agency for Healthcare Research and Quality to do more comparative effectiveness work.
A comparative effectiveness institute is the best way to increase health care quality and at the same time rein in cost. The sooner it is created, the sooner we can improve care for those with insurance as well as broaden access to those without. If we value our health more than our automobiles, should we be satisfied expecting more value per dollar from Toyota than from our doctor?
Tom Emswiler is a senior program associate with the Health Policy Program at the New America Foundation in Washington, D.C.