Phil Hauck's TEC Blog

Tuesday, March 11, 2014

More on the Medical System ...

     According to the Harvard Business Review, an hospital system in India plans to open a 2,000(!) bed hospital in the Cayman's with the objective of siphoning off profitable U.S. surgeries and other treatments through its low cost processes. This is amazing! And another wakeup call to the U.S. way of structuring medical care. And they aren't doing it only through low salaries and wages; that's a minority of the cost differences.
     The article says that the main way they create lower costs is a Hub-and-Spoke location system, where the Hub is the large specialty center (either a single specialty or multiple ones) and the Spokes don't have ANY expensive equipment (as U.S. ones frequently do) other than diagnostics, and are primarily a gateway facility. MRIs and labs are provided electronically to the specialists at the Hub for diagnosis and prescription.
     This structure as well as how they define job roles are aimed at cost-effectiveness, not market competitiveness. They try to have people do as many procedures or services at their skill set level as possible, and locate and schedule to that. Much more cost efficient!
     Get this: The cost result, even after increasing the salary/wage levels to U.S. levels, still results in procedure costs that are about one-quarter of the U.S. medians!!!
     The article goes on to illustrate how they go to major lengths to maintain expensive equipment so it lasts longer (or contract with the equipment makers for "pay-for-use" rather than purchase), to re-sterilize all re-usable equipment and supplies for re-use, to provide videos to family members so they can provide post-surgery care at home ... and others. And all staff, including doctors, are informed each morning of the P&L results from the previous DAY!
     And yes, the outcome data is comparable to U.S. and international protocols.
     The importance to US, the PAYERS: The solutions to our cost problems, which also drive our access problems, will come from pressures/influences by US ... not from within the industry (tho they will provide the expertise) or government.
     Just sayin' ...

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