Improving outcomes while reducing costs

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Image of Dr Mark Smith

Dr Mark Smith is the Founder and Former President and Chief Executive Officer of California HealthCare Foundation and the co-author of Best care at lower cost: the path to continuously learning health care in America. He will be speaking at The King’s Fund annual conference, Obstacles and opportunities: future-proofing the health and care system, on 19 November 2015.

Chris Ham, Chief Executive of The King’s Fund, asks him for his suggestions on improving outcomes for patients while reducing costs.

In Best care at lower cost, you suggest that health care can learn from other industries when it comes to creating better value. Can you explain more?

For a variety of reasons, health care is generally years behind manufacturing and other service industries in its appreciation of the application of modern management techniques to create processes that are safer, more reliable, more convenient for the customer/patient, and more focused on eliminating waste.

One example is the growing interest from health care organisations in ‘Lean’ management – an approach pioneered by the Toyota Production System. Several leading US health care institutions, such as Virginia Mason Medical Center in Seattle, Denver Health, and ThedaCare in Wisconsin, now receive a steady stream of visitors who wish to learn from their application of Lean techniques.

Another obvious example is the use of information technology to transmit information and to schedule and optimise face-to-face interactions where they are necessary. We have a lot to learn from other industries that have adopted such techniques.

What is the impact of new technology and increasing complexity on our ability to achieve better care at lower cost?

Technology is a double-edged sword. On the one hand, it enables stunning clinical interventions, remote human interactions and physiological monitoring, and previously impossible collection and analysis of data. But sometimes we fall victim to the presumption that ‘newer’ or ‘digital’ are better – it ain’t necessarily so. And the growth of technology is part of the burgeoning complexity of modern health care: more journals, more data, more clinical interventions, more drugs, and more complex organisations delivering care.

This complexity requires new approaches: from redesigning the temporal and physical flow of patient visits to rethinking continuing education and real-time decision support. Our report, Best care at lower cost, pointed out that the historical forms of provider organisation – often small, isolated practices, would need to be transformed to handle the clinical and informational complexities of the modern era.

What are the best examples you have seen of interventions that have improved care and reduced costs?

Our report drew on previous work by the Institute of Medicine (now the National Academy of Medicine), which estimated excess costs in six different categories: unnecessary services, inefficiently delivered services, prices that are too high, excess administrative costs, fraud, and missed prevention opportunities. Each of these areas requires attention.

For example, many US organisations are reducing oversubscribed antibiotics and non-evidence based imaging procedures; hospitals are now paying much more attention to preventing unplanned re-admissions (perhaps because they no longer get paid for them); modern electrical medical records (EMRs) with decision support can improve preventive screenings and vaccinations; providers who specialise in caring for chronically ill patients are building platforms that combine home and institutional primary care with traditional office-based practice.

Lastly, palliative care is increasingly demonstrating that attention to patients’ preferences and priorities can dramatically improve the patient and family experience at lower cost.

Where should clinicians begin when looking to improve value in their area?

I’d offer two suggestions, from opposite directions: population-based metrics of performance and examination of individual patients’ experience of care. Clinicians can ask themselves: ‘How is my practice doing globally on… vaccinations; blood pressure control; colonoscopy screening; undetectable HIV viral loads; joint range of motion after surgery; rates of MRI for uncomplicated low back pain; activities of daily living for patients with arthritis?’

Different specialties will have different metrics for performance, but practices and individuals should know where they stand on delivering evidence-based, high-value care and avoiding low value care. This work requires electronic records, analysis of data across populations and a spirit of inquiry, humility, and dedication to improvement.


‘Have I drawn a string diagram to actually chart how many steps and stops a patient has to make during a visit? Have we designed the environment for their convenience or ours? Are we maximising the appropriate use of the phone, email and telemedicine to move information instead of people? Do I know the outcomes that are important to this particular patient for prostate surgery? Chemotherapy? Chronic pain?’

This work requires familiarity with so-called ‘patient-centred outcomes’ but also requires learning some techniques and tools (such as Lean) that are not necessarily intuitive and generally not part of clinicians’ training.

You describe achieving a continuously learning health care system as a key way of improving outcomes and value. How can we start to achieve this in a system like the English NHS?

The NHS starts with a huge advantage: it is a unitary system with accountability for costs, clinical outcomes, and the work environment of its workforce, and the ability to negotiate with large suppliers like the pharmaceutical industry. In the United States a huge amount of time, energy, and money is spent in jockeying for advantage between and within sectors.

My impression of the UK system is that you share with us a big challenge in improving the ability of providers to find ‘joy in work’. It may be that in the United Kingdom, as in the United States, the myriad changes in health care – cost pressures, complexity and challenges to traditional professional roles and habits – have overwhelmed many people who are not well prepared, equipped, or supported to make the necessary changes. If that’s the case, that might be one important place to start – by acknowledging the difficulties facing many well-meaning people and focusing on the positive.

The bright side of our era is that we are in a position to help patients – and populations – more than at any time in human history, if we take advantage of the tools now available. That’s a vision of a bright future for patients and providers alike.

This article was originally published in The King's Fund's Insight magazine, autumn 2015.

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Fazeela Patel

Comment date
07 January 2016
Cost effectiveness, increase in healthcare capacity and quality care and patient experience. These can be achieved by broadening the roles of allied health professionals, and lifting the existing boudaries...including operating Department Practitioners.....

Samira Salbi

digital editor/director,
Comment date
26 October 2015
cost can be reduced if changes are introduced to meet the evolving needs of the population
A good example is change of dental care services to meet changing demographics' and their needs, from expensive intervention/treatment to oral health/prevention system designed to meet the new needs.

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