Friday, July 10, 2009

You Can't Manage What You Don't Measure

How will healthcare look for future generations? You can't manage what you don't measure is an old management adage that certainly applies to healthcare today. Unless you measure something you don't know if it is getting any better. You can't manage for improvement if you don't measure to see what is getting better (or worse).
Let’s start with some definitions of terms:

  • Measure: as a verb means to ascertain the measurements of
  • Measurement: the figure, extent, or amount obtained by measuring
  • Metric: A standard of measurement

We first collect data (measurements), then determine how those will be expressed as a standard (metric) and then we can begin to measure improvements. In healthcare we usually measure costs and outcomes. Unfortunately in healthcare we are usually measuring and managing cost, not outcomes. Health information technology and implementation of EHRs is not the goal, it enable to reach the goal of lowering costs and providing higher quality care.
But I believe that the only way to lower costs is by using technology tools that will not only allow us to measure and manage costs, but increase the quality of care. My parents paid substantially less thirty years ago for the television I grew up with in our living room that the one I have in my home today. Even accounting for inflation the cost of television in our family has risen dramatically, but the quality is of course way better. It’s an imperfect analogy, but one reason healthcare is more expensive today in our country is because it is better. My grandmother was not able to receive state-of-art radiation therapy for cancer in the 1970’s.
HMS, a provider of cost management services for government health and human services programs, recently released recommendations to Congress for reducing healthcare costs while expanding coverage under Medicaid, the Children's Health Insurance Program (CHIP), and other government programs.
HMS's recommendations, outlined in the whitepaper "Cost-Saving Solutions for Healthcare Reform" whitepaper, can be implemented quickly using existing programs and agencies, without imposing additional burdens on providers or taxpayers. These steps include:

  • Verifying that only eligible people are enrolled in government healthcare programs;
  • Ensuring that the government is the payor of last resort when people enrolled in Medicaid, CHIP, and other programs also have private insurance coverage; and
  • Providing state agencies additional authority and tools to fight fraud, waste, and abuse.

Obviously measuring improvements in these areas will require using more advanced data capture and reporting abilities. The whitepaper also presents case studies on the Massachusetts Commonwealth Connector and New Jersey Charity Care programs, which have successfully adopted many of HMS's approaches to effectively control costs and manage resources. It is well worth the read.
"In an era of scarce resources and increasing public debt, it is critical for policymakers to identify ways to manage costs and target resources for sustainable healthcare expansion," said HMS CEO Bill Lucia. I am convinced the only way to manage costs and improve outcomes is by upgrading our Health 2.0 infrastructure. Effective healthcare reform will require us to change the way we do business in healthcare.