AAMC Reporter: December 2004

Pull the Plug on the Current Healthcare System

Fred Sanfilippo, M.D., Ph.D. Senior Vice President and Executive Dean for Health Sciences; CEO, Ohio State University Medical Center

Our healthcare system is on life support. No amount of triage or tinkering around the periphery of the current system will be enough to resuscitate it. The symptoms--45 million Americans without health insurance, costs increasing well in excess of inflation, lethal errors inflicted upon far too many patients, skyrocketing drug costs, rising malpractice rates--reflect an insidious and systemic problem. The bad news is that it is getting worse. The good news is that all sectors of our society recognize that it must change.

At this stage, reform is too weak a word for the remedy. We need to invent a new system that works for everyone, including patients, providers, payers, and employers. And that will only happen when we remove the barriers to competition based on quality and embrace an entirely new way of thinking about healthcare. Academic medical centers have consistently led improvements in healthcare delivery, especially by integrating services and implementing advancements in science and technology. We can and must be the axis upon which this radical change revolves for it to be successful. So, how do we make it happen?

First, we need to reward the delivery of value, not the delivery of care. The current healthcare delivery system treats medicine as a commodity. A provider who inadequately diagnoses and treats a patient who then returns with complications can often be paid more than a provider who promotes prevention, detects the problem faster, intervenes earlier and manages more efficiently. Recent studies demonstrate that more care and more spending do not necessarily correlate with better outcomes. Healthcare should not be priced by volume or measured in price per unit. Rather, it must be measured and reimbursed based upon the quality of outcome--the value created with innovative, effective models of healthcare that reduce the need for intervention.

If cost and outcome data for all providers were made completely transparent to patients, employers, and payers, appropriate market forces would drive changes in the cost, supply, and quality of healthcare. The tools exist to measure the performance of providers and reward those who deliver the best return on investment. In fact, some third-party payers now require participating health systems to report outcomes and have devised rate structures that provide financial incentives for achieving higher quality standards or special designations that will ultimately enable consumers to select the best performing services.

Secondly, we need to embrace market forces and encourage more competition within the profession. While some geographic regions are underserved, others have an oversupply of services that often leads to excessive amounts of care and costs. By moving to a truly open, transparent, value-driven delivery system where informed consumers have the ability to "shop" for care based upon cost, availability, and outcomes, the supply will be driven by demand. Greater competition will yield better outcomes.

Finally, we need to better use available and emerging technologies to promote prevention and best practices through data driven, evidence-based healthcare focused on the individual patient. Clearly, the best way to reduce the cost of healthcare is to keep people healthy and out of the doctor's office and the hospital. We already know that information and communication technology can reduce errors, yet many physicians and hospitals have been reluctant or unable to invest in these systems despite the benefits. The Leapfrog Group now recommends that all preferred providers have computerized order entry, and experience has demonstrated that it improves efficiency while reducing lengths of stay and errors.

Moreover, we are rapidly increasing our ability to identify genetic and molecular markers as well as behaviors and environmental factors that are associated with the risk of disease and response to treatment. The full application of information and communication technology will transform our ability to integrate the vast amounts of available diagnostic and therapeutic information to improve disease prevention, assessment, monitoring, and decision-making. The application of these technologies and data will provide the means to truly individualize prevention and treatment to greatly enhance outcomes. By making this knowledge readily available, we can create a more patient-centered environment where informed patients are active participants in managing their own health and disease.

In summary, we need to embrace the concept that the best healthcare must be personalized for what is best for each individual rather than what is best for providers, payers, or employers. We need to apply the standard business practices of competition to healthcare delivery to reward quality outcomes, cost-effectiveness, best practices, and patient responsibility. And we need to allow market forces to drive us to work more efficiently and effectively on behalf of the consumer. If we promote such changes, the pressures of cost-benefit and consumer control will eventually drive healthcare to where it ultimately belongs: focused on the patient.

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